Ted Choose, CEO Morgan Stanley, talking on CNBC’s Squawk Field on the World Financial Discussion board Annual Assembly in Davos, Switzerland on Jan. 18th, 2024.
Adam Galici | CNBC
Morgan Stanley mentioned second-quarter revenue and income topped analysts’ estimates on stronger-than-expected buying and selling and funding banking outcomes.
This is what the corporate reported:
Earnings: $1.82 a share vs. $1.65 a share LSEG estimateRevenue: $15.02 billion vs. $14.3 billion estimate
The financial institution mentioned revenue surged 41% from the year-earlier interval to $3.08 billion, or $1.82 per share, helped by a rebound in Wall Avenue exercise. Income rose 12% to $15.02 billion.
Shares of the financial institution had declined earlier within the session after the financial institution’s wealth administration division missed estimates on a decline in curiosity earnings. They had been up lower than 1% on Tuesday.
Wealth administration income rose 2% to $6.79 billion, under the $6.88 billion estimate, and curiosity earnings plunged 17% from a 12 months earlier to $1.79 billion.
Morgan Stanley mentioned that is as a result of its wealthy purchasers had been persevering with to shift money into higher-yielding belongings, due to the speed setting, leading to decrease deposit ranges.
Morgan Stanley traders worth the extra regular nature of the wealth administration enterprise versus the much less predictable nature of funding banking and buying and selling, and they’re going to wish to hear extra about expectations for the enterprise going ahead.
Nonetheless, the financial institution benefited from its Wall Avenue-centric enterprise mannequin within the quarter, as a rebound in buying and selling and funding banking helped the financial institution’s institutional securities division earn extra income than its wealth administration division, flipping the same old dynamic.
Fairness buying and selling generated an 18% bounce in income to $3.02 billion, exceeding the StreetAccount estimate by about $330 million. Mounted earnings buying and selling income rose 16% to $1.99 billion, topping the estimate by $130 million.
Funding banking income surged 51% to $1.62 billion, exceeding the estimate by $220 million, on rising mounted earnings underwriting exercise. Morgan Stanley mentioned that was primarily pushed by non-investment-grade firms elevating debt.
“The agency delivered one other robust quarter in an enhancing capital markets setting,” CEO Ted Choose mentioned within the launch. “We proceed to execute on our technique and stay properly positioned to ship progress and long-term worth for our shareholders.”
Final week, JPMorgan Chase, Wells Fargo and Citigroup every topped expectations for income and revenue, a streak continued by Goldman Sachs on Monday, helped by a rebound in Wall Avenue exercise.
