Monday, Financial services firm Morgan Stanley (MS) has hired a former Merrill Lynch executive, David Moffitt to prepare the firm's capital markets division for a resurgence in securitized debt sales, according to media reports.
Citing an internal memo, reports said, Moffitt is to start in New York as head of global credit solutions and will report to Raj Dhanda and John Hyman, co-heads of global capital markets. Moffitt will coordinate his efforts with J.D. Pearce, 41, who will run the sales and trading part of the business, reporting to Steve D'Antonio.
"Within our capital markets business this is one of the big growth areas," Dhanda, 41, reportedly said in an interview. "Nobody expects underwriting to double, but securitization or structured solutions business can double, or triple."
For the third quarter of fiscal 2009, Morgan Stanley reported lower profit as revenues plunged 52%, reflecting mainly weakness in its Institutional Securities business.
Net income applicable to the company was $757 million or $0.38 per share, down from $8.15 billion or $7.38 per share in the same quarter last year. The continued improvement in debt-related credit spreads reduced the bank's earnings per share by $0.36.
On the basis of the company's business segments, Institutional Securities net revenues plunged 69% to $4.97 billion, from $16.04 billion a year ago. Advisory revenues were $279 million, down 44% from last year's third quarter, reflecting lower levels of market activity. Underwriting revenues surged 74% year-over-year to $760 million on higher levels of market activity.
Global Wealth Management generated quarterly revenues of $3.03 billion, up 91% from $1.58 billion in the prior-year quarter. Asset Management revenues increased to $698 million from $449 million last year.
Moffitt is joining Morgan Stanley after consulting for about a year at MatlinPatterson Global Advisers, a buyout firm led by Mark Patterson, a former distressed-debt specialist at Credit Suisse. He previously oversaw structured-product sales in the fixed-income division of Merrill Lynch, which was sold to Bank of America Corp. after suffering losses on structured debt investments.
MS rose $0.52 or 1.62% and closed Monday's regular trading session at $32.62. After hours, MS declined $0.01 or 0.03% and traded at $32.61.
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