Wednesday December 17, 02:56 PM
Morgan Stanley posts $2.2bln loss
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NEW YORK (AFP) - US banking giant Morgan Stanley (NYSE: MS - news) , reeling from financial turmoil, posted Wednesday a wider than expected net loss of 2.29 billion dollars in the fiscal fourth quarter to November.
The newly converted bank holding company reported a loss of 2.34 dollars per share compared with a loss of 3.58 million dollars or 3.61 dollars per share in the fourth quarter of 2007.
Analysts had forecast a much more modest loss of 34 cents per share.
Following the result, rating agency Moody's Investors Service downgraded long-term deposit and debt ratings of Morgan Stanley to A2 from A1.
Its shares fell 4.0 percent to 15.48 dollars as trading opened on Wall Street Wednesday.
John Mack, Margan Stanley's chief executive, blamed "unprecedented turmoil" in the global capital markets and the financial services industry in the past few months for the loss and vowed to take aggressive action, including revamping its business operations, to reposition the former investment firm.
"These exceptional market conditions profoundly impacted our performance this year, especially in the fourth quarter," he said in a statement.
The company was "moving aggressively" to reposition for the future by "continuing to resize our business, reduce legacy assets and further strengthen our balance sheet and capital position."
Morgan Stanley and its rival Goldman Sachs (NYSE: GS - news) , which reported a 2.1 billion dollar quarterly loss -- its first as a public company -- on Tuesday, were independent investment banks which became bank holding companies in September in a bid to have easier access to credit to survive the current financial crisis.
Morgan Stanley said net revenues in the reported quarter rose to 1.8 billion dollars compared with a negative 400 million dollars in last year's quarter.
The full fiscal year remained profitable with net income of 1.70 billion dollars compared with 3.2 billion dollars a year ago.
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