Morgan Stanley profit rises on equity trading strength

Key facts

• Morgan Stanley reported third-quarter net income of $4.61 billion, or $2.80 per share.
• Revenue increased 18% year-over-year to a record $18.22 billion.
• Equities trading revenue jumped 35% to $4.12 billion.
• Investment banking revenue surged 44% to $2.11 billion.
• Wealth management revenue rose 13% to $8.23 billion.

Morgan Stanley reported a significant increase in third-quarter net income, driven by strong performance across its key business segments. The bank's net income rose 45% from the previous year to $4.61 billion, or $2.80 per share, exceeding analyst consensus estimates of $2.10 per share. Total revenue reached a record $18.22 billion, an 18% increase compared to the same period last year.

The robust results were largely fueled by a 35% surge in equities trading revenue, which climbed to $4.12 billion, surpassing analyst expectations by $720 million. This performance was attributed to increased activity across various business lines and regions, including record results in its prime brokerage business.

Investment banking revenue also saw substantial growth, jumping 44% to $2.11 billion, supported by a rise in completed mergers, initial public offerings, and fixed income fundraising activities. The wealth management division continued to be a significant contributor, with revenue increasing by 13% to $8.23 billion, driven by rising client balances and increased trading activity. Total client assets across wealth and investment management reached $8.9 trillion.

Bank of America also reported strong third-quarter earnings, with net income up 23% to $8.5 billion on revenue of $28.24 billion, also beating analyst expectations. Its wealth and investment management division saw net income of $1.3 billion on revenue of $6.3 billion, with client balances rising 11% to $4.6 trillion.