Morgan Stanley Investment Corporation increased revenues
Fitch Ratings upgraded the outlook for Morgan Stanley Financial Corporation. The bank’s rating rose from stable to positive and remained at an “A” level.
The positive outlook indicates that Morgan Stanley is regularly improving its structure and approach to doing business. Due to this, the cooperation with the bank is convenient for the clients, and the level of services rendered steadily improves.
The company has demonstrated stable development even in difficult conditions of the pandemic. Moreover, Morgan Stanley adheres to a stable capital position and a proven diversification strategy.
According to representatives of the Fitch agency, one of the key factors for the rating upgrade was the stability of operating indicators, which for several quarters have been kept on steadily high positions. Morgan Stanley treats thoroughly to revealing and analysis of risk positions, accurately tracking changes in the market. Thus, the bank manages to avoid serious impacts and fluctuations, which are observed in the sector of institutional securities.
The upgrade was not affected by the difficulties the corporation experienced last year. Then Archegos fund failed to cope with liabilities, as required by margin rules, as a result of which Morgan Stanley lost more than 900 million dollars.
Several brokers from Archegos, among them Morgan Stanley, arranged the sale of shares of the companies, their total amount was 30 billion dollars. The financiers took this step after the fund defaulted on margin calls. Before that, Archegos had accumulated large positions in various companies, which were formed thanks to borrowed funds.
In addition to Morgan Stanley’s own losses, the fund’s collapse also caused losses at other financial institutions, with analysts citing $10 billion in losses.
Quarterly losses totaled $644 million, according to reports from the investment bank. They were per client and its credit obligations. The remaining $267 million was split among other trading losses. That prime broker turned out to be the Archegos fund. However, despite the losses, the bank was able to increase its net income, which reached record levels.
Morgan Stanley Financial Corporation is the second-largest in the United States. The bank is the leader among brokerage businesses in the world, its main activity is mergers and acquisitions. In addition, Morgan Stanley is engaged in stock and bond trading on stock exchanges, asset management.
Morgan Stanley created a computer system in 1964 that analyzed the situation in financial markets. The model has gone through many transformations and improvements and is successfully used to this day.