Morgan Stanley profit plunges 42% as trading revenue slumps

Bengaluru: Wall Street bank Morgan Stanley’s profit slumped for the second straight quarter as investors fled the bond, currency and commodity markets amid uncertainty about the timing of a US interest rate hike and concerns about China’s cooling economy.

Morgan Stanley, the last of the big US banks to release third-quarter earnings, said on Monday its earnings applicable to common shareholders fell 42.4%, to $939 million, or 48 cents per share, from $1.63 billion, or 83 cents per share, a year earlier.

Analysts on average had expected earnings of 62 cents per share, according to Thomson Reuters I/B/E/S. It was not immediately clear if the reported figures were comparable.

Consolidated net revenue fell 12.8% to $7.77 billion.

Morgan Stanley joins archrival Goldman Sachs Group Inc. as well as Citigroup Inc., Bank of America Corp. and JPMorgan Chase & Co. in reporting a drop in revenue from trading.

The results capped a generally downbeat quarter for the six big US banks. Among them, only Wells Fargo managed an increase in revenue while Citi turned in the biggest rise in net profit, largely due to cost cuts. Reuters