Morgan Stanley posts loss of more than $1.2b
Morgan Stanley said Wednesday it lost more than $1.2 billion during the second quarter as it took a charge to repay government bailout money. The investment bank was also hurt for a second straight quarter by the improving value of its own debt.
Morgan Stanley's trading profits and investment banking revenue, while strong, were unable to offset mounting charges during the second quarter, which also included losses tied to real estate investments.
The bank said its net loss after payment of preferred dividends was $1.26 billion, or $1.10 per share, during the quarter ended June 30. The New York-based bank earned $1.06 billion, or $1.02 per share, during the same quarter last year.
Analysts polled by Thomson Reuters, on average, forecast a loss of 49 cents per share for the quarter.
Morgan Stanley said underwriting revenues rose 19 percent to $855 million during the quarter. As credit markets have improved, more companies have tapped equity and debt markets to raise much-needed capital. Like competitor Goldman Sachs Group Inc., Morgan Stanley was able to take advantage of that pent-up demand for underwriting new offerings.
Revenue in Morgan Stanley's fixed income sales and trading division also rose. Revenue from the trading of interest rate, credit, currency and commodity products totalled $973 million in the second quarter, up 44 percent from a year earlier.