Bank of America Corp (NYSE:BAC) is planning to combine the business operations of its subsidiary Merrill Lynch to the parent company in an effort to streamline its structure, reduce complexity and costs.

Merrill Lynch

Merrill Lynch merger expected in fourth quarter

Based on the latest 10Q filing of Merrill Lynch with the Securities and Exchange Commission (SEC), the second largest financial institution in the United States might implement the planned merger as early as fourth quarter this year.

According to the regulatory filing, Bank of America Corp (NYSE:BAC) “has reduced and intends to continue to reduce the number of its subsidiaries including through intercompany mergers.”

Bank of America Corp (NYSE:BAC) said it will assume all of the obligations of Merrill Lynch including its outstanding debts inside and outside the United States, securities, and obligations related to outstanding trust preferred securities, and guarantees of outstanding non-U.S. debt securities issued by the subsidiaries of Merrill Lynch.

Merrill Lynch has approximately $62 billion long-term debt in the second quarter of the current fiscal year.

Merrill Lynch will no longer submit a separate regulatory filing with the SEC if the merger occurs. However, the bank said there is no assurance that the merger will take place, and if it happens, it would be subject to applicable regulatory consents, approvals, and closing conditions.

Bank of America’s acquisition of Merrill Lynch

Bank of America Corp (NYSE:BAC) acquired Merrill Lynch under the leadership of its former chairman and chief executive officer, Ken Lewis in 2009.  Its objective was to enhance the bank’s wealth management, investment banking, and international capabilities.

Commenting on the planned merger, David Hendler, analyst at Credit Insights Inc. said, “Less complex structures would increase the success of resolution planning via living wills in the case of potential worst-case financial distress scenarios.”

Bank of America Corp (NYSE:BAC) intends to maintain the Merrill Lynch brand. The bank uses the brand for its investment bank and retail brokerage business.

During the second quarter, Bank of America Corp (NYSE:BAC) reported financial results that beat the consensus estimates of Wall Street analysts. The bank report$0.32 earnings per share on $22.9 billion revenue.  The consensus estimate was $0.25 earnings per share on $22.8 billion revenue.

Shares of Bank of America Corp (NYSE:BAC) are trading around $14.39 per share, up by nearly 1% on Friday afternoon trading in New York.