Morgan Stanley: profit falls as virus hits business

(CercleFinance.com) - Profit for Morgan Stanley slumped in the first quarter as the US investment bank saw its operations hit by the COVID-19 pandemic.


Net profit fell to 1.7 billion dollars, or 1.01 dollar per share, from 2.4 billion dollars - or 1.39 dollar per share - in the same period a year ago.

Net revenues also fell to 9.5 billion dollars for the first quarter ended 31 March, compared with 10.3 billion dollars a year ago.

Rivals Goldman Sachs, Bank of America and JPMorgan Chase have already reported lower profit in the past few days, generally due to higher provisions for credit losses.

Morgan Stanley - whose chairman and CEO James Gorman was diagnosed with the coronavirus in March, has fully recovered since - said the decline in asset prices, reduction in interest rates, credit deterioration, market volatility and reduced investment banking activity had the most immediate negative impacts on its first quarter performance.

However, the Wall Street bank also experienced significant decreases in the valuation of loans, it said, in turn prompting credit losses and lower net interest income.

Morgan Stanley said that it has voluntarily ceased its share repurchase program in the first quarter to better support lending to clients during the pandemic.

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