Morgan Stanley says income from continuing operations in the second quarter ended May 31, 2008, was $1 billion compared with $2.4 billion in the second quarter of last year. Net revenues were $6.5 billion, 38 percent below last year’s second quarter. Non-interest expenses of $5.1 billion, including severance expense of some $245 million related to staff reductions, decreased 28 percent from a year ago.

Global wealth-management group’s pre-tax income for the second quarter was $989 million, compared with $264 million in the second quarter of last year. The quarter’s pre-tax margin was 41 percent, compared with 16 percent in last year’s second quarter.

Excluding a one-time item, net revenues for wealth management — led by James Gorman — were $1.7 billion, up 4 percent from a year ago.

Total client assets were $739 billion, an $11 billion increase from last year’s second quarter. Client assets in fee-based accounts were $194 billion, an 8 percent decrease from a year ago; they represent 26 percent of total client assets.

The 8,350 global representatives at quarter-end had average annualized revenue per global representative of $810,000 and total client assets per global representative of $89 million. Excluding the sale of MSWM S.V., the number of global representatives has increased 2 percent from the first quarter of this year.

Janet Levaux, MBA/MA, is the managing editor of Research; reach her at