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TEXT-S&P: Morgan Stanley ratings unaffected by Q3 results
2012年10月18日 / 晚上6点20分 / 5 年前

TEXT-S&P: Morgan Stanley ratings unaffected by Q3 results

Oct 18 - Standard & Poor's Ratings Services today said that Morgan Stanley's
 (A-/Negative/A-2) fair third-quarter earnings, which are within our
expectations given the current operating conditions, do not immediately affect
our ratings on the company.

Morgan Stanley reported Standard & Poor's-adjusted pretax income of $782 
million, compared with $590 million in the second quarter and $275 million in 
third-quarter 2011.

Investment banking revenue was 12% higher than in third-quarter 2011 because 
of stronger fixed-income underwriting fees. Equity underwriting and advisory 
fees declined, and we expect results in those businesses to be pressured as 
long as the risks of a global crisis keep corporations from expanding. Lower 
market volume also hurt equity trading results, down 8% year over year. 
Fixed-income, currency, and commodity trading results increased 33% over the 
same period, reflecting the improved market conditions. Results suggest 
clients returned to the firm after a weak second quarter. We expect trading 
results to improve once global economic conditions strengthen and investor 
confidence improves.

Wealth management revenues improved modestly, but the pretax margin dropped to 
7% from 11% in third-quarter 2011. The margin reflects one-time costs 
associated with Morgan Stanley's purchase of a larger stake in its wealth 
management joint venture and integration costs. The margin would have improved 
to 13% absent those expenses. We think results in this business remain below 
potential but should improve with the full integration of its joint venture 
over the next few years. 

Morgan Stanley's current projected Basel III Tier 1 common ratio was more than 
9% at the end of the third quarter. We expect the company to return more 
capital to shareholders in 2013, considering its progress toward regulatory 
capital guidelines, subject to regulatory approvals. We expect capital, as 
measured by Standard & Poor's risk-adjusted capital framework, to remain 
neutral to the rating.

The negative rating outlook on Morgan Stanley partially reflects the negative 
outlook on the U.S. sovereign rating. We incorporate two notches of uplift 
into the issuer credit rating on the company to reflect our expectation that 
the U.S. government would provide extraordinary support in a crisis. 
Therefore, if we were to lower the sovereign rating on the U.S., we would also 
lower the issuer credit rating on Morgan Stanley. We will continue to assess 
the potential impact of stress in the eurozone and the associated risks of 
contagion on the company's funding and liquidity, as well as the effect of 
regulatory changes on the franchise.

Standard & Poor's, a part of The McGraw-Hill Companies (NYSE:MHP), is the 
world's foremost provider of credit ratings. With offices in 23 countries, 
Standard & Poor's is an important part of the world's financial infrastructure 
and has played a leading role for 150 years in providing investors with 
information and independent benchmarks for their investment and financial 

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