James Gorman, Morgan Stanley’s Chief Executive said the company’s earnings targets would take “longer to achieve” as the coronavirus crisis continues. The bank reported on Thursday, April 16, 2020, that its profit fall plunges by almost 30%.
Morgan Stanely is an American multinational investment bank and financial services company. In January, Gorman raised the bank’s performance targets and set new goals for cost-cutting, return on equity and wealth management profit for the next few years.
The bank has seen a good, well-balanced performance last year, not until the coronavirus spread around the globe. In the following weeks, the pandemic forced extensive lockdowns, shutting businesses, millions of people became jobless and brought a fear of stagnation.
“As long as the duration and scale of the pandemic and economic slowdown remain uncertain, I expect markets will continue to be fragile. The resulting stress on the global economy is real and will take time to recover,” said Gorman.
Morgan Stanley reported a net income of $1.7 billion in the first quarter, lower than last year’s same period which was $2.4 billion. The reported profit was below-target return on tangible common equity (ROTCE) and Gorman forewarned that the bank will not meet them in the next quarter.
“It would be irresponsible of me to recommit to those targets on this call. Those targets are not achievable in the second quarter, they weren’t achievable in the first quarter,” said Gorman.
“Over the past two months, we have witnessed more market volatility, uncertainty and anxiety as a result of the devastating Covid-19 [outbreak] than at any time since the financial crisis,” Gorman added.
Gorman was also reported to be one of the recovered patients of the novel coronavirus.