Net profits at Morgan Stanley slumped 83% to $144m (€118m) in its third quarter after the bank took a $1bn charge from the planned sale of its aircraft financing business and $178m in compensation costs for severance payments and new hires.

The 83% collapse in profits at Morgan Stanley is in sharp contrast to its arch-rival Goldman Sachs, which yesterday reported an 83% rise in profits to a record $1.6bn.