Merrill Lynch reported strong growth in net earnings for the first quarter of 2007, driven by net revenues of US$9.9 billion.

Net revenues were up 24% from the prior-year period and up 14% from the fourth quarter of 2006, with
increases both year-over-year and sequentially in both Global Markets and Investment Banking and Global Wealth Management, and in all regions.

These are the second-highest quarterly net revenues Merrill Lynch has ever generated, only US$51 million lower than in the third quarter of 2006, when net revenues included a US$2 billion one-time, pre-tax gain arising from the merger of Merrill Lynch Investment Managers with BlackRock Inc.

First quarter 2007 net earnings were US$2.2 billion, up 354% from the first quarter of 2006, or up 31% excluding the one-time expenses in the prior-year period. Net earnings were down 8% from the fourth quarter of 2006, which included a lower compensation expense ratio. The pre-tax profit margin for the first quarter of 2007 was 31.4%, and the annualized return on average common equity was 23.3%.

“This was a terrific quarter. In an environment which was volatile at times, we took full advantage of market opportunities and delivered value to our clients and our shareholders,” said Stan O’Neal, chairman and chief executive officer. “Our product capabilities and geographic reach are stronger and broader now than at any point in our history, and we continue to make investments to further enhance our franchise. We remain focused on disciplined growth to capitalize on the positive secular trends we continue to see unfold.”

Global Markets and Investment Banking generated record revenues, both overall and in each of its three major business lines, for the first quarter of 2007, as the business continued to execute on targeted organic and inorganic investments for diversification and profitable growth, executed with strong operating discipline in a favorable market environment. Non-U.S. revenues, which continue to comprise more than half of GMI’s total net revenues, grew significantly faster than U.S. revenues in the period.

Global Wealth Management also generated strong revenue and pre-tax earnings growth in the first quarter of 2007. The growth was driven by Global Private Client, which increased its net revenues year-over-year for the tenth consecutive quarter, as well as by the contribution of Global Investment Management, including earnings from Merrill Lynch’s investment in BlackRock.