Morgan Stanley profit hits record as stock traders go into overdrive
Morgan Stanley beat Wall Street estimates in the second quarter, with equities trading revenue jumping 69% to a record $6.3 billion.
By Sal Moretti · Money Reporter
2 min read
Morgan Stanley’s stock-trading desk stole the show in the second quarter, powering the bank to record quarterly revenue and profit, according to results released by the company Wednesday.
The Wall Street firm reported earnings of $3.46 per share, topping the $2.94 expected by analysts surveyed by LSEG. Revenue came in at $21.35 billion, ahead of the $19.64 billion estimate.
Profit rose 58% from the same period a year earlier to $5.58 billion, Morgan Stanley said in its earnings materials. Revenue increased 27% to $21.35 billion.
Equities trading does the heavy lifting
The standout number came from equities trading, where revenue jumped 69% to a record $6.3 billion. That was about $1.9 billion above the figure analysts surveyed by StreetAccount had expected.
Morgan Stanley pointed to broad strength across its equities business and cited notable momentum in Asia. CNBC reported that the same global enthusiasm around artificial intelligence helped lift trading results at peers Goldman Sachs and JPMorgan Chase.
According to CNBC, JPMorgan and Goldman together beat equities trading estimates by $4.4 billion, while their combined investment banking results topped estimates by $1 billion.
Fixed income trading was more restrained but still higher. Morgan Stanley said revenue from that business rose 13% to $2.46 billion, roughly in line with consensus expectations, helped by performance in credit trading.
“Active markets and consistent execution across all three regions drove exceptional results for our integrated firm,” CEO Ted Pick said in the company’s release.
Deal fees and wealth management add fuel
Investment banking also had a strong quarter. Morgan Stanley said revenue in the unit climbed 58% to $2.44 billion, about $270 million above analyst expectations.
The bank attributed the rise to more completed mergers, initial public offerings and related equities deals, along with increased debt issuance.
Morgan Stanley’s wealth management arm, a major part of the firm’s business, generated $8.86 billion in revenue. That was up 14% from a year earlier and about $146 million above expectations.
The company said the division benefited from higher asset levels, supported by a rising stock market, as well as growth in deposits and lending.
Investment management, Morgan Stanley’s smallest division, posted revenue of $1.65 billion. The company said that was up about 6%, helped by higher asset values, and was broadly in line with analyst estimates.
The results put Morgan Stanley alongside other major Wall Street banks that have ridden active markets and the AI-driven trading boom to stronger-than-expected second-quarter numbers.
This story draws on original reporting from CNBC.