Merrill Lynch Asset Management today reported a $21.8 billion, or 4%, drop in total assets under management to $467.2 billion during the third quarter ended Sept. 25.
Merrill received $2.2 billion in new assets, excluding reinvested dividends, but the market decline resulted in a net drop in business.
Asset management and portfolio service fees also were down 4% to $995 million in the second quarter ended June 26.
The full company reported a net earnings loss of $164 million, which it attributed to a $288 million expense related to staff reductions. The company estimates that cutting 3,400 workers, or 5% of its work force, will save the firm $500 million a year, according to company reports.
Earnings were bitten the hardest by a 21% drop in Merrill's investment banking business and a 72% drop in principal transactions.