Total loans were down 5 percent. The investment banking unit brought in less in fees for underwriting and other services. Sales and trading revenue fell, which the bank blamed on investors' low appetite for risk. Net income rose in the wealth and investment management unit, and the bank added financial advisers.
In a note to clients, Nomura analyst Glenn Schorr noted the improving credit quality and cost cutting, but said they were being offset by the growing mortgage claims and low interest rates that crimp how much the bank can charge on its loans. He titled his note "Running in Place."
"We think shares can hang in there on these results," he wrote.
Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.