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Morgan Stanley posts third straight loss

MORGAN Stanley reported its third consecutive quarterly loss yesterday, saddled with a charge related to repaying government loans and the accounting impact of improvement in its debt prices.

The results came in sharp contrast to rival Goldman Sachs Group Inc which reported strong profits last week. Morgan Stanley shares were down 4.7 percent in premarket trading.

Morgan Stanley swung to a loss applicable to common shareholders of US$1.26 billion, or US$1.10 per share, in the second quarter, compared with a profit of US$1.1 billion, or US$1.02 a share, a year earlier. Net revenue fell 11 percent to US$5.4 billion.

Chief Financial Officer Colm Kelleher said the company was not satisfied with its performance in fixed income and asset management.

During the quarter, the New York-based bank repaid US$10 billion from the government's Troubled Asset Relief Program, incurring a one-time charge of US$850 million. The improvement in its debt prices reduced net revenue by US$2.3 billion.

Despite the second-quarter loss, Morgan Stanley set aside US$3.9 billion for compensation expenses, up from US$3.1 billion a year earlier.


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