Page last updated at 12:29 GMT, Thursday, 17 April 2008 13:29 UK

Write-downs add to Merrill woes

Merrill Lynch office

Merrill Lynch has reported heavy losses from the first three months of 2008, after more write-downs linked to the embattled credit markets.

The firm said it lost $1.96bn (1bn) compared with a profit of $2.1bn in the same period a year earlier - broadly in line with what analysts had expected.

And it unveiled plans to cut about 4,000 jobs worldwide.

The results included about $4.5bn of write-downs for subprime mortgages and other risky assets.

Merrill Lynch had already recorded in excess of $24bn of write-downs in previous quarters.

'Poor management'

Chief executive John Thain said that the firm remained "well-capitalised" and that there were no plans to raise more capital.

The job cuts make up about 10% of staff, excluding financial advisers and investment associates, and will save about $800m a year, Merrill said.

Analysts have blamed poor risk management for Merrill's over-exposure to bad sub-prime mortgage debt.

However most of the main US banks have also had to unveil substantial losses linked to sub-prime investments of their own.

The knock-on effect has been the global credit squeeze, as banks worldwide have been much less willing or able to lend money until the full extent of sub-prime losses is known.

Earlier this week JP Morgan Chase boosted markets, by revealing no major new woes.

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