Morgan Stanley falls short of Q2 profit and revenue expectations

Morgan Stanley reported earnings of $1.39 per share, short of expectations of $1.53 per share, as profits slumped 29% year-on-year to $2.5bn.

The New York-based group also reported an 11% fall in revenues to $13.13bn, driven by a sharp 55% drop in investment banking revenues.

However, chief executive James Gorman said: "Overall, the firm delivered a solid quarter in what was a more volatile market environment than we have seen for some time."

Gorman added that good trading results had helped to "partially counter weaker investment banking activity."

As of 1300 BST, Morgan Stanley shares were down 0.64% in pre-market trading at $74.50 each.

Reporting by Iain Gilbert at Sharecast.com