(Reuters) -Morgan Stanley on Thursday reported a drop in second-quarter profit, as dealmaking slumped amid soaring market volatility and dented the firm’s investment banking unit.
The bank reported a profit of $2.4 billion, or $1.39 per share, for the quarter ended June 30, compared with $3.4 billion, or $1.85 per share, a year earlier.
Analysts on average had expected a profit of $1.53 per share, according to data from Refinitiv.
It was not immediately clear if the reported numbers were comparable with estimates.
Runaway inflation and rising borrowing costs to stamp it out have rattled global financial markets, forcing corporates to curb their appetite for merger deals, while also slowing their efforts to raise cash through stock or debt offerings.
The turmoil has, in turn, upended a lucrative revenue stream for investment banks, whose results are also facing tough year-earlier comparisons when accommodative monetary policies led to record levels of deals. Net revenue fell 11% to $13.1 billion for the quarter.
Shares were down 1.3% in premarket trading.
(Reporting by Niket Nishant in Bengaluru and Saeed Azhar in New York; Editing by Anil D’Silva)