Merrill Lynch launches crisis management campaign
Merrill Lynch has been forced to run a crisis management campaign reassuring customers and investors that the US bank is “still bullish” following a “challenging few months”. The campaign follows the departure of chief executive Stan O’Neal last month after the company was forced to admit a $7.9bn (£3.95bn) exposure to bad debt.
The ad has appeared in national newspapers, including the Financial Times, and says: “Why Merrill Lynch is still bullish on Merrill Lynch”.
The ad continues: “These have been a challenging few months, not just for Merrill Lynch but for many companies around the financial industry. But our strength as a company suggests any setback will be overcome.”
It says the bank’s financial position and liquidity remain strong and that even with “adverse” mortgage-related results in the third quarter, the company’s net earnings totalled $2bn (£1bn) and net revenues $20bn (£10bn) for the first nine months of the year.
It adds: “Time and again in our 93-year history, we have survived tumultuous times and tough markets and emerged the stronger for it.”
Merrill Lynch was one of the first to repackage sub-prime housing debt into tradable securities. The sector has been hit over the past year as the number of mortgage defaults has hit record highs and the value of these securities has plummeted.
The effect of the sub-prime crisis has been felt across the world. In the UK, Northern Rock was forced to ask the Bank of England for an emergency loan because of its reliance on aggressively building its mortgage business.
Northern Rock, which is being pursued by a number of suitors, including the former Abbey chief executive Luqman Arnold, launched its own crisis management campaign aimed at reassuring customers in September, as revealed on marketingweek.co.uk.
