Asset and wealth management firm Wachovia wrote a note to clients suggesting that there could be scope for more writedowns in the coming months.
According to Reuters, Wachovia said that to ride out the recent economic downturn Merrill Lynch may need another round of capital investment.
The banking chain revised its second quarter estimate for Merrill shares. Wachovia now predicts a loss of $2.16 a share for the second quarter of 2008, compared to an earlier estimate of 63 cents per share.
Overall share performances for 2008 have been revised from a 15 cents profit to a loss of $3.11.
In order to raise funds, Merrill Lynch is considering plans to sell its stake in money manager BlackRock and financial newswire Bloomberg, according to reports in the Wall Street Journal.