Morgan Stanley reports 11% decline in profits in March quarter due to deal-making, mortgages slowdown

Morgan Stanley, the investment banking powerhouse, reported a profit drop of 11% from the last year’s profit. This smaller-than-expected profit drop is a reflection of declining corporate deal-making and a deceitful bounce for current markets.

As per the Morgan Stanley quarter result report on Thursday, the bank made a profit of $3.7 billion, or $2.04 a share. The revenue of the first quarter fell 6% to $14.8 billion.

Not only Morgan Stanley, all four big banks, including Citigroup, Goldman Sachs, and Wells Fargo, reported noticeable profit drops because of the volatile markets and the war crisis in Ukraine. In such a slowdown situation, it’s obvious that fewer people sought mortgages in real estate investment.


Morgan Stanley's quarterly result also showed a fall of 37% in fees from brokering mergers and fundraisings as corporate chiefs stayed back from the volatile market situation. Moreover, JPMorgan Chase & CO. reported a 31% decline in investment-banking revenue.

As per the data of Refinitiv, Morgan Stanley's profit from equity underwriting deal volumes cut down 80% for this first quarter, which has also been reflected for Goldman Sachs, another prominent dominant financial adviser on global IPOs.

The report clearly shows that the war situation in Ukraine has kept people in fear of food and energy shortage, whereas stocks and bonds have been sold off. Morgan Stanley also noted a steep fall in fixed income underwriting revenue, which was affected by lesser bond issuances.

While Morgan Stanley is the major player in the trading and deal-making in the Wall Street markets, its share rose 1.6% in the premarket transaction on Thursday.

Wells Fargo, owning a smaller investment bank, was even more impacted by the housing market slowdown. Well’s revenues from mortgage initiations fell 33% from a year earlier.