The buyout of Merrill Lynch will give Bank of America (BankAm) access to the financial power house’s huge wealth management and broking business in India. The bank was not present in this space in the country.
The US merger would mean that Bank of America would have the largest brokerage in the world with more than 20,000 advisors and about $2.5 trillion in client assets, and there is bound to be a huge rub-off effect in India, analysts said.
Merrill Lynch, which owns 90 per cent of DSP Merrill Lynch, mainly operates in wealth management, broking, fixed income and investment banking in India.
DSP Merrill Lynch recorded a net profit of Rs 228.75 crore as on March 31, 2007. The company’s capital, reserves and loans together accounted for about Rs 3,470.95 crore in India as at the end of March 2007. The company’s India income stood at Rs 975.51 crore for the same period.
| DSP MERILL LYNCH |
| * Present in India since 1984 |
| * DSP and Merrill Lynch tie up for India operations in 1995 |
| * Five branches (excluding the contact offices) plus one office for Merrill Lynch (India) Technology Serives Pvt. Ltd in Mumbai |
| * About 600 employees |
| *figures as on March 31, 2007 |
The mood among Merrill staff in India was a mix of anxiety and some initial optimism over the bank’s sale to Bank of America. “Morale has actually lifted after news of Bank of America taking us over,” said a Merrill employee in Mumbai.
“One, the uncertainty ends about Merrill’s survival and, two, we can actually look forward to Bank of America strengthening or expansion in India,” he said.
Analysts expect some retrenchment at Merrill’s India operations after the deal. Others said it would make little difference to Merrill staffers as BankAm has no significant presence in India.