Additionally, Morgan Stanley now has a market capitalization of 66.32B. At J.P. Morgan they were down by 35%.
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Morgan Stanley’s wealth management business stalled in the third quarter, with revenue from transactions decreasing 28.5% as skittish investors stayed away from the market.
The intraday decline was the biggest since August 24 and pushed this year’s drop to 17 per cent, the most among banks in the Standard & Poor’s 500 Financials Index. Fee based asset flows for the quarter were $7.7 billion.
The compensation bill for the first nine months stands at $23 billion, down from $23.3 billion this time a year ago.
Morgan Stanley was the last major USA bank to report during this ongoing earnings season, adding further gloom to investors’ perception of worldwide trade as not as profitable as it once used to be for the US-based corporations. On May 12, 2014, MSCI Inc completed the repurchase of the Company’s entire share capital from Morgan Stanley. No. Well, maybe not.
CEO James Gorman said the quarter was “obviously disappointing”, due to volatility in global markets. Average advisor assets also took a hit.
Global Business Machines Corp. releases quarterly results after markets close today, among 117 S&P 500 companies reporting earnings this week.
Morgan Stanley’s Q3 results can be seen here.
However, Gorman signed off with the slightly ominous: “If we do not see opportunity, we will not keep the balance sheet in-house”.
“With October’s three-point uptick, builder confidence has been holding steady or increasing for five straight months”.
Morgan Stanley’s Investment Management saw net revenues fall from $667 million last year to $274 million this year. The major drawback that led to the banking firms’ dismal performance was the drop in revenue from its fixed-income trading division.
Revenue fell to $7.33 billion from $8.54 billion a year ago.
Much of this was down to declines in cash equities, which were subject to “sporadic bouts of risk aversion” from clients, according to CFO Jonathan Pruzan.
Bank of America, Wells Fargo, and Citigroup each reported earnings that were higher than analysts’ expectations for the third quarter.
Brent crude was down $1.33 at $49.13 a barrel, while U.S. crude was down 81c at $46.45 per barrel.
The move followed a broader shuffling of key wealth management and securities executives this year as part of a firm-wide effort to get those two businesses to work more closely. This doesn’t necessarily mean big hiring, however.
Advisor headcount for the quarter was up by 36 reps to 15,807.
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That held true for both Morgan Stanley and Merrill in the third quarter. Another significant component impacting this quarter’s earnings was the reversal of previously accrued carried interest associated with the company’s Asia private equity business which reflected weaknesses across that geographic region. Third quarter earnings at the bank missed analyst expectations by a few margin.
