Source: TheGuardian
Morgan Stanley’s profits have slumped for the second consecutive quarter as uncertainty about the timing of a US interest rate rise and concerns about China’s cooling economy drive investors from bond, currency and commodity markets.
The last of the big US banks to release third-quarter results, it said earnings applicable to common shareholders had fallen 42.4% to $939m (£606m), or 48 cents a share, from $1.63bn, or 83 cents a share, a year earlier. Analysts had been expecting 62 cents a share.
Consolidated net revenue fell 12.8% to $7.77bn in the three months to 30 September, and trading revenue fell about 17% to $2.03bn.
Morgan Stanley shares were down 4.9% in pre-market trading on Monday.
“The volatility in global markets in the third quarter led to a difficult environment, impacting in particular our fixed income business and our Asia merchant banking business,” the bank’s chief executive, James Gorman, said in a statement.
Morgan Stanley joins its rivals Goldman Sachs, Citigroup, Bank of America and JPMorgan Chase in reporting a drop in trading revenue, capping a downbeat quarter for six big US banks.
Only Wells Fargo managed to increase its revenue, though Citigroup turned in the biggest rise in net profit, largely on the back of cost cuts.
Revenue from investment banking, a traditional strength for Morgan Stanley, fell 15.3% to $1.31bn in a strong mergers and acquisitions market. The bank ranked second globally after Goldman in mergers advisory volumes in the first nine months of the year, according to Thomson Reuters data.