Morgan Stanley beats profit estimates as bond trading revenue surges

The logo of Morgan Stanley is seen at an office building in Zurich, Switzerland September 22, 2016. ― Reuters pic
The logo of Morgan Stanley is seen at an office building in Zurich, Switzerland September 22, 2016. ― Reuters pic

NEW YORK, Jan 16 — Morgan Stanley beat estimates for quarterly profit by a wide margin today, powered by strength in its investment management, bond trading and underwriting businesses.

Revenue from sales and trading rose 28 per cent to US$3.19 billion (RM12.9 billion). Bond trading sales more than doubled to US$1.27 billion from a year earlier when financial markets were roiled by trade and global growth concerns.

Revenue from investment banking, which includes advising on deals and helping corporations raise money, rose 11.2 per cent, buoyed by higher bond and equity underwriting.

“We delivered strong quarterly earnings across all of our businesses ... This consistent performance met all of our stated performance targets,” Chief Executive James Gorman said in a statement.

Under Gorman, Morgan Stanley has been hitting key financial targets consistently for some time, which suggests he may announce new targets soon, according to analysts.

Shares of Morgan Stanley rose about two per cent in trading before the bell.

Investment management revenue nearly doubled to US$1.36 billion, with overall net revenue rising by 27 per cent to US$10.86 billion.

The bank said earnings attributable to common shareholders rose to US$2.09 billion, or US$1.30 per share, in the quarter ended December 31, from US$1.36 billion, or 80 cents per share, a year ago.

Analysts had expected a profit of 99 cents per share, according to IBES data from Refinitiv. — Reuters

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