Prime Highlights:
- Morgan Stanley posted third-quarter profit of $4.61 billion, beating expectations and marking the largest earnings beat in nearly five years.
- Strong performance across equities trading, investment banking, and wealth management drove record revenue of $18.22 billion.
Key Facts:
- Equities trading revenue rose 35% to $4.12 billion, while investment banking revenue jumped 44% to $2.11 billion.
- Wealth management revenue increased 13% to $8.23 billion, surpassing analysts’ forecasts.
Key Background:
Morgan Stanley on Wednesday reported third-quarter earnings that exceeded analysts’ expectations by the largest margin in nearly five years, driven by strong performance in equities trading, investment banking, and wealth management.
The bank posted a profit of $4.61 billion, up 45% from a year earlier, translating to earnings of $2.80 per share. Revenue rose 18% to reach a record $18.22 billion, surpassing the $16.7 billion analysts had anticipated. Following the announcement, Morgan Stanley shares jumped nearly 5%, bringing gains to almost 30% for the year.
The strong results came from increased activity on Wall Street trading desks and a rebound in investment banking, including mergers and new stock offerings. Morgan Stanley’s wealth management division also saw higher revenue thanks to rising assets and more transaction fees.
Looking at the numbers: equities trading revenue jumped 35% to $4.12 billion, beating expectations by $720 million, with record results in its prime brokerage business for hedge funds. Fixed income trading revenue rose 8% to $2.17 billion, roughly matching analysts’ estimates.
Investment banking revenue climbed 44% to $2.11 billion, driven by mergers, IPOs, and bond sales. Wealth management revenue grew 13% to $8.23 billion, surpassing expectations by about $500 million.
Morgan Stanley’s strong performance follows similar earnings beats from other major U.S. banks, including JPMorgan Chase, Goldman Sachs, Citigroup, and Wells Fargo. Analysts say that high stock levels and busy trading have created a good environment for Wall Street banks.
Overall, Morgan Stanley had a strong quarter across trading, investment banking, and wealth management. Investors are confident as the bank grows in a strong market.