US banking trio produce strong set of results

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The Independent Online
THREE of Wall Street's largest investment banks posted strong results for the second quarter of 1992 yesterday but fell short of the record performance that the industry boasted in the first three months of the year.

Securities analysts said the results were good considering the decline in trading and underwriting activity since the first quarter peak, but warned that the industry as a whole would probably suffer from 'summer doldrums' for the rest of the year.

Merrill Lynch, America's largest securities firm, saw profits rise to dollars 227m ( pounds 119.4m), or dollars 1.98 a share, from dollars 184m, or dollars 1.58 a share, in the second quarter of 1991. Investment banking revenues rose 27 per cent to dollars 399m, with underwriting revenues topping the record set in the first quarter despite the slowdown in initial public offerings.

Merrill said the improved earnings for the first half of the year reflected its 'strong, sustained market position'. Trading profits were up and mergers activity began to show some recovery. Gains in retail broking, however, grew at a slower pace, analysts noted.

Paine Webber had an excellent quarter, making dollars 45m, or dollars 2.47 a share, compared with dollars 33m or dollars 1.38 a share in the same period last year. Revenues for its capital markets business rose 34 per cent and its investment banking business boomed thanks to 'the strong underwriting environment,' Donald Marron, chief executive, said.

Smith Barney, a division of Primerica Corporation, posted a 13 per cent increase in profits over the second quarter of 1991, earning dollars 42m compared with dollars 37m. Performance was strong across the board, Sanford Weill, Primerica's chief executive, said, although not as strong as the first quarter's record profitability. 'Despite the persistent sluggish economy, we continue to grow.'

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