<html> <head><style type ="text/css">body { font-family: "Bloomberg Prop Unicode I", Verdana, sans-serif; font-size:125%; letter-spacing: -0.3pt; color: #FF9F0F; background-color: #000000; text-align: left; } p {line-height: 1.25em; max-width:900px; width:expression(document.body.clientWidth > 900? "900px": "auto" );} h1, h2, h3 { text-align: left; font-weight: normal; color: #FFFFFF; } h1 { font-size: 130%; } h2 { font-size: 115%; } h3 { font-size: 100%; } #bb-style { font-size: 90%; max-width:900px; width:expression(document.body.clientWidth > 900? "900px": "auto" ); } b, strong { font-weight: bold; } i, em { color: #FEC54A; } pre { font-family: "Andale Mono", "Monaco", "Lucida Console"; letter-spacing: -0.3pt; line-height: 1.25em; } table { border: 0; font-size: 90%; width: 100%; margin-left: auto; margin-right: auto; } td, tr { text-align: left; } td.numeric { text-align: right; } a:link { color:#53B2F5; text-decoration: none; } a:visited {color:#53B2F5} a:active {color:#53B2F5} a:hover {color:#53B2F5} </style> </head> <body> <p>By Jonathan Weil</p> <p>Why doesn't Bank of America Corp. break itself up? Its leaders should have plenty of motivation to try, assuming they believe their own balance sheet.</p> <p>With a $78 billion stock-market value, the company trades for 36 percent of its official book value -- meaning its net assets supposedly are worth almost three times as much as the market says the company is worth.</p> <p>The Wall Street Journal took a crack at answering the question in an <a href="http://online.wsj.com/article/SB10000872396390444130304577557183028589736.html?mod=WSJ_hp_LEFTWhatsNewsCollection">article</a> today. The most notable part of the explanation was something it said about Merrill Lynch.</p> <p>The article said Bank of America explored a possible breakup in 2010 and 2011, including whether to split off Merrill Lynch, the securities firm that it bought in 2009.The Journal went on to say that Bank of America Chief Executive Officer Brian Moynihan ultimately recommended to his company's board that doing so didn't make sense. (The newspaper said it got its information from unnamed "people close to" Bank of America.)</p> <p>"The company decided Merrill had become too big of a profit center and splitting it off could expose the brokerage firm to the sort of funding problems that killed off other Wall Street firms in 2008," the article said.</p> <p>What's curious about the anecdote is that Merrill isn't profitable today. We know this because Merrill still files its own separate financial reports with the Securities and Exchange Commission. Last quarter Merrill <a href="http://www.sec.gov/Archives/edgar/data/65100/000006510012000019/ml-3312012x10q.htm">reported</a> a net loss of $1.6 billion. It <a href="http://www.sec.gov/Archives/edgar/data/65100/000006510012000006/ml-12312011x10k.htm">posted</a> a $1.7 billion net loss for all of 2011.</p> <p>Too big a profit center? Whatever the reasons are for keeping Merrill Lynch now, it's hard to believe this still could be one of them.</p> <p>(<a href="http://topics.bloomberg.com/jonathan-weil/">Jonathan Weil</a> is a Bloomberg View columnist. <a href="https://twitter.com/#%21/JonathanWeil">Follow</a> him on Twitter.)</p> <p>Read more breaking commentary from Bloomberg View columnists and editors at <a href="http://www.bloomberg.com/view/the-ticker/">the Ticker</a>.</p> </body> </html>