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Morgan Stanley to Close Banking Operations in Russia in 1Q20

Zacks Equity Research

In order to avoid certain complications in relation to accessing international capital markets, Morgan Stanley MS is thinking of shutting the Russian banking business. The bank’s Russian unit said in its annual report that it will send a formal notice to the central bank in Russia, stating the closure of its Russian banking operations in first-quarter 2020.

Per Reuters, Morgan Stanley’s Russia subsidiary stated in the report that because of sanctions imposed by the United States and the European Union since 2014, it was getting difficult for its businesses in Russia to access international capital markets.

Notably, the report stated, “Impact of changes in the economy on the future results of the bank's business and its financial condition may turn out to be significant.”

However, this Wall Street giant is expected to continue a consulting business in Russia, which would not involve getting a license.

Notably, Morgan Stanley has been focusing to strengthen domestic corporate banking unit, which led to steady rise in consolidated loans and lending commitments. In fact, these efforts along with higher interest rates resulted in an increase in the company’s net interest income over the last few years.

Moreover, it has undertaken several initiatives over the past few years to restructure operations, with a goal to lower balance-sheet risks and focus on Wealth Management and Investment Management segments as these are less dependent on capital markets.

Shares of Morgan Stanley have gained 2.7% over the past six months against 5.3% decline recorded by the industry it belongs to.


Currently, the company carries a Zacks Rank #3 (Hold).

Stocks to Consider

A few better-ranked stocks from the finance space are Artisan Partners Asset Management Inc. APAM, Franklin Resources, Inc. BEN and Cohen & Steers, Inc. CNS. All these stocks currently sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Artisan Partners’ earnings estimates for 2019 have been revised 8.4% upward over the past 30 days. Also, its share price has increased 2.5% over the past six months.

The Zacks Consensus Estimate for earnings of Franklin Resources has increased 6.7% for the current-fiscal year over the past 30 days. The company’s shares have gained 8.9% over the past six months.

Cohen & Steers’ earnings estimates have been revised 6.9% upward for 2019, over the past 30 days. Also, its share price has increased 28.2% over the past six months.

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