Morgan Stanley 61% Income Plunge; Fifth Third Bancorp Panhandling
Morgan Stanley, #2 US investment firm,
reported Q2 Yoy net income -61%; revenue -38%; fixed income revenue -85%, shares only down 30% this year.
The firm suffered writedowns on bonds backed by real estate and leveraged loans and traders made bad bets with the company's money.
Morgans gross leverage, or reliance on debt, to 25.1 times.
As reported here yesterday, Goldman Sachs analysts said U.S. banks could need another $65 billion as losses and writedowns extend into Q1 2009, today...
Regional bank Fifth Third Bancorp raising $1 billion in fresh capital, selling $1 billion in assets, and cutting dividend by 66% to shore up the balance sheet.
Stock down 20% on the news, now down 70% in the last year. Nonperforming assets in Q2 will be 40 to 45% higher than Q1.
The cost of uncollectible loans in 2009 will be higher than this year, and the bank will need to hold more money in reserve.
Fitch Ratings downgraded Fifth Third one level, saying the move "reflected deteriorating trends in asset quality,
expectations for elevated levels of problem assets in the near term and a decline in profitability."
Fitch said the new capital will provide a "needed cushion" for the lender.
Fifth Third is following National City Corp. and KeyCorp.
National City, Florida's largest bank, raised $7 billion after its strategy of buying banks in Florida at the peak of the real estate boom backfired.
KeyCorp said earlier this month it was selling $1.65 billion in convertible and common stock after losing a leasing tax case.
The bank said it expected a Q2 charge of $1.1 to $1.2 billion and increased its provision for loan losses that quarter by $600 million.
reported Q2 Yoy net income -61%; revenue -38%; fixed income revenue -85%, shares only down 30% this year.
The firm suffered writedowns on bonds backed by real estate and leveraged loans and traders made bad bets with the company's money.
Morgans gross leverage, or reliance on debt, to 25.1 times.
As reported here yesterday, Goldman Sachs analysts said U.S. banks could need another $65 billion as losses and writedowns extend into Q1 2009, today...
Regional bank Fifth Third Bancorp raising $1 billion in fresh capital, selling $1 billion in assets, and cutting dividend by 66% to shore up the balance sheet.
Stock down 20% on the news, now down 70% in the last year. Nonperforming assets in Q2 will be 40 to 45% higher than Q1.
The cost of uncollectible loans in 2009 will be higher than this year, and the bank will need to hold more money in reserve.
Fitch Ratings downgraded Fifth Third one level, saying the move "reflected deteriorating trends in asset quality,
expectations for elevated levels of problem assets in the near term and a decline in profitability."
Fitch said the new capital will provide a "needed cushion" for the lender.
Fifth Third is following National City Corp. and KeyCorp.
National City, Florida's largest bank, raised $7 billion after its strategy of buying banks in Florida at the peak of the real estate boom backfired.
KeyCorp said earlier this month it was selling $1.65 billion in convertible and common stock after losing a leasing tax case.
The bank said it expected a Q2 charge of $1.1 to $1.2 billion and increased its provision for loan losses that quarter by $600 million.
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