GO
Loading...

Merrill, UBS May Write Down More: BoA Securities

Banc of America Securities expects Merrill Lynch and UBS to write down $3.5 billion and $7 billion respectively in the second quarter and forecast a quarterly loss for the investment banks.

Analyst Michael Hecht expects continued markdowns on troubled asset inventories, tough comparisons and weakness in a number of sales and trading areas for the second quarter.

Hecht forecast a quarterly loss of $1 a share for Merrill, compared with his earlier view of a profit of 21 cents a share, saying the marks on its collateralized debt obligations and mortgage-related exposures would be more severe than prior expectations.

Hecht also changed his second-quarter estimate for UBS to a loss of $1.70 a share from a profit of 31 cents, saying the company's U.S. sub-prime exposure had overshadowed the firm's other segments including wealth management, investment banking and asset management.

Slowing economic growth and still-large balance sheet exposure to residential and commercial mortgages suggest a lackluster, low visibility environment for the large investment banks through 2008, Hecht said.

Banks

  • Richard Kovacevich in 2007.

    There were only 20 banks that caused the crisis, and "they're all gone," former Wells Fargo CEO Dick Kovacevich told CNBC.

  • How much the banking industry has changed since the collapse of Lehman Brothers, with Richard Kovacevich, Wells Fargo former chairman and CEO.

  • How much of a game changer is Apple Pay? Max Wolff, Manhattan Venture Partners chief economist, and Hans Morris NYCA, discuss the mobile pay ecosystem and why Apple Pay will succeed where others failed.