Morgan Stanley (NYSE:MS) reported a 57 percent rise in quarterly profits on Wednesday, after a strong growth in bond trading revenue.
The New York-based investment bank posted better-than-expected quarterly figures, reporting a profit of $1.6 billion (81 cents per share), marking a significant 62 percent increase on the $939 million reported for the same period of last year. Conversely, analysts commissioned by Reuters had initially predicted Morgan Stanley to earn around 63 cents a share, on revenue of $8.17 billion.
Morgan Stanley’s chief executive James Gorman said in a statement:
“While the environment was more challenging for our equity underwriting and asset management businesses, our expense initiatives remain on track. Overall the results reflect steady progress against our long term strategic goals.”
In particular the bank saw a rise in bond trading revenue, with profit almost tripling within this sector. Previously the area had been a continued source of concern, as it struggled to profit from difficult capital requirements. Earlier in the year, Morgan Stanley instigated an effective restructuring of the area, reducing 25 percent of staff as well as appointing new management.
Bond trading has generally been profitable across all recently released Wall Street revenue reports, having benefited on the back of the UK’s destabilising vote to leave the European Union.
Additionally, revenue from their wealth management sector, which the bank has been developing for several years, rose 7 percent to $3.9 billion. As a result, the business hit a 23 percent pre-tax margin effectively meeting Gorman’s last quarter target.
Despite strong revenue figures, Morgan Stanley shares were up by less than 1 percent at 0.5 percent in early trading. The Wall Street bank was the last of the leading US-based banks to post profit earnings for the last quarter this week. Similarly, Goldman Sachs Group Inc (NYSE:GS), Morgan Stanley’s largest competitor, reported a better-than-expected 58 percent growth in third-quarter profit on Tuesday.
