Merrill Lynch today said quarterly net income climbed a better-than-expected 49 per cent to record levels as underwriting and trading revenue jumped.
Stocks rose and corporate bonds improved relative to Treasuries in the third quarter, helping trading revenues rise across Wall Street.
But Merrill's long-dormant asset management and individual investor businesses also turned in higher revenue and profit margins, which analysts said offers hope for future profit growth and helped lift Merrill shares in early trading.
Merrill's investment banking net revenue rose 33 per cent from a year earlier, to $773 million. Investment banking revenue is growing industrywide as merger and acquisition activity increases and debt and equity issuance broadly rise.
Citigroup yesterday said stronger investment banking revenue helped lift its net income 35 per cent last quarter.
Merrill's trading revenue rose 73 per cent to $2.9 billion as debt trading produced record quarterly net revenue. Global private client revenue, which includes retail and wealthy individual investors, rose 16 per cent to $2.7 billion, and Merrill Lynch Investment Managers' revenue rose 22 per cent to $456 million.
In early trading on the New York Stock Exchange, Merrill shares were up 25 cents, or 0.41 per cent, to $61.35, even as the broader market edged lower. In pre-market trading, Merrill shares were up by as much as 4 per cent.