Merrill Lynch underlined Wall Street's renewed confidence yesterday when it said it had started hiring again as it presented record quarterly earnings.

Mr Stan O'Neal, chief executive, who cut costs sharply after the market peaked in 2000, said the investment banking and broking group was now "investing in talent and technology" to take advantage of the improved conditions.

Merrill added 224 brokers to its 13,700 worldwide network in the first quarter and said it was stepping up recruitment in other areas of the group.

Full-time staff numbers rose 100 to 48,200 over the quarter.

Mr O'Neal said the first-quarter earnings showed the group had kept its ability to increase revenues and defend its strong market positions.

He said: "Although we are mindful that market sentiment can change quickly, we see considerable opportunities for further growth."

The figures showed solid growth across the group's three divisions which drove net earnings up by 95 per cent to $1.3 billion (€1.09 billion).

Revenues at its investment banking and markets business jumped 32 per cent to $3.2 billion with pre-tax earnings up by almost half to $1.1 billion. It was helped by the continued buoyancy of fixed-interest markets and strong growth in equities revenues.

In investment banking, Merrill said it had increased market share in equity and debt underwriting and advising on mergers and acquisitions.

Investment banking revenues were $837 million, up 70 per cent on the same period last year, with underwriting revenues 83 per cent higher at $672 million. Strategic advisory revenues were $165 million, up 32 per cent, as merger and acquisition activity increased.

The private client business doubled pre-tax earnings to $510 million on revenues up 19 per cent to $2.5 billion. - (Financial Times Service)