In Q3 2023, Morgan Stanley (MS) earnings fell 9% YoY to $13.3 billion as a result of investment banking and trading revenue declines – another sign that the financial sector is still struggling to recover from the ongoing downturn after the serial collapses of SVB, First Republic and the likes. MS’s investment banking revenue fell 27% YoY, ranking last among major banks with large Wall Street operations. Morgan Stanley's revenue from stock and bond trading also fell 4%. However, profits at both its wealth and investment management divisions rose YoY, but fell short of analysts' expectations.

In the company’s reporting period, it earned $1.38, beating the underwhelming consensus by $0.09 and compared with last year’s $1.47 result. The softness occurred primarily due to an increase in provisions for credit/loan losses of $134 million, up $99 million YoY, which is viewed as a sign of structural instability.

Investors expressed disappointment, with the company's shares down about 8% for the week. On the reporting day, the single-day dive put the stock on track for its biggest one-day drop in more than three years. Morgan Stanley now looks as a moderate laggard among the peer big banks. The MS’s profit drop was smaller than a 33% drop at rival Goldman Sachs (GS) but smaller than profit increases reported by JPMorgan Chase (JPM), Bank of America (BAC), Wells Fargo (WFC) and Citigroup (C).