Morgan Stanley Results reported on Tuesday topped analysts’ profit and revenue forecasts, with wealth management, trading and investment banking beating expectations.
Here’s what the company reports:
- Earnings per share were $2.02, compared with expectations of $1.66, according to LSEG
- Revenue: $15.14 billion, $14.41 billion expected
The bank said first-quarter profit rose 14% from a year earlier to $3.41 billion, or $2.02 a share, driven by gains in performance across its three main divisions. Revenue grew 4% to $15.14 billion.
The bank’s shares rose more than 3%.
Wealth management revenue rose 4.9% to $6.88 billion, $230 million above StreetAccount’s forecast, as rising markets helped boost fee income and offset a decline in interest income.
Driven by derivatives trading volume, stock trading revenue increased 4.1% to $2.84 billion, $160 million higher than expected. Fixed-income trading revenue fell 3.5% to $2.49 billion, but still beat expectations by $120 million.
Investment banking revenue jumped 16% to $1.45 billion, beating estimates of $1.4 billion, as higher debt and equity issuance offset lower acquisition fees.
The company’s smallest unit, investment management, was the only major business unit to perform worse than expected. Although revenue grew 6.8% to $1.38 billion, it was lower than StreetAccount’s forecast of $1.43 billion.
Chief Executive Ted Pick’s tenure got off to a rocky start as high interest rates spurred the bank’s wealth management clients to move cash into higher-yielding securities. The bank’s shares had fallen nearly 7% this year before Tuesday.
But just like competitors, including Goldman Sachs and JPMorganMorgan Stanley benefited from strong trading and investment banking performance in the quarter.
Last week, JPMorgan Chase, Wells Fargo and Citigroup Revenue and profit beat expectations, and Goldman Sachs continued that momentum on Monday, Bank of America Tuesday.
Analysts question Peake over reports multiple U.S. regulators are investigating investigation Morgan Stanley has potential flaws in screening clients for its wealth management unit.
“We’ve been focusing on the customer onboarding and monitoring process for some time,” Peake said on Tuesday. “We’ve spent time, effort and money over the years, and that work continues. We’ve been working hard, with this The associated costs are mainly reflected in the expense run rate.”
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