Morgan Stanley returns to profit

US financial firm reports third-quarter net profit of $498m, bettering expectations.

    Morgan Stanley is one of a handful of major US financial companies to return to profit [AFP]

    Stock and debt underwriting from investment banking, as well as rising profits from its retail brokerage business, helped balance out $400m in commercial real estate losses, the company reported.

    Return to profit

    The third-quarter results mark a return to profitability for Morgan Stanley after it lost a total of $13.18bn in the previous three quarters combined.

    The company joins rivals such as Goldman Sachs in making a profit after the US financial sector nearly collapsed about a year ago and prompted a multi-billion dollar government bail-out plan of ailing financial firms.

    The latest report by Morgan Stanley was better than analysts had expected. An average of predictions by analysts surveyed by Thomson Reuters suggested that the company would announce only a 27 cents-a-share increase in their third-quarter report.

    Morgan Stanley also put about $5bn in the third quarter for year-end bonuses, increasing its compensation pool to $10.9bn.

    The bonus pool is likely to be criticised by US citizens angry at the scale of payments to the staff of banks which received billions of dollars of taxpayers' money to prop up their operations at the height of the financial crisis last year.

    Morgan Stanley received about $10bn in taxpayers' money as part of the US government bail-out plan, although it later repaid the funds to the US treasury.

    SOURCE: Agencies


    YOU MIGHT ALSO LIKE

    Lost childhoods: Nigeria's fear of 'witchcraft' ruins young lives

    Lost childhoods: Nigeria's fear of 'witchcraft' ruins young lives

    Many Pentecostal churches in the Niger Delta offer to deliver people from witchcraft and possession - albeit for a fee.

    The priceless racism of the Duke of Edinburgh

    The priceless racism of the Duke of Edinburgh

    Prince Philip has done the world an extraordinary service by exposing the racist hypocrisy of "Western civilisation".

    Why a hipster, vegan, green tech economy is not sustainable

    Why a hipster, vegan, green tech economy is not sustainable

    Improving eco-efficiency within a capitalist growth-oriented system will not save the environment.