Morgan Stanley profit beats estimates as traders shine, but investment banking revenue falls Tatiana Bautzer and Manya SainiJuly 16, 2025 at 9:30 PM By Tatiana Bautzer and Manya Saini (Reuters) Morgan Stanley's profit beat Wall Street estimates in the second quarter as its traders cashed in on volat...
- - - Morgan Stanley profit beats estimates as traders shine, but investment banking revenue falls
Tatiana Bautzer and Manya SainiJuly 16, 2025 at 9:30 PM
By Tatiana Bautzer and Manya Saini
(Reuters) -Morgan Stanley's profit beat Wall Street estimates in the second quarter as its traders cashed in on volatile markets, mirroring results among its Wall Street rivals.
Equities trading revenue surged 23%, while it jumped 9% in fixed income, Morgan Stanley said on Wednesday, as the turbulence also spilled into bond markets.
Equity markets swung sharply during the quarter after U.S. President Donald Trump announced sweeping tariffs against major economies. This spurred trading as investors repositioned their portfolios and hedged risks.
Institutional Securities, which houses Morgan Stanley's Wall Street operations, posted revenue of $7.6 billion, compared with $7 billion a year ago.
"The second quarter unfolded with two distinct halves. The first half began with uncertainty and market volatility associated with the U.S. trade policy, and the second half ended with increasing engagement and a steady rebound in capital markets," CEO Ted Pick told analysts.
Goldman Sachs, Citigroup and JPMorgan Chase all reported trading windfalls in the second quarter.
Morgan Stanley posted net income of $3.5 billion, or $2.13 per share, for the three months ended June 30. That compares with $3.1 billion, or $1.82 per share, a year earlier.
Analysts on average had expected $1.96 per share, according to estimates compiled by LSEG.
Morgan Stanley's revenue reached $16.8 billion in the second quarter, topping estimates of $16.1 billion.
Shares of the bank were flat following the results.
Morgan Stanley's investment banking revenue fell 5% in the quarter, lagging rivals including Goldman and JPMorgan Chase.
Advisory revenue slid to $508 million, compared with $592 million a year ago, due to lower completed M&A transactions.
Chief Financial Officer Sharon Yeshaya said some deals were delayed during the most volatile period of the second quarter, after Trump's initial announcement of high import tariffs in early April. But the bank is optimistic about the environment now.
"Corporations are looking past tariffs to lead their companies through strategic movements and growth," Yeshaya said.
The investment bank's equity underwriting surged 42% to $500 million, driven by higher follow-on and convertibles deals as well as IPOs.
Morgan Stanley was the lead underwriter of fintech giant Chime's $864 million June IPO. The bank also led IPOs for Hinge Health, raising $437.3 million, and marketing tech firm MNTN, which raised $187.2 million, in May.
Industry executives also held up that optimism this week, anticipating that deals and stock-market listings will pick up in the second half of the year.
Among prominent deals in the quarter, Morgan Stanley advised Elon Musk's xAI on a $5 billion debt raise and a separate $5 billion strategic equity investment. It also advised TJC on the $5 billion sale of Silvus Technologies to Motorola.
Fixed-income underwriting fell 21% to $532 million on lower non-investment-grade issuances.
Wealth management revenue increased to $7.8 billion in the second quarter from $6.8 billion a year earlier. It posted net new assets of $59 billion and fee-based asset flows of $43 billion for the period.
Morgan Stanley has focused on growing its wealth management business by deepening relationships with existing clients and attracting new ones, aiming to build a more stable revenue base less exposed to market swings. It has a target of managing $10 trillion in client assets.
"Total client assets across Wealth and Investment Management reached $8.2 trillion," Pick said.
Attracting net new assets is critical for wealth and investment management, as it drives fee-based revenue and supports long-term growth in assets under management.
Pick said the bank will be "evaluating inorganic opportunities where there is clear strategic alignment," as well as buying back stock opportunistically.
Pick became the CEO of Morgan Stanley in January 2024. He took on the additional role of chairman at the start of this year.
He replaced long-time CEO James Gorman, who is credited with turning Morgan Stanley into a wealth management behemoth, raising profits and making the bank's results more predictable.
(Reporting by Manya Saini in Bengaluru and Tatiana Bautzer in New York; Editing by Lananh Nguyen, Sriraj Kalluvila and Mark Porter)
Source: "AOL Money"
Source: Astro Blog
Read More >> Full Article on Source: Astro Blog
#LALifestyle #USCelebrities