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Morgan Stanley’s profits rose 14 per cent in the first quarter, fuelled by a rebound in its investment banking and trading business and a better than expected performance from its juggernaut wealth management division.
Morgan Stanley said net income in the first three months of the year was $3.4bn, up from $3bn a year earlier, and comfortably ahead of analyst estimates compiled by Bloomberg of $2.7bn.
The quarter was the first under new chief executive Ted Pick, and highlighted the ability of Morgan Stanley’s wealth management business to add new client assets on a large scale.
The division drew in billions of dollars more than investors were expecting in the quarter. Net new assets in wealth were around $95bn, compared with analysts’ expectations of $62bn.
“As a result of strong net new asset growth, the firm has reached $7tn of client assets across wealth and investment management,” said Pick, who took over from long-time chief James Gorman in January.
Morgan Stanley’s stock was up about 3 per cent in pre-market trading.
Revenues at the bank’s equities trading business — which analysts had expected to decline — were instead up 4 per cent at $2.8bn. Revenues from fixed income trading fell 4 per cent.
Morgan Stanley’s investment banking business reported a 16 per cent increase in revenues from a year earlier, benefiting from a slow recovery in mergers and debt and equity underwriting after almost two years of lacklustre activity. But Morgan Stanley’s recovery in investment banking was less pronounced than at many of its rivals.
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