Morgan Stanley Quarterly Profit Falls 10%

Morgan Stanley was the last of the big U.S. banks to report earnings in a tough quarter for high finance.


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johannes eisele/Agence France-Presse/Getty Images

Quarterly profit fell 10% at

Morgan Stanley
,


MS -1.49%

the last of the big U.S. banks to report earnings in a mixed quarter where trading slowed and Main Street banks carried the day.

The bank reported a profit of $2.2 billion, or $1.23 a share, on $10.24 billion in revenue, both down from a year ago, when it earned $2.4 billion on $10.6 billion in revenue. Analysts polled by FactSet had expected a profit of $1.9 billion, or $1.13 a share, on $10 billion in revenue.

Morgan Stanley, the smallest of the major American banks, is the last to report earnings in a tough quarter for high finance. Global trade tensions quieted securities trading and a decline in longer-term interest rates, spurred by the Federal Reserve’s recent shift to possibly lower rates, caused some corporate borrowers to pull back.

Instead, consumer businesses drove higher profits at

JPMorgan Chase


JPM -0.98%

& Co.,

Citigroup
Inc.,

Wells Fargo & Co. and Bank of America Corp. Morgan Stanley has one of the world’s largest retail brokerages but lacks the big mortgage and credit-card operations that helped rivals in the quarter.

The bank’s return on equity, a measure of profitability, was 11.2% in the quarter. Other banks ranged from 10% at Citigroup to 16% at JPMorgan.

Chief Executive James Gorman has steered Morgan Stanley into steadier businesses since the financial crisis, doubling down on wealth and asset management and cutting back on riskier kinds of trading. Earlier this year Morgan Stanley bought a software firm that helps corporate employees manage their finances, and plans to build out Morgan Stanley’s retirement-account offerings.

More on Banks’ Earnings

Write to Liz Hoffman at liz.hoffman@wsj.com and Peter Rudegeair at Peter.Rudegeair@wsj.com

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