Morgan Stanley announces Q4 loss of $2.2bn

| December 17, 2008 | 0 Comments

US investment bank Morgan Stanley has announced a loss of $2.19 billion (£1.41 billion) for the three months ended November 30.

The news follows that from Goldman Sachs who yesterday reported its first loss since it floated almost a decade ago.

Goldman said that losses during the three months to the end of November hit $2.12 billion (£1.41 billion). However, the loss was still less than the market expected and shares gained 4%.

However, Morgan Stanley’s results were worse than the markets had expected as it has been forced to write off investments and cut its fees from investment banking and broking.

Following the news shares in the bank fell 7%, while shares in the bank have plummeted over 70% since the start of the year.

Investors have lost confidence in banks after a difficult year for financial institutions, particularly in the US. Job losses have been in their thousands while Citigroup, Bear Stearns, Fannie Mae, Freddie Mac and insurance giant, AIG have been bailed out by the US Government.

The Government also pumped billions of dollars into the financial system, while back in September, one of Goldman’s rivals, Lehman Brothers, went bankrupt.

In September, Morgan Stanley, along with Goldman Sachs, changed status and received regulatory approval to convert themselves into traditional bank holding companies.

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