Morgan Stanley scales back mortgage business

| February 14, 2008 | 0 Comments

Morgan Stanley, one of the world’s largest investment banks, has announced it is to scale back its mortgage lending business, which will result in 1,000 job losses.

As part of the review, the bank is to close its UK residential mortgage arm and will reduce its lending business in the US.

Anthony Meola, chief operating officer of the US residential business at Morgan Stanley, said given the continued dislocation in the mortgage markets, we have restructured our residential mortgage business to ensure we are appropriately positioned for the environment going forward.

Last December, the bank reported a write-down of $9.4 billion for the 3 months to end of November because of losses from investments linked to the US sub-prime mortgage market.

Over the last 6 months, more than 25,000 jobs have been trimmed in financial institutions globally as a result of the housing crisis and deteriorating credit conditions.

Last weekend, finance ministers from the G7 group of industrialised nations said losses from the US sub-prime mortgage collapse could reach $400 billion.

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