Morgan Stanley reported earnings that beat analysts’ estimates as equity-trading revenue jumped the most among the biggest Wall Street firms and profitability at the brokerage unit, the world’s biggest, increased.
Morgan Stanley is cutting jobs in its commodities business, one of the Wall Street’s three biggest, after Chief Executive Officer James Gorman said revenue the past two quarters was among the unit’s worst in 18 years.
The Federal Reserve has expanded its scrutiny of banks’ physical commodities operations to encompass businesses run by Goldman Sachs Group Inc. and Morgan Stanley that Congress had previously authorized.
Morgan Stanley has had talks with private-equity firms including Blackstone Group LP as the bank considers options for its commodities trading unit if the Volcker rule outlaws some activities, according to people familiar with the discussions.
Qatar, the Persian Gulf country seeking to reduce its dependence on gas reserves, is weighing a potential stake in Morgan Stanley’s commodities unit, Prime Minister Sheikh Hamad bin Jassim Al Thani said.
Morgan Stanley is in advanced talks to sell part of its commodities business to the Qatar Investment Authority for $1 billion or more, CNBC reported, citing unidentified people familiar with the matter.