Morgan Stanley became the latest victims of the sub-prime credit crunch, after reporting a 17 percent drop in its profits for the last quarter. The Wall Street investment bank saw income fall from $1.85 billion to $1.54 billion in the last three months of August.
The bank had experienced “Severe market disruption on some areas of the firm, including our credit products, leveraged lending and quantitative strategies businesses,” according to John Mack, chairman and chief executive of the bank, in an interview with City AM.
Earnings per share of $1.38 were below the $1.55 that the bank had forecast but revenue in the investment bank division was up 45 percent to $1.4 billion.