Morgan Stanley is trimming its investment banking workforce in Asia Pacific by at least 50 positions, sources familiar with the matter told Reuters. This move reflects a broader trend among global banks retreating from the region, largely in response to a downturn in Chinese markets. The layoffs will impact approximately 13 per cent of Morgan Stanley's investment banking team in Asia, which totals 400 employees, according to one of the sources. Hong Kong and mainland China-based bankers are expected to bear the brunt of the cuts. All sources who spoke to Reuters requested anonymity as they were not authorised to speak to the media. A spokesperson for Morgan Stanley declined to comment on the matter. Bloomberg initially reported on the job reductions on Wednesday. These layoffs represent one of the largest cutbacks to Morgan Stanley's investment banking division focused on China and come amid similar actions taken by other banks grappling with reduced deal-making activities in the region due to a slowing economy. In January, Bank of America (BofA) shed around 20 banking positions in the region, following a trend of downsizing among investment banks such as UBS, Citigroup, and several boutique firms. Despite these workforce adjustments, Morgan Stanley reported a first-quarter profit of $2.02 per share, surpassing analysts' average estimate of $1.66, according to data from LSEG. The bank's total revenue increased to $15.14 billion compared to $14.5 billion a year earlier, with investment banking revenue rising by 16 per cent compared to the same period last year. However, in the Asia-Pacific region, merger and acquisition advisory fees for the bank in the first quarter plummeted by 41.5 per cent to $30.4 million, as per data compiled by LSEG. Nonetheless, Kevin Nicholson, global fixed income chief investment officer at RiverFront Investment Group, remains optimistic, stating that strong corporate earnings should continue to drive stock prices, despite recent market fluctuations. Morgan Stanley's equity capital markets fees, including those from Japan, amounted to $68.5 million for the first quarter, marking a 26.3 per cent increase compared to the same quarter in 2023, according to LSEG data.
