Morgan Stanley’s quarterly profits surge on trading gains

Earnings per share rose to $1 from 55 cents

Morgan Stanley reported a 74% jump in quarterly profit. (Photograph: Reuters/Mike Segar)

Morgan Stanley reported a 74 per cent jump in quarterly profits on Wednesday, helped by a bump in trading gains as investors shuffled their portfolios following interest rate hikes by the US Federal Reserve.

The bank’s results stood in sharp contrast to those of chief rival Goldman Sachs, which reported a rare drop in trading revenue on Tuesday.

Earnings applicable to common shareholders rose to $1.84 billion (€1.72 billion) in the three months ended March 31st, from $1.06 billion a year earlier, while earnings per share rose to $1 from 55 cents.

Analysts on average had expected a profit of 89 cents per share, according to Thomson Reuters.


The bank also hit a key milestone laid out by chief executive James Gorman by achieving a 10.7 per cent return on equity, a measure of the firm’s profitability. Gorman had set a target in January 2016 for 9 per cent to 11 per cent return on equity by the end of this year.

“We reported one of our strongest quarters in recent years. All our businesses performed well in improved market conditions,” he said in a statement. Revenue in the bank’s fixed-income trading business rose to $1.7 billion from $873 million in the quarter, the best quarter for the business in two years.