The toxic shock from the US subprime mortgage meltdown continues to ripple through the financial world. US investment bank Merrill Lynch has just reported more write-downs as it admitted that assets it did have on its books are actually now worth little or nothing.
Merrill’s total hit from the credit crunch has risen to around 37 billion euros. Its latest quarterly loss was almost 3.9 billion euros; that was worse than expected and worse than the previous two quarters put together.
At the same time, Citigroup reported its fourth consecutive quarterly loss – this time it was two billion euros. It too has been swamped by write-downs on investments and is seeing less income from its banking operations, credit cards and loans.
Its total losses since the start of the credit crisis over a year ago come to at least 48 billion euros. Citigroup has just lost its status as the biggest bank in the US in terms of assets to its rival JPMorgan.