Friday, October 18, 2013

Reuters: Regulatory News: Morgan Stanley trims Q3 commodity trading risk

Posted by Ava on 7:13 AM

Reuters: Regulatory News
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Morgan Stanley trims Q3 commodity trading risk
Oct 18th 2013, 12:47

Fri Oct 18, 2013 8:47am EDT

  Oct 18 (Reuters) - Morgan Stanley trimmed its commodity trading risk  in the third quarter from the previous quarter, the bank reported on Friday, but  held its position as the Wall Street firm with the most money at play in the  sector.      Value-at-Risk (VaR) in commodities stood at $20 million in the third  quarter, down from $24 million in the second quarter and unchanged from the  third quarter of 2012. That compares with $17 million for Goldman Sachs   and $13 million for JPMorgan Chase & Co.      Morgan Stanley, typical of Wall Street banks, groups its commodities trading  revenue under the fixed income, currency and commodities (FICC) category in its  quarterly earnings and does not break down the sector individually, often  leaving VaR as one of its key risk-reward indicators for commodities.      The bank's FICC revenues were down sharply, however, falling 44 percent to  $835 million.      Goldman Sachs on Thursday said it had "significantly lower" revenues from  commodities in the third quarter, and trimmed its VaR in the sector to $17  million from $19 million in the previous three months. JPMorgan held its VaR  unchanged at $13 million in the third quarter.        Morgan Stanley's overall third-quarter revenue jumped 50 percent, helping  adjusted earnings beat expectations, as higher income from equities sales and  trading made up for a drop in the Wall Street bank and brokerage's fixed-income  business.                                           ------2013------    ------2012-------   --2011--                                Q3     Q2     Q1    Q4   Q3   Q2   Q1   Q4    Q3            * JPMorgan            13    13     15    14   13    13   21   20   15        * Goldman Sachs        17    19     21    20   22    20   26   26   25        * Morgan Stanley       20    24     20    22   22    27   27   28   32        * Bank of America    n/a    14     15    15  12.5 11.9  13.1 12.1  15.7   ** Citigroup      C.N        n/a    12     34    13   15   18   14   18    21          Note: Bank of America and Citigroup report VaR data separately in later 10-Q  filings with the Securities & Exchange Commission.
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