Discover your dream Career
For Recruiters

Will Bank of America sell Merrill Lynch?

A rumor has begun circulating that Bank of America might need to sell Merrill Lynch.

It's source appears to be John Carney, senior editor at CNBC, who pointed out that a sale of Merrill Lynch could be one way of raising the $50 billion it's said to need to cover mortgage losses.

Carney points out that Bank of America paid around $50 billion to acquire Merrill, making it an obvious candidate for divestiture. Meanwhile, the New York Post says B of A is thinking of selling its stake in China Construction Bank. But this would only raise $21 billion.

Needless to say, a sale of Merrill Lynch would be massively disruptive and probably result in many thousands of job losses. In reality, however, it's unlikely.

B of A/Merrill Lynch has just announced its second quarter results. They show total net revenues in the global banking and markets division falling 6% in the first half, versus the same period of 2010, while profits fell 11%.

This looks good compared to Citi - where revenues in securities and banking fell 18% and profits fell 40% over the same period.

More importantly, however, B of A/Merrill Lynch is looking increasingly dependent on its global banking and markets division for its profitability. In the first six months of 2011, the bank as a whole made a loss of $6.7 billion, while its global banking and markets business contributed a profit of $3.7 billion. Merrill Lynch might be better off without Bank of America, but Bank of America would not necessarily be better off without Merrill Lynch.

author-card-avatar
AUTHORSarah Butcher Global Editor
  • su
    surfer1
    25 July 2011

    Better yet, what can it do to get rid of Countrywide.
    Now that was a jack-ass of an aquisition.

Sign up to Morning Coffee!

Coffee mug

The essential daily roundup of news and analysis read by everyone from senior bankers and traders to new recruits.

Boost your career

Find thousands of job opportunities by signing up to eFinancialCareers today.
Latest Jobs
State Street Corporation
Senior Cloud Database Engineer - Charles River - AVP
State Street Corporation
Nashville, United States
State Street Corporation
Team Lead, SaaS Onboarding - Charles River - AVP
State Street Corporation
Burlington, United States
State Street Corporation
Database Developer, Oracle, AWS-AVP-State Street Global Advisors
State Street Corporation
Boston, United States
Focus Capital Markets
Zero Day Options
Focus Capital Markets
Chicago, United States
Focus Capital Markets
Senior Options Trading Quant Researcher
Focus Capital Markets
Chicago, United States
Focus Capital Markets
Senior Gen AI / LLM/ ML Engineer
Focus Capital Markets
New York, United States

Sign up to Morning Coffee!

Coffee mug

The essential daily roundup of news and analysis read by everyone from senior bankers and traders to new recruits.