Merrill Lynch & Co. on Thursday reported a $4.9 billion loss amid massive write-downs from soured mortgage positions and other risky investments, and unveiled plans to raise money by unloading assets.
The world’s largest brokerage posted its fourth straight quarterly loss as it struggles to shore up a balance sheet battered by the global credit crisis. Merrill Lynch took $9.4 billion of charges and write-downs from mortgage-backed securities, unprofitable hedge positions, and residential mortgage exposure.
The new charges come on top of nearly $29 billion in write-downs that the New York-based brokerage had already taken because of tightening credit markets. Global banks and brokerages have been forced to take some $300 billion of write-downs in the past year.
Merrill also said it had reached a deal to sell its 20 percent stake in news and data provider Bloomberg LP for $4.43 billion, and is close to selling its controlling interest in Financial Data Services Inc. for upward of $3.5 billion.
“Our core franchise continues to perform well despite the extremely challenging market environment,” John Thain, Merrill Lynch’s chief executive, said in a statement. “Importantly, with the transactions we announced today, we are bolstering our capital base and continue to move forward on our risk management and strategic growth initiatives.”
Merrill lost $4.89 billion, or $4.97 per share, after accounting for the payment of dividends for the three months ended June 30. That compares to a year-ago profit of $2.01 billion, or $2.24 per share. The broker reported negative revenue of $2.11 billion versus revenue of $9.46 billion a year earlier.
Shares closed up $2.73, or 9.8 percent, at $30.73.
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