Morgan Stanley joins US banks’ profit recovery
BOOMING bond and equities trading revenues gave Morgan Stanley its best quarter since the financial crisis, as the investment bank joined its peers in celebrating a strong rise in profits yesterday.
Net income came in at $2.3bn (£1.5bn) for the first quarter, up 59 per cent on the year.
Revenues rose 10.1 per cent to $9.9bn, firmly outstripping the six per cent rise in non-interest expenses which came in at $7.1bn.
The star performer was trading revenues, which shot up 23 per cent on the year to £3.7bn.
Equities sales and trading drove much of that, with revenue rising from $1.7bn to $2.3bn. But bonds and commodities also helped, up from $1.7bn to $1.9bn.
Such strong performance helped drive up pay and bonuses by five per cent to $4.5bn.
Meanwhile investment banking revenues rose four per cent to $1.4bn, driven by mergers and acquisitions advisory work. However, revenues from equity and debt capital markets underwriting declined.
Investment management revenue slid 11 per cent to $669m.
The results mean the bank earned a return on equity of 10.1 per cent, getting towards territory regarded as sustainably above lenders’ cost of capital.
Morgan Stanley’s shares rose 0.57 per cent on the day.