Morgan Stanley suffers $940m sub-prime hit
Second bank to reveal Q3 numbers takes an almost $1bn hit from write-downs
Morgan Stanley has been forced to book a $940m (£470m) hit to revenues in its
accounts after revealing its exposure to sub-prime debt securitisations in third
quarter numbers revealed today.
Reporting a 7% fall in total revenues for Q3 from $1.5bn in Q2 to $1.4bn, the
US investment bank said: ‘…trading included losses of approximately $940m due to
the marking to market of loans as well as closed and pipeline commitments. The
markdowns reflect the illiquidity created by current market conditions.’
Morgan Stanley’s write-down disclosures follow Q3 numbers released by Lehman
Brothers yesterday, which showed that Lehman had taken a $700m hit on sub-prime
Tomorrow the other giant investment banks Goldman Sachs and Bear Stearns
release their Q3 numbers.