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Merrill Lynch stops lending via UK arms

Merrill Lynch has temporarily suspended new lending at its two UK subsidiaries, Mortgages Plc and Wave.

It is the latest US investment bank to pull back its UK operations as a result of the liquidity squeeze.

Bear Stearns’ UK subsidiary Rooftop closed last month, saying its origination business had become unsustainable.

A source close to Merrill Lynch says its decision will result in around 200 redundancies across the two firms. The investment bank is understood to have begun consultations with affected staff.

Merrill Lynch has also announced job cuts from its European fixed income and debt capital markets groups. It plans to cut around 4,000 jobs across its global operations.

Brentchase Financial Services mortgage specialist Mike Fitzgerald says: “I do not think anyone is surprised by this announcement. I still think that we have got a few more redundancies to happen.

“US investors come and go but I think that they will return to the UK once things start to look good again.”

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