(Reuters) – Morgan Stanley (MS.N) posted a 32% fall in quarterly profit on Thursday as its advisory and wealth management businesses took a hit from the economic fallout of the COVID-19 pandemic.

FILE PHOTO: The corporate logo of financial firm Morgan Stanley is pictured on a building in San Diego, California, Sept. 24, 2013. REUTERS/Mike Blake

The results capped first-quarter earnings from big U.S. banks, marked by significant declines in profit and billions in provisions to cover for a wave of expected loan defaults due to a global economic slowdown triggered by the pandemic.

Morgan Stanley’s wealth management unit, which contributes roughly half of its total revenue, fell 8% to $4.04 billion, as it bore the brunt of the ongoing turmoil in financial markets.

The wealth business, which the bank has relied on as a reliable source of revenue during periods of market volatility, reported a pre-tax margin of 26.1%, below the bank’s target range of 28-30%.

“Over the past two months, we have witnessed more market volatility, uncertainty and anxiety as a result of the devastating COVID-19 than at any time since the financial crisis,” Chief Executive Officer James Gorman said.

Advisory revenue fell 11% as dealmaking took a beating in the quarter as businesses braced for a massive slowdown in the coming months.

The bank’s trading desks were a bright spot with a 30% surge in revenue, boosted by wild swings in markets during the quarter. This was led by a 29% jump in bond trading and a 20% rise in equities.

“While it’s too early to predict how this will unfold, Morgan Stanley navigated the quarter well given the conditions,” Gorman said.

The bank said earnings attributable to common shareholders fell to $1.59 billion, or $1.01 per share, in the first quarter ended March 31, from $2.34 billion, or $1.39 per share, a year ago.

Analysts had expected a profit of $1.14 per share, according to IBES data from Refinitiv.

Reporting by Bharath Manjesh in Bengaluru and Elizabeth Dilts Marshall in New York; Editing by Saumyadeb Chakrabarty

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