Pre-tax profits at Morgan Stanley’s institutional securities unit plunged more than three-quarters in the second quarter on losses from mortgage proprietary trading and credit products that included a $120m (€77m) cut in value on a single London-based trader’s book.

Profits at the division slumped to $679m in the three months to May from $3bn in the same period last year as net revenues more than halved to $3.6bn.