Merrill Lynch & Co. appointed JPMorgan Chase & Co.'s Michael Nierenberg to head its global-mortgages and securitized-products businesses, its latest step in trying to recover from escalating mortgage losses.
In addition, Merrill said James De Mare will join the firm from Citigroup Inc. (C) to run its mortgage trading operations.
Shares of Merrill were recently up 2% to $28.91.
The appointments signal Merrill is moving to bring in executives from rival firms - rather than promoting from within - in its latest effort to turn around its ailing mortgage-related operations amid the credit crisis and housing downturn.
Spokeswoman Danielle Robinson said while the positions aren't new to the company, Nierenberg and De Mare are not succeeding anyone directly as their duties were most recently served on an interim basis by other bankers.
"Both Mike and Jim are among the most highly skilled and knowledgeable people in the mortgage business," Thomas K. Montag, Merrill's head of global sales and trading, said in a statement.
Nierenberg most recently served as head of global securitized products at JPMorgan following its buyout of Bear Stearns earlier this year. Previously, he held a number of positions at Bear Stearns, where he served since 1994, including head of interest rate and foreign exchange trading operations, co-head of structured products and co-head of mortgage-backed securities trading.
De Mare has been with Citigroup for 11 years. He most recently was the firm's global head of mortgage trading, overseeing the trading of all securitized products in the firm's fixed-income currencies and commodities group.
In the second quarter, Merrill recorded a loss of $4.65 billion, or $4.95 a share, one of the worst in its history and more than twice as steep as the loss for which analysts had been bracing. Already clobbered by subprime-related write-downs of more than $30 billion in the previous three quarters ended in March, Merrill took an additional $9.7 billion hit in the second quarter, which caused the bulk of the company's net loss.
John Thain, the former chief executive of stock exchange operator NYSE Euronext, took over at Merrill in December as the firm's mortgage losses were escalating. He quickly imposed new risk-management controls, brought in new talent and has made a slew of other changes. But the moves haven't yet led to a rebound in Merrill's overall performance. Merrill has had to raise $15.5 billion in new capital since Thain arrived and hasn't come close to turning a quarterly profit.