Morgan Stanley’s wealth management unit drives quarterly profit

Bank posts 11% rise in quarterly profit but bond trading revenue declined

Morgan Stanley posted an 11 per cent rise in quarterly profit as strength in wealth management and investment banking businesses more than made up for a slowdown in trading.

The bank’s wealth management revenue rose 8.7 per cent to $4.22 billion - its highest ever, while investment banking revenue rose 12.7 per cent to $1.38 billion.

Bond trading revenue, however, fell 20 per cent to $1.2 billion, mirroring declines across the sector.

Citigroup, JPMorgan Chase & Co and Bank of America have all reported steep declines in fixed income trading activity due to a slump in volatility.


Revenue from equities trading, a business in which Morgan Stanley is typically strong, remained flat at $1.9 billion.

"Our third quarter results reflected the stability our wealth management, investment banking and investment management businesses bring when our Sales and Trading business faces a subdued environment," chief executive James Gorman said.

Earnings applicable to common shareholders rose to $1.69 billion from $1.52 billion a year ago. Earnings per share rose to 93 cents from 81 cents.

Revenue rose 3 per cent to $9.20 billion from a year earlier.

Analysts had forecast earnings of 81 cents per share and revenue of revenue $9.01 billion. It was not immediately clear if the figures were comparable.

Margan Stanley's shares were up 1.6 percent in premarket trading. Arch rival Goldman Sachs Group Inc is also scheduled to report results on Tuesday.

- (Reuters)