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Morgan Stanley profit falls on compensation costs, tax provision
[NEW YORK] Morgan Stanley reported an 8.5 per cent fall in quarterly profit, hurt by a rise in compensation costs and as the sixth-largest US bank by assets set aside more money to cover taxes.
Morgan Stanley, the last big US bank to report second-quarter earnings, said its net income from continuing operations applicable to the company fell to US$1.67 billion, or 85 cents per share, from US$1.82 billion, or 92 cents per share, a year earlier.
The bank's profit in the year-earlier quarter was boosted by a one-time tax benefit of US$609 million.
Analysts on average had expected earnings of 74 cents per share, according to Thomson Reuters. It was not immediately clear if the reported figures were comparable.
Consolidated net revenue rose 13 per cent to US$9.74 billion, with wealth management revenue increasing 4.7 per cent to US$3.88 billion.
Morgan Stanley is focusing on stable businesses such as wealth management and backing away from volatile businesses such as bond trading as a way to free up capital and comply with stricter regulations.