Profits at Merrill Lynch's IFSC unit rise by 17%

The IFSC unit of the Wall Street bank Merrill Lynch has reported a sharp increase in pretax profits, which rose last year by more than 17 per cent to $402.63 million (€337.18 million).

Merrill Lynch Capital Markets Bank, whose directors include former Department of Taoiseach head Paddy Teahon, said in a filing to the Companies Office that it did not pay a dividend last year.

The head office of the unit, which employs 182 staff, is at the Treasury Building on Lower Grand Canal Street in Dublin. It has branches in Frankfurt and Milan.

The 2004 results from the Irish operation came as its parent in New York reported a 60 per cent rise in third-quarter pretax profits this year, delivering strong performances across all its businesses.

Pretax profits for the quarter rose to $1.9 billion, while net profits were up 49 per cent at $1.4 billion.

Earnings per share were $1.54 compared with $1.01 a share last time, and per diluted share were up 51 per cent at $1.40.

"These are the highest quarter earnings per diluted share, pretax earnings and net earnings Merrill Lynch has ever generated," the bank said.

The Irish unit carries out general capital markets banking business, trades debt derivatives and other instruments, sells global debt products and provides loans to the corporate market.

It had operating profits of $487 million last year, up from $428.5 million in 2003. The operating profit in 2004 included dealing profits of $428.74 million, all of which were made in the Dublin office.

Some $386.17 million of the 2004 pretax profits were made in Ireland and another $16.46 million were made elsewhere in Europe.

Merrill Lynch Capital Markets Bank Ltd had operating expenses of $84.49 million and taxes of $59.78 million, $39.69 million of which were paid in Ireland.

The 2004 post-tax profit of $342.85 million was up from $299.82 million.

Mr Teahon became a director of the Irish unit last November, several months after well-known investment manager Gavin Caldwell joined the board.

The bank's other directors include chairman Michael D'Souza and managing director Michael Ryan.

The Wall Street bank's Irish unit paid fees totalling $131,000 to the directors in 2004, up from $70,000 a year earlier. The directors also received $214,000 in other emoluments.

Merrill Lynch's IFSC unit availed of a financial reporting exemption from detailing transactions and balances within group companies.