Wall Street bank Merrill Lynch has ridden the merger boom to report close to its highest ever quarterly income of $9.9 billion (£4.94 billion). The only quarter that just beat it - the third quarter of last year - was flattered by a one-off $2 billion gain from selling its investment management arm.

First-quarter profit was $2.11 billion up from $432 million a year ago when it was hit by compensation expenses and revenue rose 24 per cent to $9.85 billion.

Merrill Lynch was the last of the five major Wall Street banks to report first-quarter results, and the firm extended the trend of strong earnings in the industry. Goldman Sachs had a record first quarter, while Morgan Stanley, Lehman Brothers and Bear Stearns all reported healthy first-quarter growth

Merrill's revenue from global markets and investment banking rose to a record 43 per cent from the year-ago period to $6.5 billion.

Revenues from mortgage-related activities, hit by the fall out in the US sub-prime mortgage market, has declined, but the company said revenues from non-prime mortgages, in aggregate, made up less than 1 per cent of its revenue over the past five quarters.

Revenue from global wealth management also surged, rising 16 per cent to $3.4 billion.

Stan O'Neal, chairman and chief executive said: "This was a terrific quarter. In an environment which was volatile at times, we took full advantage of market opportunities."

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