Merrill Lynch & Co. Inc. and
Citigroup Inc. were walloped by third-quarter losses, while
State Street Corp., The
PNC Financial Services Group Inc. and Bank of New York Mellon Corp. posted profits.
Merrill Lynch, which is in the process of being bought out by
Bank of America Corp. of Charlotte, N.C., posted its fifth consecutive quarterly loss, as its write-downs from subprime mortgages continue to mount.
The New York-based brokerage giant posted a loss of $5.2 billion, or $5.58 per share, compared with a loss of $2.2 billion, or $2.82 billion per share, in the year-ago period.
Analysts surveyed by Thomson Reuters of New York were expecting a loss of $5.18 per share.
The company posted a net write-down of $5.7 billion, which resulted from the sale of "U.S. supersenior ABS collateralized debt obligations" and $2.6 billion in losses related to bad mortgage investments.
On Sept. 14, Merrill agreed to sell itself to
Bank of America for $50 billion in an all-stock acquisition.
Citigroup posted its fourth consecutive quarterly loss and slashed 11,000 jobs but managed to beat Wall Street expectations.
The New York-based financial services giant posted a loss of $2.8 billion, or 71 cents per share, down from profit of $2.21 billion, or 44 cents per share.
Analysts surveyed by Thomson Reuters were expecting a loss of 70 cents per share.
The loss was attributed to $4.4 billion in write-downs on bad investments, $4.9 billion in credit losses and $3.9 billion charge to strengthen its reserves.
Profit at
State Street increased 33% on stronger trading fees but fell short of analysts' estimates.
The Boston-based money management giant posted earnings of $477 million, or $1.09 per share, up from $358 million, or 97 cents per share, in the year-ago period.
Analysts surveyed by Thomson Reuters were expecting earnings of $1.19 per share.
Trading fees increased to $363 million, up 13% from $320 million in the year-ago period.
State Street said unrealized losses on its investment portfolio increased to $3.3 billion in the quarter, from $2.01 billion at the conclusion of the second quarter.
The company said it also expects to set aside between $400 million and $450 million in the fourth quarter to offset losses in wrap accounts — fixed-income funds managed for banks and brokers.
PNC posted a 39% decrease in net income during the third quarter, which was attributed to losses from bad loans.
The Pittsburgh-based bank reported net income of $248 million, or 71 cents per share, down from $407 million, or $1.19 per share, in the year-ago quarter.
Analysts surveyed by Thomson Reuters were expecting earnings of 88 cents per share.
The decline in profit stemmed from an $82 million write-down on commercial mortgages, $54 million in trading losses and $74 million in write-downs from exposure to
Fannie Mae of Washington and
Freddie Mac of McLean, Va.
Assets under management fell to $63 billion in the third quarter, down 14% from the year-ago period.
Bank of New York Mellon posted a 53% decline in net income on securities losses.
It had earnings of $303 million, or 26 cents per share, in the third quarter, compared with $642 million, or 56 cents per share, in the year-ago period. Excluding one-time items, the profit was 72 cents per share.
The results were stronger-than-expected earnings of 66 cents per share, according to analysts surveyed by Thomson Reuters.
BNY Mellon wrote down $162 million on certain investment securities during the quarter.
Assets under management totaled $1.067 trillion at the end of the quarter, down 4% from the year-ago period.
This week, the government announced that it will invest $250 billion in nine financial institutions, including Citi, Merrill and
BNY Mellon, in exchange for accepting restrictions on executive compensation.
