Morgan Stanley (MS, Financial) has announced better-than-expected income figures, leading to significant profit growth in the third quarter. The bank reported a 13% increase in revenue from its trading business. This follows a trend among major Wall Street firms experiencing strong market performance and a steady rebound in investment banking fees.
The wealth management segment generated $7.27 billion in revenue, surpassing analyst expectations, with net new assets reaching $64 billion. CEO Ted Pick highlighted that investment banking is in a multi-year cycle, and the rebound of fee income bodes well for the company. Morgan Stanley also assured that the profitability of its substantial wealth management division is set to rise.
Despite Morgan Stanley's stock price rising 20% this year, it still lags behind its industry peers. The stock gained 2% in pre-market trading. The bank's fixed income trading revenue was $2 billion, exceeding analyst forecasts of $1.85 billion, although it remains the smallest among Wall Street’s top five firms.
Equity business revenues totaled $3.05 billion. A robust stock market helped offset slower fixed income trading, with Morgan Stanley's equity revenue growing by 27%, and competitors like JP Morgan, Goldman Sachs, and Bank of America experiencing increases of 18%.
Advisory fee income for Morgan Stanley stood at $546 million, above the estimated $525 million, while equity underwriting revenue reached $362 million.
Overall, Morgan Stanley's total revenue reached $15.4 billion, above the anticipated $14.3 billion, with a pre-tax profit margin of 28.3% in wealth management. Earnings per share were reported at $1.88.
