Morgan Stanley (NYSE:MS), the sixth-largest U.S. bank, said its second-quarter profit rose 66 percent, topping analysts' predictions, as revenue from equities trading, wealth-management and investment banking increased. Shares jumped in premarket.
Net income for the three months that ended June 30 rose to $980 million, or 41 cents a share, from $591 million, or 29 cents a share, a year earlier, the New York-based firm said in a statement on Thursday. Taking out the value of the firm's debt, or DVA, in addition to one-time items, the company earned 45 cents a share, above the 43 cents predicted by 22 analysts on average.
Quarterly revenue, stripping out accounting adjustments, advanced to $8.33 billion from $6.6 billion a year earlier. That beat analysts' estimate of $7.89 billion.
Morgan Stanley shares climbed 4.6 percent to $27.75 at 8:21 a.m. in New York on Thursday, headed for the highest price in more than a year. The shares have rises approximately 39 percent so far this year, compared with a 26 percent gain for JPMorgan Chase & Co. (NYSE:JPM), the largest U.S. bank by assets.
“This quarter, we saw significant year-over-year revenue growth in each of our five major business units and higher year-over-year profitability," Chief Executive Officer James Gorman said in the statement.
"Equity sales and trading results were strong across all products and regions, while investment banking delivered top-three rankings in announced and completed M&A, global equity offerings and global IPOs," he added.
Wealth management revenue grew 10 percent to $3.53 billion, accounting for a profit margin of 18.5 percent. Revenue from investment banking jumped 22 percent to $1.08 billion. Equities sales and trading rose 58 percent to $1.81 billion, excluding DVA. Fixed-income revenue rose 50 percent from $770 million.
Revenue from debt underwriting increased about 24 percent to $418 million, while revenue from equity underwriting rose about 16 percent to $327 million.
Asset management reported a pretax profit of $160 million, up from $43 million in the year-earlier period.
Morgan Stanley is the last of the six biggest U.S. banks to report better-than-expected second-quarter net income. On Wednesday, Bank of America Corp. (NYSE:BAC), the second-biggest U.S. lender, posted a 63 percent increase as revenue from equities sales and trading increased and expenses decreased.
On Monday, Citigroup Inc. (NYSE:C), the third-largest U.S. bank by assets, reported a 42 percent gain to $4.18 billion, or $1.34 a share, as stock-trading revenue increased and losses on mortgages dropped.
Last Friday, JPMorgan posted 31 percent increase to $6.5 billion, or $1.60 a share, as its trading revenue rallied and it shaved more provisions for bad loans. Also on Friday, Wells Fargo & Co. (NYSE:WFC), the fourth-biggest U.S. bank by assets, reported a 20 percent rise to $5.52 billion, or 98 cents a share, as it set aside less money to cover bad loans.