Morgan Stanley Posts Nearly $1 Billion of Archegos-Linked Loss
Morgan Stanley unveiled nearly $1 billion of losses related to the collapse of family office Archegos as part of the announcement of its quarterly results which beat analyst expectations.
Morgan Stanley lost nearly $1 billion from the collapse of Archegos, according to chief executive James Gorman on a call with analysts.
Overall, the bank registered $3.98 billion of profits in the first quarter of 2021, a 150 percent year-on-year increase.
Archegos Loss Breakdown
According to Gorman, the American bank lost $644 million by selling stocks it held that were related to Archegos positions and another $267 million from de-risking attempts.
«I regard that decision as necessary and money well spent,» he said, adding that the losses were not immediately disclosed because they were deemed as immaterial.
Morgan Stanley reportedly offloaded $5 billion of Archegos-linked shares in late March before the meltdown unraveled, dodging $10 billion of potential losses.
Damages Unveiled
Morgan Stanley’s $911 million loss combined with other reported Archegos-linked damages at Credit Suisse ($4.7 billion), Nomura ($2 billion) and Mitsubishi UFJ (up to $300 million) have brought the publicly admitted sum to over $7.9 billion.
A recent J.P. Morgan report estimates that losses related to the collapse of Bill Hwang’s family office could total as high as $10 billion.
