A near doubling in bond trading revenue helped quarterly results from US banking giant Morgan Stanley (NYSE:MS) beat market expectations, showing a big contrast with recent numbers from main rival Goldman Sachs Inc (NYSE:GS).
For the three months to March 31, Morgan Stanley saw its earnings surge by 74% to US$1.84bn, up from US$1.06bn a year earlier, while earnings per share rose to 100 US cents from 55 US cents, beating expectations for 88 US cents.
Net revenue jumped by 25% in the quarter to US$9.75bn, also beating the average estimate of US$9.27bn.
Strong underwriting fees drove revenue from investment banking to US$1.55bn, up by about 40%.
Bonds strong …
Bond trading remained strong across Wall Street during the quarter as investors shuffled their positions around Federal Reserve interest rate hikes.
Revenue in the bank's fixed-income trading business rose to US$1.7bn, up from US$873mln in the quarter, the best quarter for the business in two years.
Equities weak …
However, revenue from trading in stocks, in which Morgan Stanley has held the top spot among Wall Street banks, fell to US$2bn from US$2.1bn.
The bank’s chief executive, James Gorman, said: "We reported one of our strongest quarters in recent years. All our businesses performed well in improved market conditions.”
In pre-market trading in New York, Morgan Stanley shares were about 2.5% higher at $42.28.
The bank's results stood in sharp contrast to those Goldman Sachs, the only lender among the big Wall Street banks to have reported a drop in trading revenue.