Sacred cow in a thundering herd

18 Apr 2006 By Antony Currie Follow @AntonyMCurrie

Most of the firm s growth is coming from investment banking. Its brokerage and assetmanagement arms look lacklustre by comparison. CEO Stanley O Neal has already struck a smart deal for Blackrock to run the money manager. Perhaps the broker needs a life of its own, too.

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Merrill Lynch reported firstquarter earnings on Tuesday, beating consensus estimates by 37%. Revenue was a record $8bn, while net earnings fell 60% from last year's first quarter to $475m. The drop was due a oneoff aftertax charge of $1.2bn related to changes in accounting practices and stockaward policies. Merrill announced the charge on April 3.

Revenue at the investment bank increased 31% from the fourth quarter to $4.6bn, led by strong debt and equity trading and debt underwriting. Equity underwriting and M&A advisory both fell from the fourth quarter.

Revenue at the Global Private Client group increased 1% from the fourth quarter, although was up 13% on the first quarter of 2005.

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