Parsing Purcell

11 May 2005 By Rob Cox Follow @rob1cox

In his first public outing since Morgan Stanley s turmoil began, Purcell left investors with a queasy feeling about the firm and the future. His performance underscores the hard slog the investment bank faces magnified by an impending slowdown of Wall Street earnings.

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Morgan Stanley chief executive Phil Purcell, in his first public appearance since management turmoil at the firm resulted in the departures of five senior executives, cautioned investors about a more difficult operating environment in the industry.

The warning sent Morgan Stanley shares down 2.6% on Monday. Purcell made the remarks in a presentation with copresidents Stephen Crawford and Zoe Cruz at a UBS conference. Purcell defended his strategy of integrating the bank's various operations, including its retail brokerage, and said the spinoff of Discover is being done to help better allocate the credit card unit's capital.

Purcell admitted that the firm faces some morale problems as a result of the management shuffle he put in place six weeks ago, which led to the departures of five members of the firm's 14member executive committee. Being in the paper every day doesn't help morale in investment banking, he said.

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