The wealth management unit reported net revenues of $3.9 billion during the second quarter, up 4.7 percent from the $3.7 billion reported a year ago.
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The bank’s profit in the year-earlier quarter was boosted by a one-time tax benefit of United States dollars 609 million.
Net revenue at the bank totaled $9.74 billion, compared with $8.61 billion in the same period a year earlier. Asset management fee revenues of $2.2 billion increased from $2.1 billion a year ago, but transactional revenues of $872 million decreased from $991 million last year. Year-on-year, its fixed income and commodities trading revenues were up 30% in Q2 and for the first half were up by 21%.
Shares of Morgan Stanley have dropped 0.5% to $40.00 at 3:44 p.m. today, while Goldman Sachs has dipped 0.1% to $212.28.
Strong quarter for Morgan Stanley, but we maintain our Market Perform rating as we search for new catalysts after recent move.
Fixed-income trading pulled located on the revenue of alternative great Wall Street…
Morgan Stanley’s results also included a six-cent per share adjustment that is tied to the value of the firm’s underlying debt.
“Morgan Stanley’s wealth-management business is kind of its own unique animal”, Devin Ryan, an analyst with JMP Group Inc., said in an interview with Bloomberg Television before the results were announced.
On an adjusted basis, the bank earned 79 cents per share – exceeding the average analyst estimate by 5 cents, according to Thomson Reuters I/B/E/S. The figure is significantly up from analysts’ estimates of $9.10 billion.
Spot gold fell more than 4 percent to as low as US$1,088.05, though recovered to trade above US$1,100 recently. During the same quarter in the previous year, the company posted $0.60 earnings per share.
“Any increase in United States interest rates should further strengthen the dollar, prompting more fund outflows from commodities, metals and emerging-market assets”, Vattana Vongseenin, the chief executive officer of Phillip Asset Management in Bangkok, told Bloomberg. “They’ll have a pretty solid quarter, and wealth management should also have a good result”.
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“We believe shedding of non-core business is likely to improve the company’s profitability in the long run”, said Zacks Equity Research in late June as it predicted higher earnings for the investment bank following its restructuring efforts. Gorman has set a target of 22-25 percent for the business this year. This is a loss of 144 advisors from the previous quarter and down 545 advisors reported with the firm a year ago.
