Morgan Stanley announced record results in investment banking and asset management on Thursday, with third-quarter profits and revenue exceeding expectations.
The following are the numbers:
- Earnings: $1.98 per share, compared to the analyst survey’s estimate of Refinitiv at $1.68 per share
- Revenue: $14.75 billion and $14 billion estimate
“The company has another very strong quarter, with strong revenue and improved efficiency,” CEO James Gorman said in a press release. “Our integrated investment bank has performed well and has set a net new asset value of US$135 billion in wealth management.”
The bank’s shares rose 2.2% in pre-market trading.
With the help of Gorman’s acquisition of E-Trade and Eaton Vance, revenue and net income increased by more than 25% over a year ago, which expanded the company’s wealth and asset management department.
Although rival banks reported a slowdown in fixed income trading revenue in the third quarter, Morgan Stanley’s advantage has traditionally been its largest equity business in the world.
Stock trading income increased by 24% from the same period last year to US$2.88 billion, exceeding expectations by more than US$500 million. Fixed income revenue fell 16% to US$1.64 billion, slightly higher than the expected US$1.53 billion.
Another booming area is investment banking, driven by strong merger and IPO activities, and Morgan Stanley is also a leader in this area. Competitor advisor JP Morgan Chase announced record investment banking fees in the third quarter.
Morgan Stanley’s investment banking business achieved revenue growth of 67% in the quarter, reaching a record $2.85 billion, more than $600 million higher than StreetAccount’s estimate, thanks to strong M&A advisory fees.
Before Thursday, the bank’s stock price had risen 44% this year, surpassing the 36% increase in the KBW Bank Index.
JPMorgan Chase’s performance on Wednesday exceeded expectations, thanks to a boost of US$1.5 billion from better-than-expected loan losses. Bank of America’s performance on Thursday exceeded analysts’ expectations because it benefited from better-than-expected loan losses and record consulting and asset management expenses.
This story is developing. Please check for updates.
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