Morgan Stanley reported a 30 per cent year-on-year fall in third-quarter internet earnings, marking its longest streak of declines since 2019 because it continues to endure from a drop-off in funding banking charges.
The Wall Street financial institution mentioned on Friday its third-quarter internet earnings was $2.6bn, or $1.47 a share, down from $3.7bn, or $1.98 a share, in the identical interval final yr. Analysts had forecast quarterly internet earnings of $2.7bn, or $1.52 a share, in accordance with information compiled by Bloomberg.
The financial institution’s internet revenues for the quarter had been $13bn, down 12 per cent from $14.8bn a yr earlier, and barely beneath analysts’ expectations of $13.2bn.
“While investment banking and investment management were impacted by the market environment, fixed income and equity navigated challenging markets well,” Morgan Stanley chief government James Gorman mentioned in an announcement.
The declines replicate partly the stellar numbers posted in 2021 when banks like Morgan Stanley benefited from report dealmaking exercise. However, mergers and acquisitions and new inventory market listings have slowed greater than financial institution executives had been anticipating at first of the yr.
Investment banking income fell 55 per cent to $1.3bn, barely forward of analysts’ estimates of $1.2bn. Revenues from buying and selling, which benefited from latest market volatility, had been down 3 per cent at $4.5bn, beneath analysts’ estimates for $4.8bn.
The financial institution additionally took $35mn in provisions for credit score losses, together with markdowns on loans being held on the market to fund bridge financing for offers like leveraged buyouts. Morgan Stanley is the lead financial institution serving to to finance Elon Musk’s $44bn takeover of Twitter, a deal that would generate losses within the lots of of thousands and thousands of {dollars} or extra for the lenders.
Revenues in wealth administration, which incorporates on-line buying and selling platform ETrade, had been up 3 per cent at $6.1bn, in keeping with estimates for $6.1bn. In funding administration, which homes Eaton Vance following Morgan Stanley’s acquisition of the cash supervisor final yr, income shrank 20 per cent to $1.2bn, beneath estimates of $1.4bn.
Morgan Stanley’s inventory was down 2.8 per cent in early buying and selling following Wall Street’s opening bell on Friday.
Source: www.ft.com