Morgan Stanley’s investment-banking surge cemented a trading revival across Wall Street, but the firm’s asset-management unit fell short of analysts’ expectations.
Investment banking fees rose 51% from a year ago, the second-biggest increase among major banks after Citigroup (C).
Investment-banking fees also soared at JPMorgan Chase (JPM), Wells Fargo (WFC), Goldman Sachs (GS), and Bank of America (BAC) as trading boomed after two years of stagnation.
“A lot of people were expecting this,” Morgan Stanley Chief Executive Ted Pick told analysts on Tuesday when asked about a recovery in the investment banking division.
He referred to previous industry talk of so-called “green shoots” in 2023 that failed to emerge after several setbacks.
“The filming was delayed, so to speak,” he said.
Morgan Stanley’s net income rose 41% to $3.07 billion from a year ago, driven by strength in investment banking and increased trading. Total net revenue rose 12% to $15.02 billion.
Both figures beat analyst expectations.
Morgan Stanley CEO Ted Pick. REUTERS/Jeenah Moon (REUTERS / Reuters)
The company’s shares were up more than 2% in morning trading Tuesday and were up nearly 13% since the start of January as of late Monday, lagging behind other big banking rivals.
One issue that emerged Tuesday was Morgan Stanley’s recent performance in its wealth management business, which provides financial advice to wealthy individuals.
The division’s net new assets were $36.4 billion, down 59% year over year and 62% quarter over quarter. Revenue was $6.79 billion, up 2% year over year and down 1.28% quarter over quarter.
Both measures were weaker than analysts had expected.
“The company experienced another strong quarter amid improving capital markets conditions,” Pick said in a press release.
“We continue to execute on our strategy and remain well positioned to deliver growth and long-term value to our shareholders.”
David Hollerith is a senior reporter at Yahoo Finance covering banking, cryptocurrency and other areas of finance.
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