The Top Dogs always do seem to make money.
An investment banking surge at Morgan Stanley has reinforced a dealmaking revival across Wall Street, though the company’s wealth management unit fell short of analyst expectations.
Fees from investment banking jumped 51% from a year ago, the second-largest leap among big banks after Citigroup. Investment banking fees also rose at JPMorgan Chase, Wells Fargo, Goldman Sachs, and Bank of America, signaling renewed activity following a two-year drought.
CNBC – Morgan Stanley beats estimates on strong trading and investment banking results @CNBC https://t.co/6bgKtNB0P8
— Phil De Carolis (@PhilDeCarolis) July 16, 2024
Morgan Stanley CEO Ted Pick, addressing the investment banking rebound, noted that many industry insiders had anticipated this resurgence. He acknowledged past predictions of “green shoots” that did not materialize after some false starts in 2023. “It has been sort of a delayed shoots, if you will,” he said.
The increase in investment banking and trading activity helped Morgan Stanley push its net profit up by 41% from a year earlier, reaching $3.07 billion. Its total net revenue of $15.02 billion marked a 12% rise, both figures surpassing analyst expectations.
Morgan Stanley profit surges on investment banking, trading, while wealth lags https://t.co/7XG1po6KLA
— Lacquicia (Classy Lady) Blair (@LacquiciaBlair) July 16, 2024
Despite these successes, Morgan Stanley’s wealth management division faced challenges. Net new assets in that division fell 59% from a year ago and 62% from the last quarter, down to $36.4 billion. Revenues were $6.79 billion, a 2% increase from a year ago but a 1.28% decrease from the last quarter, both measures weaker than analysts had predicted.
“The firm delivered another strong quarter in an improving capital markets environment,” Pick said in a press release. “We continue to execute on our strategy and remain well positioned to deliver growth and long-term value for our shareholders.”
Morgan Stanley’s stock rose more than 3% in Tuesday morning trading. As of late Monday, the stock had increased nearly 13% since January, though it trailed some of its other big-bank rivals.
Key Points:
- Morgan Stanley’s investment banking fees surged 51%, signaling a dealmaking revival on Wall Street.
- Investment banking fees rose at major banks like JPMorgan, Wells Fargo, Goldman Sachs, and Bank of America.
- Morgan Stanley’s net profit increased by 41%, with total net revenue rising 12%, both exceeding expectations.
- The wealth management division faced a decline, with net new assets falling 59% year-over-year.
- Morgan Stanley’s stock has risen nearly 13% since January, despite challenges in wealth management.
Fallon Jacobson – Reprinted with permission of Whatfinger News
