Morgan Stanley profit drops 18% in second quarter as deal doldrums persist

Profits at Morgan Stanley fell 18% in the second quarter as a drought on Wall Street hampered revenue from investment banking.

The bank said on Tuesday that earnings applicable to common shareholders fell to $2.05 billion, or $1.24 per diluted share, for the three months ended June 30. That’s down from $2.39 billion, or $1.39 per diluted share, a year ago.

Investment banking revenue was $1.16 billion, in line with last year.

Global M&A activity fell 36% in the second quarter compared to a year earlier, according to Dealogic. However, its rebound from the first quarter has raised hopes of a new revival.

Shares of the investment bank were up 1.4% in pre-market trading.