Merrill Lynch plans job cut at First Franklin Financial Corporation
18 Sep 2007
Mumbai:
Merrill Lynch &
Co. Inc, the world''s largest brokerage, has announced plans for a job cut as its
First Franklin Financial Corporation unit''s $1.3 billion bet on sub prime lending
was hit by the market meltdown.
Merrill Lynch declined to say how many jobs were being cut.
Merrill Lynch bought San Jose-California-based First Franklin in December at a high premium amid a meltdown in the market for risky subprime mortgages.
Reports filed with the US banking regulators show that First Franklin franchise Merrill Lynch Bank & Trust Co lost $111 million through the first half of 2007.
"We have adjusted our staffing levels to be in line with current business requirements," the company said in a statement.
First
Franklin relies on independent brokers to find borrowers and to submit loans applications.
This model keeps overhead costs lower than a branch-based approach. But Merrill''s
peers, including Lehman Brothers Holdings, have abandoned or sharply curtailed
funding loans sourced by independent brokers.