BusinessCompany NewsMorgan Stanley suffers $940m sub-prime hit

Morgan Stanley suffers $940m sub-prime hit

Second bank to reveal Q3 numbers takes an almost $1bn hit from write-downs

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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
assets.

Tomorrow the other giant investment banks Goldman Sachs and Bear Stearns
release their Q3 numbers.

Further reading:

Read
Morgan Stanley’s full results

US bank takes $700m credit crunch write
down

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