UPDATE 2-More analysts see Morgan Stanley posting Q2 loss

miércoles 24 de junio de 2009 18:40 CEST

(Recasts, adds details, background, updates share movement)

BANGALORE, June 24 (Reuters) - Citigroup and JMP Securities on Wednesday joined a group of analysts predicting a second-quarter loss at Morgan Stanley (MS.N: Cotización), citing charges from repayment of government funds, but the analysts took comfort about the Wall Street firm's long-term prospects.

On Tuesday, FBR Capital Markets had reversed its second-quarter earnings estimate for Morgan Stanley to a loss.

Citigroup analyst Keith Horowitz expects Morgan Stanley's second-quarter results to be "messy," and said the company's $5 billion of gross commercial real estate equity exposure is a risk.

Morgan Stanley may post a "large loss" in the second quarter, weighed down by charges related to the repayment of government bailout funds, said Horowitz, who also forecast a 2009 loss for the company.

Banks are returning money taken from the $700 billion Troubled Asset Relief Program, which was once intended to spur lending but is now viewed as a sign that recipients are too weak to survive on their own.

JPMorgan Chase & Co (JPM.N: Cotización) said it repaid $25 billion to TARP, while Goldman Sachs Group Inc (GS.N: Cotización) and Morgan Stanley said they repaid $10 billion each.

In connection with the early repayment and associated dividends, several banks are taking second-quarter charges.

Goldman Sachs said it paid a dividend of $425 million, which will reduce second-quarter earnings by about 77 cents a share, while Morgan Stanley said it expects a $892 million charge in the second quarter related to the early repayment.   Continuación...