GLOBAL - Mercer Human Resource Consulting's profitability in the second quarter was "disappointing", according to parent company Marsh & McLennan Companies.

It said it was "addressing" the issue.

"Mercer Human Resource Consulting increased revenues, but profitability was disappointing," MMC said in its latest earnings report.

Consulting segment operating income fell to $124m (€96.7m) in the period from $130m a year before, while revenue was up 4% at $751m. Within the division, retirement consulting increased underlying revenues by 2%.

"Mercer HR's revenue growth, an increase in compensation expenses, including increased staff levels, contributed to a decline in segment profitability for the quarter," MMC added.

Asset management division Putnam - which saw a 10% decline in revenues and $6bn in asset redemptions - "performed as expected".

"We are encouraged about the positive trends in all of our businesses, except for profitability in Mercer HR, which we are addressing," MMC said.

Putnam revenues slipped to $339m, while assets under management fell to $180bn. It said: "Net redemptions were $6bn, which included $2.8bn due to the ending of Putnam's alliance with its Australian partner."

Overall, MMC reported net income of $172m, up from $166m. Consolidated revenues were unchanged at $3bn.