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Updated January 16th, 2024 at 19:45 IST

Morgan Stanley profit falls on one-time charges

The bank is obligated to pay special assessment fees to the FDIC to replenish a fund.

Reported by: Business Desk
Morgan Stanley
Morgan Stanley | Image:AP Photo
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Morgan Stanley profits fall: Morgan Stanley reported a decline in fourth-quarter profits, impacted by one-time charges related to a special assessment by the Federal Deposit Insurance Corporation (FDIC) and a legal matter. The bank, along with other major banks, is obligated to pay special assessment fees to the FDIC to replenish a fund that faced a nearly $16 billion drain in March 2023 following the collapse of three mid-sized US lenders.

In this quarter, Morgan Stanley paid $286 million in special assessment fees to the FDIC and an additional $249 million as a legal charge. The bank's net income for the quarter ending December 31 was $1.5 billion, or 85 cents per diluted share, compared to $2.2 billion, or $1.26 per diluted share, in the same period the previous year.

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Bank's strategic focus

CEO Ted Pick expressed the bank's strategic focus for 2024, stating, "We begin 2024 with a clear and consistent business strategy and a unified leadership team. We are focused on achieving our long-term financial goals and continuing to deliver for shareholders."

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The reported results align with trends among other major Wall Street banks, which also disclosed lower profits last Friday. The financial landscape for these institutions is clouded by special charges and workforce reductions.

In contrast, rival Goldman Sachs experienced a 51 per cent increase in fourth-quarter profits, attributed to gains from equity traders capitalising on a burgeoning recovery in the markets. The divergent performances highlight the complex challenges and opportunities within the banking sector as institutions navigate regulatory assessments, legal matters, and market dynamics.

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(With Reuters inputs)

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Published January 16th, 2024 at 19:45 IST

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