Bloomberg reports that second-quarter profit was $591m the New York-based company said in a statement Thursday.
The 48% drop in trading revenue, which plunged to the lowest level since Chief Executive Officer James Gorman took over in January 2010, compares with an increase of more than 11% at Goldman Sachs. Morgan Stanley is trading at about half its liquidation value and has dropped the most this year of any of the 10 largest U.S. lenders.
'It was an exceptionally difficult quarter with all of the problems, particularly in Europe', Gary Townsend, head of Hill Townsend Capital LLC, said in a Bloomberg Radio interview before results were released. 'It really does require that we have a rebound, if that’s possible, in the economy' before Morgan Stanley might recover, Townsend said.
Morgan Stanley fell 5.9 percent to $13.16 at 7:59 a.m. in New York. The shares were down 7.5% this year through Wednesday, after falling 44% in 2011, and are 53% below where they traded when Gorman took over.
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Morgan Stanley Misses Estimates as Trading Revenue Plunges
Reuters also reports that Morgan Stanley has posted $3.7bn in collateral and other payments since Moody's downgraded the investment bank's credit ratings, though the pace of collateral calls has slowed, Chief Financial Officer Ruth Porat said in an interview.
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