NEW YORK, Sept 10 (Reuters) - Merrill Wealth Management

is creating a new division to expand credit offerings to its

wealthier clients, taking advantage of the growing demand for

such products among the super rich, senior executives said on

Wednesday.

The group will begin with around 20 bankers, but may expand

over time.

Bank of America's ( BAC ) wealth management businesses, which

include Merrill and BofA's private bank, registered a $16

billion increase in client loans to $241 billion in the second

quarter from a year earlier.

Wealthy clients with dozens of millions invested at Merrill

Lynch demand credit for different reasons than regular retail

customers. The most common are to avoid large tax liabilities

that would be created when cashing out on long-term investments,

pay other taxes without divestitures, potential losses on sales

of illiquid assets or the desire to keep investing in stocks as

market indexes reach all-time highs.

"In some cases we help finance large timely purchases, such

as a stake in a sports team, a new company or real estate," said

Kurt Niemeyer, who will lead the new group, reporting to Greg

McGauley, head of Merrill Private Wealth Management,

International and Institutional Groups. Loans can also help in

succession and estate planning.

Custom loans tailored to clients' unique requirements reached an

all-time high, Lindsay Hans, president and co-head of Merrill

Wealth Management, said. "Around 85% of those loans are extended

to investors who had never previously used credit with us."

The maturity in the loan portfolio for Merrill's wealthiest

investors is highly diverse, according to McGauley, depending on

the purpose of the credit, varying from short-term liquidity

instruments to mortgages or multi-year loans.