In a trading statement Tuesday, Persimmon said it does not expect to make any significant writedowns on its land bank in the first-half results, which are due to be published in August.

Analysts had expected the housebuilder to announce writedowns of between 200 million pounds and 300 million pounds.

Persimmon said it will keep the value of its land bank under review over the next few months to take account of changes in trading conditions.

The company described the first six months of 2008 as "the most challenging period in Persimmon's recent history" and confirmed that it has cut 1,100 jobs since the start of the year.

Persimmon said its underlying operating margin declined to 14 percent in the first half from 20.8 percent last year, pressured by the sharp downturn in the housebuilding market.

In reaction, Merrill Lynch reiterated its 'neutral' stance on the group.

Merrill Lynch said Persimmon's trading update reads cautiously, but, critically, no worse than might have been expected.

The broker added that there are no writedowns expected for the first half but clearly risk remains in the medium term and the group refers to keeping the "land bank under constant review".

Merrill Lynch said it remains of the view that Persimmon is the best quality house builder, but sector news flow will likely remain cautious or downbeat, suggesting that short-term underperformance will likely remain a risk.

Cazenove retained its 'in-line' stance on Persimmon, saying there is no hiding place even for the best in class and market conditions are so poor that the group is focusing on cash and costs. joanne.frearson@thomsonreuters.com jf/ak

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Sipkin said that besides exposure to CDOs and monolines, Merrill should also experience deterioration of its subprime, Alt-A and leveraged loans.

He expects Merrill's retail business to report solid results for the second quarter, but doesn't think it will be enough to offset its weak banking business, given asset marks and decreased merger and acquisition activity.

Sipkin added that consideration of sales of its stakes in Blackrock Inc. and Bloomberg L.P. are a "negative" for Merrill, as they some of the "few remaining positive elements of the Merrill Lynch story amid the consecutive quarterly losses."

Merrill shares closed Monday at $30.36, and has lost 39% since the end of April. Tomi Kilgore tk1

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The long-term ratings and a stable outlook have been, however, reaffirmed for Citibank, the core banking arm of Citigroup, Crisil said in a statement.

Besides, the rating agency -- the Indian arm of global credit ratings major Standard and Poor's -- has left unchanged its ratings and outlooks for two Indian arms of ABN Amro and one each of foreign players like HSBC, BHW, DBS Bank, DSP Merrill Lynch, ING, Rabobank and Bank of Nova Scotia.

Crisil had previously said it was re-examining its ratings on 27 institutions whose ratings are linked to the global ratings of their foreign parents.

"This re-examination covered aspects like standalone profiles of Indian institutions, assessment of the strength of parent support and mapping of global ratings to Crisil scale." Crisil said it has completed the re-examination for 16 of these institutions and for the remaining 11 it is in the process of concluding its re-assessment.

Crisil said it has found that these foreign parent companies, however, remain committed to support their Indian operations should the need arise, despite the challenging global financial sector environment. The long-term ratings on two companies belonging to the DSP Merrill Lynch Group (DSP Merrill Lynch Ltd and DSP Merrill Lynch Capital Ltd) have been downgraded to AA+ (stable) from AAA (highest safety), and the outlook for these ratings has been revised to negative from stable.

Besides, the outlooks on the long-term ratings of four Citigroup companies -- Citicorp Capital Markets Limited, Citicorp Finance India Limited, Citicorp Maruti Finance Limited, and CitiFinancial Consumer Finance India Limited -- have been revised to negative from stable.

S&P has placed the Citigroup Rating on CreditWatch with negative implications. For the first quarter of 2008, Citigroup has announced a loss of 5.1 billion dollars, while in 2007, it posted a net profit of 3.6 billion dollars, a decline of 83 per cent from a year ago.

Crisil said that while it believes that CCML, CFIL, CMFL, and CCFIL -- the four Indian arms for which outlooks have been revised -- will continue to benefit from the strong support they receive from Citigroup, but the ratings on these companies could be downgraded if there is further deterioration in the credit profile of Citigroup.

The companies whose ratings and outlooks have been retained include ABN Amro Bank, ABN Amro Securities India Ltd, BHW Home Finance, Citibank, DBS Bank, DSP Merrill Lynch Securities Trading Ltd, ING Vysya Bank, Rabo India Finance, The Bank Of Nova Scotia and The Hongkong and Shanghai Banking Corporation Ltd (HSBC).