Morgan Stanley (NYSE: MS) on Thursday posted second-quarter results that blew past analysts’ estimates on stronger-than-expected trading revenue.
The bank generated record profit of $3.2 billion, or $1.96 a share including an eight-cent-per-share expense tied to taxes, exceeding the $1.12 a share estimate of analysts. Revenue climbed roughly 30% to a record $13.4 billion, a surprise increase that exceeded expectations by a full $3 billion.
Morgan Stanley, which is essentially a global investment bank paired with a large wealth management business, benefited from one of Wall Street’s best trading quarters in years. The New York-based bank runs the biggest stock-trading business on Wall Street, as well as a bond trading division that punches above its weight.
Fixed income traders had a blowout quarter, posting a nearly 170% revenue increase to $3.03 billion. Equities traders generated a more modest 23% increase in revenue to $2.62 billion. Combined, the trading division gained $1.4 billion more revenue than analysts had expected.
Investment banking revenue climbed 39% to $2.05 billion, fueled by a boom in debt and equity issuance.
Under CEO James Gorman, Morgan Stanley has emphasized its wealth management division to provide a steady and growing source of revenue. He doubled down on that with the acquisition of E-Trade, a deal that will close in the fourth quarter.
Wealth management generated a surprise 6% increase in revenue to $4.68 billion, fueled by an uptick in transaction fees.
Shares in MS advanced $1.01, or 2%, to $52.36.
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