Morgan Stanley's second-quarter profit slumped 30 per cent, falling short of analysts' estimates for the first time in nine quarters, as its investment banking business suffered from a slump in global dealmaking.
The banking sector is reeling from Russia's invasion of Ukraine, a surge in the price of oil above $100 a barrel and the US Federal Reserve rate hikes, triggering fears of a recession.
But Morgan Stanley chief executive James Gorman told analysts that the current environment is not as bad as the 2008 financial crisis, and stressed his bank was in good shape.
“I think it's important to say, though, it is not 2008 … this is a different type of financial stress in the system, and frankly the banking sector is much stronger,” he said.
While he warned that the US might head into some form of recession, it is unlikely to be “deep and dramatic.”
Morgan Stanley's investment banking revenue plunged 55 per cent in the second quarter, mirroring a similar drop at its larger Wall Street rival JP Morgan Chase and eclipsing an 8 per cent rise in trading revenue.
The Fed's aggressive actions to contain runaway inflation have rattled global financial markets, curbing companies' appetite for deals, while also slowing their efforts to raise cash through stock and debt offerings.
The turmoil has upended a lucrative revenue stream for investment banks, whose results are also facing tough comparisons with the second quarter of last year when accommodative monetary policies led to record levels of deals.
Banks could see further pain down the road, as the latest report on Wednesday showed inflation had accelerated again in June, probably putting more pressure on the Fed to raise rates.
“Larger transactional M&A will really be dependent on just price discovery and how markets open up over the course of the next six months,” Morgan Stanley's chief financial officer Sharon Yeshaya said.
The bank's wealth management business, which is seen as a durable source of revenue, did little in the quarter to offset the slump in dealmaking. Revenue from the business dipped 6 per cent and contributed to a 11 per cent slide in Morgan Stanley's net revenue.
Morgan Stanley's equity and fixed income underwriting revenue plunged 86 per cent and 49 per cent, respectively.
Overall, the bank reported a profit of $2.4 billion, or $1.39 per share, for the quarter ended June 30, compared with $3.4bn, or $1.85 per share, a year earlier.
Analysts, on average, had expected a profit of $1.53 per share, according to data from Refinitiv, although they were sanguine about the result which came during a difficult market environment.
“We should be breathing a sigh of relief as these are the kinds of markets in which historically things might go way off the rails for large investment banks,” said Oppenheimer in a research note.
The bank also said it had recorded a $200 million expense related to a regulatory matter tied to the use of unapproved personal devices and record-keeping requirements.
Provision for credit losses this quarter was $101m, up from $73m a year earlier.
Morgan Stanley's shares were down 1.5 per cent at $73.84 in morning trade. They have plunged nearly 24 per cent so far this year.
Name: Peter Dicce
Title: Assistant dean of students and director of athletics
Favourite sport: soccer
Favourite team: Bayern Munich
Favourite player: Franz Beckenbauer
Favourite activity in Abu Dhabi: scuba diving in the Northern Emirates
KILLING OF QASSEM SULEIMANI
Company%C2%A0profile
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Company profile
Date started: 2015
Founder: John Tsioris and Ioanna Angelidaki
Based: Dubai
Sector: Online grocery delivery
Staff: 200
Funding: Undisclosed, but investors include the Jabbar Internet Group and Venture Friends
Company%20profile
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RESULT
Argentina 0 Croatia 3
Croatia: Rebic (53'), Modric (80'), Rakitic (90' 1)
How to wear a kandura
Dos
- Wear the right fabric for the right season and occasion
- Always ask for the dress code if you don’t know
- Wear a white kandura, white ghutra / shemagh (headwear) and black shoes for work
- Wear 100 per cent cotton under the kandura as most fabrics are polyester
Don’ts
- Wear hamdania for work, always wear a ghutra and agal
- Buy a kandura only based on how it feels; ask questions about the fabric and understand what you are buying
The five pillars of Islam
1. Fasting
2. Prayer
3. Hajj
4. Shahada
5. Zakat
MATCH INFO
Uefa Champions League final:
Who: Real Madrid v Liverpool
Where: NSC Olimpiyskiy Stadium, Kiev, Ukraine
When: Saturday, May 26, 10.45pm (UAE)
TV: Match on BeIN Sports
More coverage from the Future Forum
Fight card
1. Featherweight 66kg: Ben Lucas (AUS) v Ibrahim Kendil (EGY)
2. Lightweight 70kg: Mohammed Kareem Aljnan (SYR) v Alphonse Besala (CMR)
3. Welterweight 77kg:Marcos Costa (BRA) v Abdelhakim Wahid (MAR)
4. Lightweight 70kg: Omar Ramadan (EGY) v Abdimitalipov Atabek (KGZ)
5. Featherweight 66kg: Ahmed Al Darmaki (UAE) v Kagimu Kigga (UGA)
6. Catchweight 85kg: Ibrahim El Sawi (EGY) v Iuri Fraga (BRA)
7. Featherweight 66kg: Yousef Al Husani (UAE) v Mohamed Allam (EGY)
8. Catchweight 73kg: Mostafa Radi (PAL) v Ahmed Abdelraouf of Egypt (EGY)
9. Featherweight 66kg: Jaures Dea (CMR) v Andre Pinheiro (BRA)
10. Catchweight 90kg: Tarek Suleiman (SYR) v Juscelino Ferreira (BRA)
Killing of Qassem Suleimani
UAE currency: the story behind the money in your pockets
Emergency phone numbers in the UAE
Estijaba – 8001717 – number to call to request coronavirus testing
Ministry of Health and Prevention – 80011111
Dubai Health Authority – 800342 – The number to book a free video or voice consultation with a doctor or connect to a local health centre
Emirates airline – 600555555
Etihad Airways – 600555666
Ambulance – 998
Knowledge and Human Development Authority – 8005432 ext. 4 for Covid-19 queries
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
The five pillars of Islam
UAE currency: the story behind the money in your pockets
The years Ramadan fell in May
Brief scores:
Toss: South Africa, chose to field
Pakistan: 177 & 294
South Africa: 431 & 43-1
Man of the Match: Faf du Plessis (South Africa)
Series: South Africa lead three-match series 2-0
Company%20profile
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Blackpink World Tour [Born Pink] In Cinemas
Starring: Rose, Jisoo, Jennie, Lisa
Directors: Min Geun, Oh Yoon-Dong
Rating: 3/5
Dates for the diary
To mark Bodytree’s 10th anniversary, the coming season will be filled with celebratory activities:
- September 21 Anyone interested in becoming a certified yoga instructor can sign up for a 250-hour course in Yoga Teacher Training with Jacquelene Sadek. It begins on September 21 and will take place over the course of six weekends.
- October 18 to 21 International yoga instructor, Yogi Nora, will be visiting Bodytree and offering classes.
- October 26 to November 4 International pilates instructor Courtney Miller will be on hand at the studio, offering classes.
- November 9 Bodytree is hosting a party to celebrate turning 10, and everyone is invited. Expect a day full of free classes on the grounds of the studio.
- December 11 Yogeswari, an advanced certified Jivamukti teacher, will be visiting the studio.
- February 2, 2018 Bodytree will host its 4th annual yoga market.
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Sun jukebox
Rufus Thomas, Bear Cat (The Answer to Hound Dog) (1953)
This rip-off of Leiber/Stoller’s early rock stomper brought a lawsuit against Phillips and necessitated Presley’s premature sale to RCA.
Elvis Presley, Mystery Train (1955)
The B-side of Presley’s final single for Sun bops with a drummer-less groove.
Johnny Cash and the Tennessee Two, Folsom Prison Blues (1955)
Originally recorded for Sun, Cash’s signature tune was performed for inmates of the titular prison 13 years later.
Carl Perkins, Blue Suede Shoes (1956)
Within a month of Sun’s February release Elvis had his version out on RCA.
Roy Orbison, Ooby Dooby (1956)
An essential piece of irreverent juvenilia from Orbison.
Jerry Lee Lewis, Great Balls of Fire (1957)
Lee’s trademark anthem is one of the era’s best-remembered – and best-selling – songs.
UAE currency: the story behind the money in your pockets
THE%20SPECS
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Sam Smith
Where: du Arena, Abu Dhabi
When: Saturday November 24
Rating: 4/5
The biog
Name: Greg Heinricks
From: Alberta, western Canada
Record fish: 56kg sailfish
Member of: International Game Fish Association
Company: Arabian Divers and Sportfishing Charters
UK%20record%20temperature
%3Cp%3E38.7C%20(101.7F)%20set%20in%20Cambridge%20in%202019%3C%2Fp%3E%0A
Countdown to Zero exhibition will show how disease can be beaten
Countdown to Zero: Defeating Disease, an international multimedia exhibition created by the American Museum of National History in collaboration with The Carter Center, will open in Abu Dhabi a month before Reaching the Last Mile.
Opening on October 15 and running until November 15, the free exhibition opens at The Galleria mall on Al Maryah Island, and has already been seen at the Jimmy Carter Presidential Library and Museum in Atlanta, the American Museum of Natural History in New York, and the London School of Hygiene and Tropical Medicine.
More from Neighbourhood Watch:
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
The specs
- Engine: 3.9-litre twin-turbo V8
- Power: 640hp
- Torque: 760nm
- On sale: 2026
- Price: Not announced yet
COMPANY%20PROFILE%20
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