Morgan Stanley Topped $100 Million on One Trading Day in Quarter
Morgan Stanley Topped $100 Million on One Trading Day
Daniel Acker/Bloomberg
The firm’s trading division lost money on 10 days during the quarter, compared with five days a year earlier, according to a filing yesterday with the U.S. Securities and Exchange Commission.
The firm’s trading division lost money on 10 days during the quarter, compared with five days a year earlier, according to a filing yesterday with the U.S. Securities and Exchange Commission. Photographer: Daniel Acker/Bloomberg
Morgan Stanley, the sixth-largest U.S. bank by assets, made more than $100 million in trading revenue on one day in the third quarter, the lowest number of days since 2006.
The firm’s trading division lost money on 10 days during the quarter, compared with five days a year earlier, according to a filing yesterday with the U.S. Securities and Exchange Commission. The New York-based firm made more than $100 million in trading revenue on 18 days in last year’s third quarter.
Trading revenue at eight of the biggest Wall Street firms declined an average 12 percent through September from the same period a year earlier, according to a Bloomberg analysis of company filings. Morgan Stanley saw a bigger year-over-year decline in the third quarter than its four biggest U.S. rivals, as trading revenue fell to less than half that of Goldman Sachs Group Inc., Bank of America Corp. and JPMorgan Chase & Co.
“Fixed-income is really the area that underperformed and our view is that the results don’t reflect the true potential of our franchise,” Morgan Stanley Chief Financial Officer Ruth Porat said in an interview last month. “There was no big bet, it’s not that we lost a lot on anything. We didn’t lose a lot, we didn’t make a lot, there just wasn’t much trading there.”
Morgan Stanley had $1.43 billion in total sales and trading revenue for the third quarter, the lowest since the first quarter of 2009. Excluding losses and gains tied to its own credit spreads, Morgan Stanley generated $1.31 billion from trading fixed-income products, down 24 percent from the second quarter.
Morgan Stanley, which has hired about 400 new employees for the sales and trading unit over the past 15 months, suffered from a drop in client activity, Chief Executive Officer James Gorman said last month. Morgan Stanley made money in trading on 54 of the 64 trading days in the third quarter, or 84 percent of the time.
Morgan Stanley’s trading value-at-risk, or VaR, the amount the firm estimates it could lose from trading on any given day, climbed to an average of $142 million for the third quarter. That was up from $137 million for the year-earlier period.
To contact the reporter on this story: Michael J. Moore in New York at mmoore55@bloomberg.net.
To contact the editor responsible for this story: David Scheer at dscheer@bloomberg.net.
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