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Morgan Stanley
said its second-quarter revenue grew 39% over last year, concluding a season of big-bank results that showed the continued strength of the # 39; s economy. Assets earned $ 2.4 billion in profits on revenues of $ 10.6 billion. On a per share basis, Morgan Stanley's profit of $ 1.30 beat the $ 1.11 expected by analysts. Revenues also exceeded analysts' expectations polled by Thomson Reuters of about $ 500 million.
The company, led by the General Manager
James Gorman,
is in the final stages of a multi-year recovery effort. Mr. Gorman's investment in wealth management – Morgan Stanley manages $ 2.4 trillion for 3.5 million US households – has stabilized its profits and reassured investors, who had remained at the same time. gap after repeated burns.
According to FactSet data, only JPMorgan Chase & Co.'s bank shares are more expensive than book value.
Sustained economic growth, lower taxes, and new asset price volatility have helped the big banks this year. Goldman Sachs Group Inc., Morgan Stanley's closest peer, announced Tuesday its best first half in nine years. Both companies have large companies that trade mergers, subscribe for securities and trade on behalf of hedge funds and other investors.
Morgan Stanley's return on equity, which measures the profitability of its shareholders' investment, stood at 13% during the quarter, exactly the target set by Mr. Gorman – but with lower taxes.
The escalating global tensions, the commercial battles and the reduction of the gap between the cost of short and long-term debt – often the sign of economic decline – n & # 39; They have not scared investment funds and companies that use banks such as Morgan Stanley to trade securities, advise on transactions and arrange financing.
"Economic data is still healthy enough," Morgan Stanley's chief financial officer
Jonathan Pruzan,
said in an interview Tuesday. "Businesses Feel Good, Consumers Feel Good, Pockets of Volatility Seems to be Isolated and Not to Tilt into the Broader Market"
"Until now, our customers have not been less active, "he continued." If he starts putting people in defensive mode, we will have another second half of the year. "
Stock market activity Morgan Stanley, which is the largest on Wall Street in terms of market share, is reporting $ 2.5 billion up 21% from a year ago. In this activity, while its competitors, including JPMorgan and
Citigroup
Inc.
saw the revenue increase by two digits.
Fixed income trading, an activity in which Morgan Stanley reduced its operations and refocused on fewer products, rose 13% to $ 1.4 billion. Commodities and loan trading were both solid, the company said.
Revenue from business mergers boards increased 19% to $ 618 million, while underwriting revenues increased 10% to $ 1.1 billion. Morgan Stanley has landed on most IPO prizes of the quarter, leading the $ 1 billion worth of the Dutch payment company
Adyen
NV and the unusual listing of Spotify Technologies Inc.
These trading and investment banking activities are now under the jurisdiction of
Ted Pick.
The 49-year-old man, who had been trading, in recent weeks, has also been overseeing banking, sign that he is one of the main candidates for Mr. Gorman's estate.
The firm's retail brokerage generated $ 4.3 billion in revenue, up slightly from the previous year. Assets under management remained at $ 2.4 trillion compared to the previous quarter, as new cash inflows offset declines in the markets. Morgan Stanley charges a flat fee, generally around 1%, on many of its accounts, which means that its revenues are closely tied to the value of its client portfolios.
He also tried to lend more, pushing mortgages and securities-backed loans through his 15,600 brokers. Outstanding loans to wealth clients reached a record high of $ 70 billion. The number of brokers continues to decline as the older workforce retires and Morgan Stanley relies more heavily on technology.
The smallest division of the company, asset management, shows an 11% increase in its turnover. Mr. Gorman has a soft spot for this business – which accounts for only 7% of the company's overall business figure, but requires little capital to operate – and aims to develop it, partly through d & # 39; acquisitions.
Write to Liz Hoffman at [email protected]
