Morgan Stanley Rises After Narrower than Expected Loss

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Morgan Stanley (MS) shares jumped 5.7% in early trading after the bank posted a smaller than expected fourth quarter loss.

The bank lost 15 cents per share, against expectations for a 57-cent loss.

The quarter was set up to be a big mess for Morgan Stanley, as the bank had to account for a large settlement with MBIA (MBI), and investment banking and trading revenues were widely anticipated to be weak. Morgan Stanley is more dependent on capital markets earnings than peers like JPMorgan Chase (JPM), which offers much broader services in retail banking and other areas. All that came to fruition, but the bank also provided enough positive news to put investors in a more optimistic mindset.

The bank’s institutional securities unit, which includes investment banking, saw revenue fall 42% year over year and posted a $779 million loss. The MBIA settlement resulted in a $1.7 billion charge. But the bank’ global wealth management group, which is its second largest division, saw just a slight fall-off in revenue. “Global fee based asset flows increased 30% from a year ago to $42.5 billion and net new assets increased 56% from a year ago to $35.8 billion,” the company said in a statement.



Original Article Source by Barrons.com