Merrill Lynch reports $5.6 billion losses on FICC business
Merrill Lynch has reported $5.6 billion losses for its fixed-income, currencies and commodities (FICC) business in its third-quarter 2007 results.
The bank revealed write-downs of $6.9 billion across collateralised debt obligations (CDOs) and $1 billion write-downs across US subprime mortgages, which are much greater than the $4.5 billion total write-down Merrill Lynch disclosed in a pre-earnings statement on October 5.
"Mortgage and leveraged finance-related write-downs in our FICC business depressed our financial performance for the quarter. In light of difficult credit markets and additional analysis by management during our quarter-end closing process, we re-examined our remaining CDO positions with more conservative assumptions. The result is a larger write-down of these assets than initially anticipated," said Stan O'Neal, chairman and chief executive officer of Merrill Lynch in New York.
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