Morgan Stanley beats Q3 earnings estimates as surge in investment banking eclipses growth in wealth management

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  • Morgan stanley declared in the third trimester earnings which exceeded analysts’ expectations as equity trades boosted growth.
  • The bank’s wealth management business continued to benefit from its acquisitions of E-Trade and Eaton Vance, but fell short of expectations.
  • “We delivered exceptional performance from our integrated investment bank and recorded new net assets of $ 135 billion in wealth management. Said CEO James Gorman.
  • Watch Morgan Stanley trading live on Markets Insider.

Morgan stanley job third quarter results which exceeded analysts’ expectations in terms of revenue and bottom line, thanks to a boom in income from investment banking and equity trading.

Strong growth in Morgan Stanley’s trading activity helped stocks rise around 2% before the market began trading on Thursday. The wealth management business has recorded $ 400 billion in new client assets since the start of the year, thanks to its E-Trade and Eaton Vance acquisitions.

Overall revenues grew 26%, with gains across all of its business units, including institutional securities, wealth management and investment management services. The bank now has $ 6.2 trillion in assets.

Here are the key figures:

Income: $ 14.8 billion, compared to the estimate of $ 13.95 billion
Adjusted EPS:
$ 1.98, versus estimate of $ 1.68

Morgan Stanley’s wealth management unit reported net income of $ 5.9 billion for the quarter, representing 26% year-over-year growth. The results were led by the stock Exchange sitting near record highs for much of the quarter, increased new client assets and high fees from its advisor-led channel. Transactional revenues jumped 38%.

Investment banking revenues jumped 67% to $ 2.8 billion on IPO stock underwriting activity and large trading blocs driven by more bids secondary companies. Bond income fell 16% due to a decline in Morgan Stanley’s macro business and a less volatile environment.

The company’s allowance for credit losses on loans and loan commitments continued to decline from its pandemic peak to $ 24 million in the quarter, compared to $ 111 million for the third quarter of 2020. This decrease is due to continuous improvement of the macroeconomic environment, according to the bank mentioned.

“We delivered exceptional performance from our integrated investment bank and recorded new net assets of $ 135 billion in wealth management. Wealth and Investment Management, bringing our combined total client assets to $ 6,200 billion, ”said CEO James Gorman.

Morgan Stanley said it repurchased $ 3.6 billion of its shares during the quarter, as part of its share buyback program. Morgan Stanley shares are up 47% year-to-date.

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