Morgan Stanley has reported a net loss of $177m, or $0.57 per diluted share, for the first quarter ended March 31, 2009, compared to a net income of $1.41 billion, or $1.26 per diluted share, in the corresponding quarter of 2008.
Net revenues for the first quarter of 2009 were $3 billion, a decrease of 62% over the first quarter of 2008. Non-interest expenses of $3.9 billion decreased 33% from the first quarter of 2008.
The company has said that the first quarter results were negatively impacted by the $1.5 billion decrease in net revenues related to the tightening of Morgan Stanley’s credit spreads on certain of its long-term debt and net losses of $1 billion on investments in real estate, amidst the industry-wide decline in this market.
In the first quarter of 2009, investment banking delivered net revenues of $0.8 billion, fixed income sales and trading delivered net revenues of $1.3 billion and equity sales and trading delivered net revenues of $0.9 billion.
Institutional securities business of the company has posted a pre-tax loss of $434m in the first quarter of 2009, compared with a pre-tax income of $1.18 billion in the first quarter of 2008.
Global wealth management group has posted a pre-tax income of $119m in the first quarter of 2009, compared with a pre-tax income of $949m in the first quarter of 2008. Asset management business has posted a pre-tax loss of $559m, compared with a pre-tax loss of $112m in first quarter of 2008.
John Mack, chairman and CEO of Morgan Stanley, said: While challenging markets continued to impact our results this quarter, we saw improved performance across most of our businesses during the past three months. The firm delivered strong results in investment banking, commodities, interest rates and credit products as well as solid performance in global wealth management. In fact, Morgan Stanley would have been profitable this quarter if not for the dramatic improvement in our credit spreads — which is a significant positive development, but had a near-term negative impact on our revenues.
In this volatile environment, we have focused on prudent stewardship of our balance sheet, capital and risk profiles, as evidenced by our exceptional capital ratios. We have also moved quickly to realize attractive new opportunities including the creation of a new industry leader in wealth management with the Morgan Stanley Smith Barney joint venture as well as our new securities joint venture with MUFG.
