19 July 2012 Last updated at 10:16 ET

Morgan Stanley bank sees revenues fall sharply

Morgan Stanley's chief executive said investors remain cautious

Morgan Stanley's revenues in the three months to the end of June fell sharply, dragged down by weak results from its investment banking division.

Shares in the bank fell more than 3% in early trading as it reported a 24% fall in revenues to $6.95bn (£4.4bn), with a 37% fall from investment banking.

Profits of $563m compared with a $558m loss last year which was caused by a one-off $1.7bn charge.

Chief executive James Gorman said investors remained cautious.

The figures were worse than analysts had forecast, but echo investment banking revenue declines reported by Wall Street peers Citigroup, JP Morgan and Bank of America.

Mr Gorman has been cutting costs and trying to reduce the firm's dependence on investment banking, which has been hit hard as financial activity tailed off during the global recession.

Morgan Stanley was last month downgraded two notches from A2 to Baa1 by ratings agency Moody's.

Mr Gorman said in a statement that the second quarter was "marked by investor caution" and that "global economic activity remains a headwind".