Merrill Lynch Global Wealth Management (GWM) posted second-quarter 2007 net revenues of $3.6 billion

Merrill Lynch Global Wealth Management posted second-quarter 2007 net revenues of $3.6 billion, up 18 per cent from the second quarter of 2006, contributing to record $7 billion net revenues for the first six months of 2007, an increase of 17 per cent. Overall, the world's third-largest securities firm, reported that second-quarter 2007 net profits were $2.1 billion, up 31 per cent from the second quarter of 2006 and down 1 per cent from the first quarter of 2007. The bank said record wealth management revenues and profits for both the second quarter and first half of 2007 were driven by Global Private Client, as well as by the contribution of Global Investment Management, which includes earnings from Merrill Lynch's investment in BlackRock. The pre-tax profit margin in Merrill's Global Wealth Management division, which includes the brokerage and results from the firm's stake in money manager BlackRock, was 28 per cent of revenue. Merrill added 270 financial advisors, bringing the total to 16,200, and client assets rose 14 per cent to $1.7 trillion. Total net new money was $9 billion. GPC's net revenues increased 13 per cent to $3.3 billion in the second quarter, driven by every major revenue category, including record fee-based revenues, which reflected higher asset values and net flows into annuitised-revenue products, as well as strong transaction and origination revenues. Net interest revenues also increased. For the first six months of 2007, GPC's net revenues increased 12 per cent to a record $6.5 billion. GIM's net revenues increased 119 per cent to $305 million, due largely to revenues from Merrill Lynch's investment in BlackRock, which began to contribute to revenues during the 2006 fourth quarter. GIM's net revenues for the first half of 2007 were a record $566 million, up 133 per cent from the same period in 2006. "We delivered another strong quarter in a volatile and, at times, hostile market environment," said Stan O'Neal, chairman and chief executive officer of Merrill Lynch. "These results reflect our revenue diversification, which makes possible strong performance despite uneven market conditions. Our focus on business and revenue growth, expense discipline and global expansion continues to enhance the earnings power of our franchise." Mr O'Neal, who took over as chief executive officer in 2002, has expanded into markets where Merrill lagged behind Goldman Sachs or Morgan Stanley, such as private equity, commodities trading and derivatives. The firm now generates 60 per cent of its investment-banking and trading revenue in Europe and Asia, home to half the world's economic output and six of every 10 millionaires. In the Pacific Rim, Merrill is introducing a new advisory product for the ultra-rich that will combine brokerage and investment-banking services. Last month, Merrill also said it plans to start new funds to invest in global real estate and infrastructure, chasing Goldman and Morgan Stanley as investors seek more alternatives to stocks and bonds.