Morgan Stanley (NYSE:MS) has outstripped analysts’ projections for both profit and revenue. The bank’s first-quarter results showcased robust performances across its core divisions of wealth management, trading, and investment banking, all surpassing expectations.
The numbers speak volumes:
Earnings: $2.02 per share, surpassing the anticipated $1.66, according to LSEG.
Revenue: $15.14 billion, exceeding the projected $14.41 billion.
Marking a 14% increase from the previous year, the bank reported a first-quarter profit of $3.41 billion, translating to $2.02 per share. This growth trajectory was propelled by strong showings in each of its primary segments. Revenue also saw a healthy uptick, climbing by 4% to reach $15.14 billion.
In response to these stellar results, shares of Morgan Stanley soared by more than 3%.
Wealth management emerged as a standout performer, with revenue surging by 4.9% to $6.88 billion. This surpassed StreetAccount estimates by $230 million, buoyed by market upticks driving fee revenue while mitigating a decline in interest income.
Equities trading revenue witnessed a 4.1% uptick to $2.84 billion, surpassing expectations by $160 million, largely fueled by derivatives volumes. However, fixed income trading revenue experienced a slight dip of 3.5% to $2.49 billion, albeit still surpassing expectations by $120 million.
Investment banking emerged as another bright spot, with revenue soaring by 16% to $1.45 billion, slightly surpassing the $1.40 billion estimate. This uptick was propelled by increases in debt and equity issuance, offsetting lower fees from acquisitions.
In contrast, the investment management division, while still showing growth with a 6.8% revenue increase to $1.38 billion, fell short of the $1.43 billion StreetAccount estimate.
CEO Ted Pick, despite facing initial challenges stemming from high interest rates prompting clients to shift cash into higher-yielding securities, expressed confidence in the bank’s resilience. The bank’s shares had faced a downturn of nearly 7% earlier in the year.
Like its counterparts Goldman Sachs and JPMorgan Chase, Morgan Stanley benefited from robust trading and investment banking performances in the quarter.
While analysts queried Pick about regulatory investigations into potential shortfalls in client screening processes within the wealth management division, Pick reaffirmed the bank’s ongoing commitment to stringent client onboarding and monitoring processes. He emphasized the sustained efforts and investments made in this regard, with associated costs factored into the bank’s operational expenses.
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