Bank of America (BofA) is set to dissolve Merrill Lynch & Co as a legal entity five years after acquiring it but will keep the brand name.
The merger could come as early as the fourth quarter of the year and BofA will take on all of Merrill’s bank obligations and debt, according to a recent regulatory filing.
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The move is aimed at streamlining BofA’s corporate structure and reducing costs.
BofA is simplifying its structure after CEO Brian Moynihan’s predecessor bought Merrill Lynch in 2009. Merging the legal entity could help Moynihan hit his US$8 billion-a-year cost-cutting target and comply with regulators who want to make the banks easier to resolve in a crisis.
This move could help the bank avoid some legal and regulatory expenses, including having to file separate reports with the US securities regulator.
"This will have no impact on how we serve our customers and clients, and it will have no impact on the Merrill Lynch-branded businesses," said Jerry Dubrowski, a spokesman for Charlotte, North Carolina-based BofA.
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By GlobalDataIf the restructuring does occur, it is not expected to impact Merrill’s advisers, said BofA spokeswoman Susan McCabe.
Merrill does business under its broker-dealer, Merrill Lynch Pierce Fenner & Smith Inc. "There is no change there," McCabe added.
The bank does not anticipate a reduction in personnel who deal with regulatory reporting or compliance.
