5,200 Jobs At Risk At Two Top Firms
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Merrill posted its third-straight quarterly loss, after an additional $4.45bn in net writedowns, which relates to CDOs, Alt-A residential mortgage-backed security assets, hedges with financial guarantors and leveraged loans.
The firm's writedowns in the last 9 months now total some $29.5bn. Firm CEO John Thain said: 'Despite this quarter's loss, Merrill Lynch's underlying businesses produced solid results in a difficult market environment'. Thain added that Merrill was 'well-capitalized'.
In the meantime, Reuters reports that UBS Investment Bank is said likely to cut an additional 2,200 jobs in the next round of cost-cutting, which is expected to kick-off some time soon. The new agency quotes unnamed people 'close to the situation' as its source. UBS CEO Marcel Rohner said over the weekend that estimates of a cull of 3,000 - 4,000 more staff was on the high side. London and New York are expected to take the main brunt of the additional lay-offs. Media reports suggest that up to 900 London staff will be axed.
The Financial Times reports that Peter Kurer, the bank's in-coming chairman, said that 'we shouldn't fool ourselves. We can't pretend that there has been no reputational damage (because of the $37bn in asset writedowns, losses and falling share price). Experience says that it will go away after two or three years'.
The bank also said Wednesday that it plans to pay its latest dividend in shares in order to conserve cash.
