Lunchtime Links: The might of Merrill drives Q1 profits at BofA
Merrill Lynch bankers might not be entirely pleased with the way things are going at Bank of America, but at least they're no longer a liability for their new owners.
BofA's recently released Q1 results show the Merrill contingent acquitted itself very well in the first quarter of this year, achieving a return on average equity of 34% (up from -88% in the preceding quarter). Rates and currencies looked particularly good, and the trading account swung to a $4.9bn profit, away from a $3.9bn loss in the fourth quarter.
When non-interest and other expenses are deducted, net quarterly income for Merrill Lynch BofA's global markets segment was $2.3bn. However, this may overstate the case: Alphaville points out that this includes, ' $2.2 billion in gains related to mark-to-market adjustments on certain Merrill Lynch structured notes as a result of credit spreads widening.'
Separately, Financial News is running two articles today highlighting alleged disaffection at Merrill Lynch. One says senior ML bankers want to reshape the combined ML/BofA entity in the style of JPMorgan, while BofA bankers had in mind something a little more like BofA. The other says BofA man Brian Moynihan wants to remove individual managers' ability to set compensation and that everything's becoming a little too centralized for ML people's liking.
Nomura hires eight for equity research, including two former MDs from ML (Bloomberg).
UBS removes 10 equity researchers in Japan (Bloomberg).
FSA impedes Johnny Cameron's gravitation to Greenhill (Bloomberg).
Obama says he won't be pouring money into the banking black hole (Marketwatch).
The shadow hanging over Citi's profitable quarter (DealBook).
Why Citi didn't really earn $1.6bn (Wall Street Journal).
I now expect a clean bill of health for the banks from the Stress Tests. For most banks this will turn out to be incorrect before the end of the year (Maverecon).
"I think there's one trade left in the financial sector, and it's long Morgan Stanley." (CNBC).
The US may prevent Goldman from paying TARP back (BusinessInsider).
Where the Goldman bankers went next (GoldmanSachs666).
'GoldmanSachsislovely.com' is up for grabs (Bloomberg).
99 ways to value associates (Dealbreaker).
