Morgan Stanley: a Bright Spot on the Bumpy Market

Morgan Stanley (MS) reported one of its best Q3 earnings since Covid-19 pandemic, delivering an EPS of $1.88, which was $0.29 better than consensus estimate of $1.59, and revenues of $15.38 billion, exceeding the consensus of $14.35 billion. This marked a 15.9% YoY increase in revenues, showcasing the investment bank's improving operating efficiency and high rates of monetization on ad-hoc market opportunities.

The Wealth Management division was a standout, reporting record net revenues of $7.3 billion, up 14% YoY and surpassing the consensus of $6.88 billion. A recovery in investment banking and higher trading volumes helped Morgan Stanley's net income, rising 32% annually to $3.2 billion. The division's net new assets rose 79% from a year ago and 76% QoQ to $64 billion. Revenue was $7.3 billion, up 13.5% YoY and 7% QoQ. Investment banking fees rose 56% from a year ago, the largest increase among the major banks, to nearly $1.4 billion.

The results underpinned a broad recovery in Wall Street operations at the largest U.S. banks. JPMorgan Chase (JPM), Wells Fargo (WFC), Goldman Sachs (GS), Bank of America (BAC) and Citigroup (C) also saw increases in investment banking fees and equity trading revenue.