Morgan Stanley is shedding about 50 jobs in London as it eliminates 300 credit-related positions worldwide.

The cuts, which come two weeks after the group made 600 people redundant in its mortgage origination business, principally relate to bonds backed by mortgage payments and loans made to finance leveraged buyouts.

About 200 of the positions will be cut in the US, with most of the rest falling in Europe and a handful in Asia. It is understood that between 40 and 60 positions will go at Morgan Stanley’s office in London.

Morgan Stanley confirmed it was cutting jobs but declined to give a figure. The redundancies came as JPMorgan announced that it too had suffered heavily from the credit crunch.

The group yesterday reported a 70 per cent drop in third-quarter profit at its investment banking division to $296 million (£145 million) after taking a $1.64 billion writedown on the value of leveraged loans and collateralised debt obligations, or pools of bonds, on its books.

JPMorgan’s retail bank, which operates under the Chase brand, saw profits fall by 14 per cent to $2.21 billion as weakening house prices prompted a sixfold increase in credit-loss provisions to $680 million. It still managed to record a slight increase in third-quarter net income, to $3.4 billion, from $3.3 billion the year before.

Its third-quarter results compare favourably with Citigroup, which this week reported a 57 per cent decline in third-quarter profit, as the world’s biggest financial services group took a $6.5 billion writedown, much of it related to the credit crunch.

Times Recommends

• Equitable Life halts £7bn sale on market turmoil
• Potential buyers emerge to save Woolworths staff
• Terrorist attacks close Bombay Stock Exchange