(October 17 – 17:10 ET) – Merrill Lynch reported record third-quarter net earnings of US$885 million today, up 53% from the US$579 million earned in the same quarter a year ago.

The firm does not report segmented results for Canada, although it does credit the results to its increasingly global operation. “These outstanding results reflect strong earnings growth across all of our businesses,” said David Komansky, Merrill Lynch chairman and CEO. “Our company is realizing the benefits of investments made over the past decade to build our global franchise. We are executing a strategy aimed at delivering superior value to our clients and shareholders.”

Merrill’s pretax profit margin for the quarter was 21.3%, up from 16.9% a year ago. Annualized return on average common equity was approximately 21.6%, compared with 20.2% in the third quarter a year ago. Merrill says it retained its position as the leading underwriter of total debt and equity securities in both the U.S. and global markets, with third-quarter market shares of 15.9% and 14.6%, respectively, according to Thomson Financial Securities Data.

In the Private Client Group, pretax earnings in the quarter grew to US$402 million, up 44% from the third quarter of 1999 and up 37% from the second quarter of this year. The pretax margin in the quarter increased to 14%, led by major increases in the U.S. business, up from 11% in the third quarter of 1999. Third-quarter expenses were reduced by US$247 million, or 9%, from the preceding quarter, primarily as a result of lower volume-related transaction costs, reduced advertising spending, staff reductions and other actions taken to generate efficiencies. This overall decrease in expenses is after recording $70 million of compensation and benefits costs associated with the staff reductions.

Assets in client accounts were US$1.8 trillion, including US$1.6 trillion of assets in private client accounts, which were up 20% from the year-ago period. Net new money flows into private client accounts totaled US$34 billion.

Outside the U.S., Merrill’s private client business is delivering 20% year-over-year net revenue and asset growth. The firm continued to grow its worldwide broker force, which increased by approximately 500 during the quarter to 20,100.
-IE Staff