Merrill may have to raise capital

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He said his earlier comments had been misunderstood.

"When we said we weren't going to raise more capital, we said we were adequately capitalised at that point in time. If we lose more money going forward, we may have to raise more money, and that was always true."

Last week, Merrill sold more than $8.55 billion (£4.36 billion) in shares to boost its capital after selling $30.6 billion in repackaged debt to private equity firm Lone Star at a knockdown price.

Merrill financed 75% of the purchase price and that was responsible for 70% of Merrill's losses over the last 12 months, Thain told CNBC.

Merrill posted a $4.89 billion quarterly loss last month — its fourth consecutive quarter of losses — but Thain expects to return to profitability soon.

He said he was reluctant to cut the dividend, which now gives a yield on the company's stock of about 5.3%.