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Morgan Stanley's Q1 Loss Real Estate Related

NEW YORK CITY-Billion-dollar drops in the bank holding company's real estate investments helped drive a $177-million net loss for the quarter.

By Paul Bubny | Updated on April 22, 2009

NEW YORK CITY-Losses on real estate investments weighed heavily on Morgan Stanley’s Q1 performance, as the bank holding company reported a net loss of $177 million. The $1-billion loss from real estate “had a sizeable impact on our results,” Colm Kelleher, EVP and CFO, said in an investors conference call Wednesday.

According to financial results released Wednesday, the losses on investments in real estate included $500 million in the institutional securities sphere and negative revenues of $300 million on the asset management side, along with non-compensation expenses of $200 million. Net revenues were also hurt to the tune of $1.5 billion by tightening credit spreads on fixed income sales and trading and equity sales, Morgan Stanley reported.

The $177-million net loss contrasted with a $1.4 billion net income for Q1 2008. Net revenues were $3 billion, down 62% year over year.

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