Morgan Stanley beats Q2 estimates as wealth and trading deliver windfall
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The news: Morgan Stanley’s flagship wealth management business and trading division helped the Wall Street bank deliver a 15% increase in profits for the second quarter.
The news: The bank reported a net income of USD3.5 billion ($5.38 billion) for the second quarter, ahead of analyst expectations of USD3.2 billion.
Morgan Stanley’s wealth management division raked in USD59.2 billion in net new assets during the quarter, ahead of the USD45.8 billion forecast and well ahead of the USD35.4 billion achieved in the comparable quarter last year.
The bank’s traders reeled in USD3.72 billion in equity-trading revenue, a 23% jump from a year ago and ahead of analyst expectations. Fixed income trading climbed 9% to USD2.2 billion in Q2, capitalising on recent market turmoil.
The context: The results make the period Morgan Stanley’s second best trading quarter on record, as banks were able to capitalise on the volatility spurred by Trump’s trade tariffs.
Despite the strong performance across wealth management and trading, Morgan Stanley’s investment banking division continues to struggle, seeing a 5% decline in revenues to USD1.54 billion during the quarter which it blamed on “lower completed M&A transactions.”
What they said: Ted Pick, chairman and CEO said in a statement: “Wealth continues to deliver, adding [US]$59 billion of net new assets and [US]$43 billion of fee-based flows. Total client assets across Wealth and Investment Management reached [US]$8.2 trillion. We announced an increase of our quarterly common stock dividend to [US]$1.00 per share with flexibility to deploy incremental capital. The management team is executing across the Integrated Firm, acting as a trusted adviser to clients and driving durable growth and long-term returns for our shareholders.”
The sources: Morgan Stanley earnings, Bloomberg, FT
