Thursday 16 July 2020 4:26 pm

Morgan Stanley reports record revenues after surge in trading

Morgan Stanley today revealed quarterly earnings had beaten analysts’ expectations, even as coronavirus ravaged the US economy.

The Wall Street bank’s record profit was boosted by strong trading revenues which jumped nearly 70 per cent.

Read more: Goldman Sachs beats profit forecasts to defy coronavirus

The figures:

Morgan Stanley reported net revenues of $13.4bn (£10.64bn) for the second quarter, compared with $10.2bn (£8.1bn) a year ago.

It reported a record profit of $3.2bn (£2.54bn), or $1.96 a share, beating the $1.12 estimate of analysts surveyed by Refinitiv.

Why it’s interesting:

Morgan Stanley is more heavily weighted towards trading than other banks such as JP Morgan. Trading revenues jumped 68 per cent on “strong client management” which helped bolster overall revenues.

Investment banking revenues were up 39 per cent, to $2bn, including a 68 per cent rise in fees for helping customers raise debt.

The wealth management division of the bank, which typically accounts for around half of revenues, recorded a six per cent rise in revenues to $4.7bn. This was “despite a challenging market and rate environment”.

Morgan Stanley’s better-than-expected results follow a trend in Wall Street this week that saw JP Morgan and Goldman Sachs beat estimates.

Read more: Morgan Stanley profit drops by nearly a third

What Morgan Stanley said

Chief executive James Gorman said: “Our decade long business transformation was intended to provide stability during times of serious stress.”

“The second quarter tested the model and we performed exceedingly well, delivering record results. This builds on the momentum of a very strong first quarter, while more
than 90 per cent of our employees continue to work from home, demonstrating the ongoing operational resilience of our

“We remain focused on supporting our employees, communities, and clients, while managing our risk and
continuing to invest in our businesses.”