$5bn loss adds to Merrill's woes

Where next for sub-prime losses?

US bank Merrill Lynch has posted a $4.89bn (£2.49bn) loss in the three months to June due to heavy exposure to the sub-prime mortgage market.

It was the fourth quarterly loss in a row for Wall Street's third-largest investment bank and was far bigger than analysts had expected.

Merrill announced it would write-down $9.4bn because of US mortgage market and other high risk investments.

It must now sell billions of dollars of assets to shore up its finances.

The new charges come on top of nearly $29bn in write-downs that the brokerage had already taken because of tightening credit markets.

In April, Merrill announced it would cut about 4,000 jobs worldwide.

Global banks and brokerages have been forced to take some $300bn of write-downs in the past year.

Analysts were surprised by the quarterly loss which compares with a profit of $2bn the period last year.

Chief executive John Thain called the quarter "difficult and disappointing."

The financial group also said it had agreed to sell its 20% stake in news and data provider Bloomberg for $4.43bn and selling its controlling stake in Financial Data Services.