Following the bank's risky deals on the sub-prime market, Merrill has been punished by taking a net loss of $7.8 billion in the 12 months ending December after it made a pre-tax profit of $7.5 billion for the same period the previous year.
Contributing greatly to this loss was the $14.1 billion writedown the bank was forced to make on its fatal investments on the sub-prime mortgage market.
In the final-quarter of 2007, Merrill made an unprecedented loss of $9.83 billion.
New chief executive John Thain said that the ban's results were "clearly unacceptable", but was still counting his chickens.
"I don't think you should anticipate any further problems of this magnitude," Mr Thain said. "There would have to be something incredibly bad out there to have this happen again, and our whole goal is to get 2007 behind us."
BBC business editor Robert Peston warned that damage might be done to Merrill in ways other than just fiscal. "Having lost all that financial capital, the risk for Merrill is that its most valuable human capital - those executives untainted by sub-prime - will flee," he said.