Morgan Stanley profit shrinks as deal slump lingers

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Morgan Stanley profit shrinks as deal slump lingers
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Profit for the three months ended Sept. 30 was $2.4 billion, the bank reported on Wednesday. That compares with the $2.6 billion recorded a year earlier.

Morgan Stanley's profit fell about 9% in the third quarter, dragged down by lethargic dealmaking that sent the lender's shares down nearly 3% in premarket trading. Profit for the three months ended Sept. 30 was $2.4 billion, or $1.38 per diluted share, the bank reported on Wednesday. That compares with $2.6 billion, or $1.47 per diluted share, a year earlier. Morgan Stanley's total revenue from investment banking fell 27% to $938 million in the quarter.

While the market environment remained mixed this quarter, the firm delivered solid results," CEO James Gorman said in a statement. "Our equity and fixed income businesses navigated markets well, and both wealth and investment Management produced higher revenues." Global mergers and acquisitions activity showed few signs of improvement in the third quarter after almost two years in the doldrums.

Rising interest rates, antitrust scrutiny and an uncertain economic and geopolitical outlook have diminished companies' appetite to strike deals. Industrywide global investment banking fees fell almost 17% in the third quarter from the same period a year earlier, to $15.2 billion, according to data from Dealogic. Markets could be further shaken by surging U.S. Treasury yields that have knocked investor confidence.

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