Morgan Stanley has reported a 30% slump in its Q1 2020 profit as the market turbulence triggered by the Covid-19 pandemic wreaked havoc on the firm.
The group’s net income fell to $1.7bn from $2.43bn, while net revenues declined to $9.49bn from $10.28bn.
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The firm’s Wealth Management unit, which accounts for around half of the group’s total revenue, reported an 8% decrease in net revenues to $4.04bn from $4.39bn.
Transactional revenues dropped to $399m from $817m, due to investment losses related to employee deferred cash-based compensation plans.
On the bright side, asset management revenues increased to $2.68bn from $2.36b. The firm attributed the growth to fee-based asset flows and higher asset levels.
Pre-tax income at the division dropped 11% year-on-year to $1.1bn, while pre-tax margin stood at 26.1%.
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By GlobalDataThe Investment Management arm posted net revenues of $692m in Q1 2020, down 14% from $804m in the prior year.
Higher AUM levels led to a growth in asset management revenues to $665m from $617m.
The unit’s pre-tax income decreased 18% to $143m from $174m over the period.
Similar to rivals, the trading division softened the blow for Morgan Stanley in Q1 2020, with sales and trading net revenues jumping 30%.
Strong performance in the Americas and Asia increased equity sales and trading net revenues.
Fixed Income sales and trading net revenues soared 29%, driven by performance across rates, foreign exchange and commodities.
Morgan Stanley chairman and CEO James Gorman said: “Over the past two months, we have witnessed more market volatility, uncertainty and anxiety as a result of the devastating COVID-19 than at any time since the financial crisis.
“While it’s too early to predict how this will unfold, Morgan Stanley navigated the quarter well given the conditions, and our results bear testament to the strength of our balanced business model.”
