Companies: ARDN    HSBA   

Wall Street banking behemoth Merrill Lynch has become the latest financial services luminary to unveil US mortgage market-related losses. For calendar year 2007, net losses of US$7.8 billion (£3.9 billion) were recorded, including a $14.1 billion write-down on investments relating to sub-prime mortgages.

Erstwhile CEO Stan O’Neal stepped down in October due to the bank’s poor recent form. Describing its performance as ‘clearly unacceptable’, successor John Thain has ‘substantially’ improved the firm’s liquidity in recent weeks and is promising to overhaul the bonus system, Wall Street banks having made record pay-outs despite their huge losses.

Global financial giants that have announced sub-prime-related losses include Citigroup
($18 billion), UBS ($13.5 billion), Morgan Stanley ($9.4 billion), HSBC ($3.4 billion), Deutsche Bank ($3.2 billion) and Bank of America ($3 billion). Banks are struggling to calculate how much their investments in assets backed by sub-prime mortgages are actually worth, which explains the sheer size of the write-downs.

Meanwhile on AIM, £34.5 million investment bank Arden Partners cheered investors with news of a record year to October despite the recently bleak investment climate for small-cap companies. An impressive 18 per cent increase in profit before tax to £5.5 million was reported on turnover up by the same percentage to £16.8 million. During the year, £205 million was raised for clients, up from £137 million a year earlier, with the number of corporate broking clients increasing by nine per cent to 36.