Drag on Merrill profit is forecast
- Share via
Merrill Lynch & Co.’s sub-prime mortgage unit, First Franklin Financial, could cut about $100 million from the brokerage’s third-quarter profit through a write-down of the lender’s value on the parent company’s books, an analyst said Tuesday.
Merrill Lynch declined to comment on the report by Sandler O’Neill analyst Jeff Harte.
First Franklin became the No. 3 U.S. sub-prime mortgage lender after Merrill Lynch bought the San Jose company in December for $1.3 billion. First Franklin originated $11.3 billion in sub-prime loans in the first half of 2007, behind industry leader Countrywide Financial Corp.’s $13.6 billion and the $12.3 billion of HSBC Finance, an affiliate of HSBC Holdings, according to National Mortgage News.
But like its competitors, First Franklin has cut jobs and closed branches this year as defaults and foreclosures on loans to borrowers with weak credit have escalated throughout the industry.
Filings with banking regulators also show First Franklin has lost money this year.
More to Read
Inside the business of entertainment
The Wide Shot brings you news, analysis and insights on everything from streaming wars to production — and what it all means for the future.
You may occasionally receive promotional content from the Los Angeles Times.