Published: Sun, October 18, 2020
Economy | By

Morgan Stanley Profit, Revenue Rise

Morgan Stanley Profit, Revenue Rise

Its trading operation - helping clients chop and change their portfolios - was responsible for the lion's share of the outperformance, bringing in nearly half a billion dollars more than expected.

"We delivered strong quarterly earnings as markets remained active through the summer months, and our balanced business model continued to deliver consistent, high returns", CEO James Gorman said.

Buying and selling income performed an enormous function in Morgan Stanley's rising income by 25 % within the quarter regardless of the financial influence of the coronavirus.

Morgan Stanley followed suit, reporting a 20% rise in trading revenue and a 118% rise in stock underwriting. Experts had forecast a much lower £2.59 billion of revenue from sales and trading in the recent quarter. Fixed income trading was $1.92B, while equity was $2.26B.

It was a tale of two types of banks in the third quarter.


The gains boosted equities trading as well as the bank regained its standing as No. 1 in that business business through the three-month period. The bank had a key role on the direct listing of secretive big-data firm Palantir Technologies Inc. - a process that was beset by some opening-day technical hiccups.

"As long as we're in this uncertain environment, Goldman and Morgan Stanley are absolutely the lower-risk way to play financials", Oppenheimer Senior Analyst Chris Kotowski says. "There's an emerging view that the election will not be as clear as has historically been the case". Visit MarketWatch.com for more information on this news.

The banking giant says the current quarter included intermittent net discrete tax benefits of $113 million which had an impact of $0.07 per diluted share.

The 17% surge in revenue comes amid an acquisition spree by the firm, as it acquired both E-Trade and Eaton Vance so far this year. Gorman's sales and trading team rode a frothy stock market to a 20 percent revenue increase from previous year, netting $4.1 billion for the three months ending in September, $400 million more than analysts projected.

The new Morgan Stanley will rely on its beefed-up wealth- and money-management businesses for a majority of its revenue, while also trying to maintain its standing in the markets and dealmaking world.

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