Merrill Lynch suffers Q1 losses

Financial services firm Merrill Lynch today reported a sharp fall in profits for the first quarter, due to a $1.2 billion charge incurred for changing its accounting practices.

However the fall in net income, from $1.21 billion in 2005 to $475 million in the first three months of this year, was much less than anticipated by trade analysts, who had predicted a fall to only $315 million.

Without the one-off charge, Merrill would have raked in nearly $1.7 billion, a rise in net profits of 36 per cent compared with the same period last year.

Significant gains in trading, investment banking, brokerage and money management have seen Merrill's profits increase steadily over recent months, with increases in revenue causing profits to increase.

The world’s largest securities firm has also benefited from the equity-trading gains that helped rivals Goldman Sachs and others to record profits in the first quarter.

Merrill Lynch incurred the $1.2 billion after-tax charge following changes to it accounting and compensation policies.

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