morgan stanley It joined other major banks in reporting a resurgence in trading and said third-quarter profits rose 32%.
The Wall Street giant reported net income of $3.2 billion, or $1.88 per share, for the three months ended Sept. 30, up from $2.4 billion, or $1.38 per share, a year earlier. .
This exceeded analysts' estimates compiled by the London Stock Exchange Group (earnings per share of $1.58, revenue of $15.38 billion).
Morgan Stanley stock rose more than 7% to $120.34 in the hour after the opening bell rang on Wall Street Wednesday morning.
The results were boosted by investment banking revenue of $1.46 billion, up 56% from a year earlier, beating expectations of $1.36 billion.
“I'm bullish on the return of IPOs and M&A,'' CEO Ted Pick said. “It may take some time…I think these companies will become global, mature companies and will very much need our advice.”
Pick, who was appointed to head the bank on January 1 to replace James Gorman, also cited the bank's investment banking presence in Europe and Asia as a potential driver of future growth. .
“Running a global investment bank is going to take its toll for years to come,” he told Wall Street analysts.
Rival Goldman Sachs reported a 20% rise in fees on Tuesday, while Citi announced a 31% increase in investment banking profits in its third-quarter results on Friday.
The move comes as U.S. rivals posted a series of strong financial results after two years of high interest rates put a brake on mergers and acquisitions.
Rising interest rates will make it more expensive for major companies to secure the funds needed to sign megabucks M&A deals.
Morgan Stanley Chief Financial Officer Sharon Yeshaya told investors in an early morning conference call that “financial sponsor-led equity capital market activity has increased for IPOs, not only in the U.S. but also in Europe.'' “There is,” he said. “Business activities are becoming more active.”
The resurgence in trading activity comes after the bank reshuffled its investment banking leadership earlier this year.
In July, it promoted Mo Asomlu to new co-head of investment banking alongside Eli Gross and Simon Smith.
The company also named Evan Damast and Henrik Goebel as the new leaders of its global capital markets division.
Mr. Pick, a tenured employee who joined the firm after graduating from college, added that Morgan Stanley's results were also boosted by its wealth management business.
“Customer assets across asset management and investment management exceeded $7.5 trillion, supported by a strong stock market and net asset inflows,” Pick said.
Morgan Stanley entered the space under former CEO James Gorman, who set a goal of $10 trillion in assets.
Revenue in wealth management, a key focus area, rose to $7.27 billion from $6.4 billion a year ago, the bank said.
“The company is performing very well in all sectors, and Ted Pick has quickly built a leadership presence and investor trust,” said MacRae Sykes, portfolio manager at Gabelli Funds. he said.
