Analysts see additional write-down at Merrill Lynch

(Reuters) - At least two analysts said Merrill Lynch & Co Inc, the world's largest retail brokerage, could face additional write-downs in the coming quarters if market conditions do not improve.

"Further deterioration in the credit markets, particularly in the mortgage markets, may result in additional write-downs in upcoming quarters," Goldman Sachs analyst William Tanona said in a note to clients.

Wachovia Capital Markets analyst Douglas Sipkin believes that potential write-down following recent results could hurt Merrill's stock in the near term.

However, following the announcement of Merrill's acquisition by Bank of America Corp, Goldman's Tanona removed the stock from Americas conviction sell list.

Tanona expects investment banks and other financial institutions to report very weak third-quarter results over the next month.

Merrill Lynch agreed to be taken over by Bank of America in an all-stock deal worth $50 billion, after one of the worst-ever weekends on Wall Street that saw investment banking giant Lehman Brothers Holdings Inc file for bankruptcy protection.

In July, Merrill posted a much larger-than-expected $4.89 billion quarterly loss after writing down soured debt, and unveiled plans to sell billions of dollars in assets

Tanona rates the stock of Merrill "neutral" and Sipkin rates it "market perform."

Shares of the company closed at $17.06 Monday on the New York Stock Exchange.

(Reporting by Anurag Kotoky in Bangalore; Editing by Anil D'Silva)