Morgan Stanley CFO on physical commodities unit: “It’s been a good business for us for many years” (MS)

From a liveblog of the Morgan Stanley Conference call that took place on Friday.
From MarketWatch:

...Investment bank Morgan Stanley  MS  reported a big jump in third-quarter profit Friday morning, helped both by higher revenue and lower costs. Read a recap of the earnings call with CEO James Gorman and CFO Ruth Porat, who talked about the controversial physical commodities business, how they’re trimming assets in fixed-income trading, how they’re cutting risk in the investment bank, and how they’re still socking away money for potential lawsuits.
-Christina Rexrode

• • 10:08 am
  • by Christina Rexrode 

• Barclays analyst Roger Freeman asks about Morgan Stanley's physical commodities business. Regulators have been weighing how to curb banks like Morgan Stanley and Goldman Sachs from owning oil pipelines, metals warehouses and other physical commodities. 

• "It's been a good business for us for many years," Porat replies. "We want to be smart about what we do to drive returns from the business for the firm overall, and so really no update at this point."

Compare with "Goldman third quarter commodity revenue down 'significantly' on second quarter" via Reuters:

Speaking on the bank's third-quarter conference call, Chief Financial Officer Harvey Schwartz said the firm's commodity business had suffered from a difficult trading environment between June and September, a period when the bank came under intense political and regulatory pressure over its role in the natural resources supply chain.

"Commodities declined significantly versus the second quarter under challenging macro conditions and lower client activities," Schwartz said in prepared comments.

Before revealing the quarter-on-quarter decline, the bank earlier said in its earnings release that commodities was one of the few areas in its Fixed Income, Currencies and Commodities (FICC) business where third-quarter results had improved from the same period last year....MORE

See also our Thursday post "Goldman Reports Decline in Commodity Business Value-at-Risk as Fed Mulls Physical Commodity Surcharge".