Morgan Stanley is the last of the big U.S. banks to report its results this week.
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Morgan Stanley ‘s recent purchases of Eaton Vance and E*Trade helped the bank to deliver higher earnings than expected for the second quarter.
The investment bank (ticker: MS) earned $3.5 billion, or $1.85 a share, from $14.8 billion of revenue. Analysts surveyed by FactSet expected the bank to earn $1.66 per share on $13.97 billion in revenue.
In the year-earlier quarter, the bank earned $3.2 billion or $1.96 per share, with revenue of $13.7 billion.
“The Firm delivered another very strong quarter, with contributions from all of our businesses,” James Gorman, Morgan Stanley’s chief executive, said in a statement. “Our global franchise is very well positioned to drive further growth.”
Morgan Stanley’s wealth-management division reported a 30% jump in revenue as a result of the recent acquisition of E*Trade. The purchase of Eaton Vance contributed to a 92% increase in revenue for the investment-management business.
Morgan Stanley’s institutional securities segment was a mixed bag. Investment- banking revenue climbed 16%, with increases in completed mergers and acquisitions and equity underwriting. That contrasts with last year, when capital markets activity was briefly paused due to the coronavirus pandemic.
But like the banks that reported earlier this week Morgan Stanley saw a sharp drop in trading revenue. Fixed-income trading was down 45% while equity trading revenue slid 8%.
Morgan Stanley is the last of the big banks to report results this week. Peers such as Goldman Sachs Group (GS) and JPMorgan Chase (JPM) also delivered better-than-expected results, but their stocks suffered as investors looked for new sources of growth given the decline in trading activity. Bank of America (BAC), Wells Fargo (WFC), and Citigroup (C), also reported their results this week.
Morgan Stanley shares were down 1.4% in premarket trading.
Write to Carleton English at [email protected]
