Morgan Stanley loses $2.37 billion in Q4
The bank's shares plummeted 74% this year, and the company was forced to raise $19 bn of fresh capital. Big five lose their I | Ghosts of 1929 | Countries in recession
By Agencies |
NEW YORK: Morgan Stanley reported a much wider-than-expected quarterly loss as the credit crisis generated more writedowns and slashed fees from investment banking and brokerage.
The New York-based bank said on Wednesday its loss from continuing operations for the fiscal fourth quarter ended November 30 narrowed to $2.20 billion, or $2.24 a share, from a loss of $3.59 billion, or $3.61 a share, a year earlier.
Analysts' average forecast was a loss of just 33 cents a share, according to Reuters Estimates.
Morgan Stanley shares fell 7.6 percent in premarket trade.
On Tuesday, rival Goldman Sachs sparked a rally in bank stocks and the broader market even as it reported a loss of $2.1 billion. Investors had braced for even worse results.
Morgan Stanley's decision in 2005 to emulate Goldman by taking on more risk, betting more of its capital and financing more leveraged buyouts, backfired last year when a subprime mortgage bet generated a $9.4 billion fourth-quarter loss and forced the bank to sell a $5 billion stake to China.
The bank's shares plummeted 74 percent this year, and the company was forced to raise $19 billion of fresh capital as investors lost confidence in Wall Street's highly leveraged broker-dealers. The shares rallied 18 percent Tuesday on the Goldman results and an interest rate cut by the Federal Reserve.
The loss came during a quarter when the investment banking sector nearly collapsed as Lehman Brothers failed and Merrill Lynch sold itself, leaving only Morgan Stanley and Goldman Sachs as independent firms.
The New York-based bank said on Wednesday its loss from continuing operations for the fiscal fourth quarter ended November 30 narrowed to $2.20 billion, or $2.24 a share, from a loss of $3.59 billion, or $3.61 a share, a year earlier.
Analysts' average forecast was a loss of just 33 cents a share, according to Reuters Estimates.
Morgan Stanley shares fell 7.6 percent in premarket trade.
On Tuesday, rival Goldman Sachs sparked a rally in bank stocks and the broader market even as it reported a loss of $2.1 billion. Investors had braced for even worse results.
Morgan Stanley's decision in 2005 to emulate Goldman by taking on more risk, betting more of its capital and financing more leveraged buyouts, backfired last year when a subprime mortgage bet generated a $9.4 billion fourth-quarter loss and forced the bank to sell a $5 billion stake to China.
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The bank's shares plummeted 74 percent this year, and the company was forced to raise $19 billion of fresh capital as investors lost confidence in Wall Street's highly leveraged broker-dealers. The shares rallied 18 percent Tuesday on the Goldman results and an interest rate cut by the Federal Reserve.
The loss came during a quarter when the investment banking sector nearly collapsed as Lehman Brothers failed and Merrill Lynch sold itself, leaving only Morgan Stanley and Goldman Sachs as independent firms.
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