Morgan Stanley profit jumps 32%, IB windfall outpaces GS

Morgan Stanley rose as much as 7.48% following the result.

The context: Morgan Stanley’s report wraps up the major earnings season for the largest US banks, coming just after Goldman Sachs posted a 45% jump in profit the day before, helped by a 20% increase in investment banking fees.

Morgan Stanley outpaced its rival with a 56% surge in investment banking revenue, driven by a revival in M&A activity and corporate debt issuance.

Morgan Stanley’s broader strength across wealth management and trading helped boost its overall performance.

What they said: "We are seeing a rise in equity capital markets activity led by financial sponsors, not only for IPOs in the US but also in Europe," Morgan Stanley CFO Sharon Yeshaya told Reuters.

"We are only getting started and capital markets are only going to get stronger,” she told Bloomberg, adding: “It’s good but it’s not the peak.”

In a statement accompanying the result, CEO Ted Pick said: “The Firm reported a strong third quarter in a constructive environment across our global footprint. Institutional Securities saw momentum in the markets and underwriting businesses on solid client engagement.”

“Total client assets have surpassed USD7.5 trillion across Wealth and Investment Management supported by buoyant equity markets and net asset inflows. Our business model is delivering strong returns while accreting capital, producing an ROTCE of 18.2% through the first three quarters of 2024.”