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.
Morgan Stanley agreed to sell a unit that stores, trades and transports oil products to a subsidiary of Russia’s OAO Rosneft as the investment bank backs away from owning some physical commodities businesses.
Morgan Stanley reported profit that beat analysts’ estimates as a surprise jump in fixed-income results helped the firm post the only increase in trading revenue among the six biggest U.S. banks this year. The stock rose 3 percent in early New York trading.
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 appointed Nancy King as head of its oil-liquids operations and made several senior appointments after the bank agreed to sell its global oil merchanting business to an OAO Rosneft subsidiary.
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.