MORGAN STANLEY Quarterly Report for Q1 Ended Mar 31, 2009

Summary

Morgan Stanley reported a net loss of $177 million for the first quarter of 2009, a significant downturn from the $1.4 billion profit in the same period of 2008. This loss was driven by a 62% decrease in net revenues to $3.04 billion, largely attributed to a challenging global market and economic environment that continued from 2008. The Institutional Securities segment was particularly impacted, reporting a pre-tax loss of $434 million due to lower sales and trading results in equity and fixed income, compounded by losses from tightening credit spreads on the company's own borrowings. While non-interest expenses decreased by 33% due to lower compensation costs, the firm's overall performance reflects the ongoing pressures of the credit crisis. The company also announced a reduction in its quarterly common stock dividend from $0.27 to $0.05 per share to bolster its capital position.

Key Highlights

• 1Net loss of $177 million for Q1 2009, a substantial decline from a $1.4 billion profit in Q1 2008.
• 2Net revenues decreased by 62% to $3.04 billion in Q1 2009 due to a challenging global market.
• 3Institutional Securities segment reported a pre-tax loss of $434 million, impacted by lower sales and trading results and widening credit spreads on the company's borrowings.
• 4Global Wealth Management Group's income before taxes fell to $119 million from $949 million in the prior year, partly due to the sale of a Spanish subsidiary in the prior year and lower client asset balances.
• 5Asset Management reported a pre-tax loss of $559 million, significantly worsened from a $112 million loss in Q1 2008, driven by substantial investment losses.
• 6Total assets decreased to $626.02 billion as of March 31, 2009, from $676.76 billion as of December 31, 2008.
• 7The company announced a reduction in its quarterly common stock dividend from $0.27 to $0.05 per share to enhance its capital position.

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