Q3 earnings driven by trading, IPOs, and wealth growth
Morgan Stanley reported third-quarter earnings that exceeded analyst expectations by the widest margin in nearly five years, fueled by booming equities trading, investment banking, and wealth management. The bank posted earnings per share of $2.80 versus the expected $2.10, and revenue reached a record $18.22 billion, surpassing the $16.7 billion estimate.
Net income surged 45% year-over-year to $4.61 billion. Morgan Stanley shares rose nearly 5% in premarket trading, bringing its year-to-date gain to approximately 24%.
Equities and banking fuel record revenue
Equities trading revenue jumped 35% to $4.12 billion, outperforming analyst estimates by $720 million. The increase was attributed to heightened activity across regions and strong performance in its prime brokerage division serving hedge funds. Fixed income trading revenue also rose 8% to $2.17 billion, aligning with expectations.
Investment banking revenue climbed 44% to $2.11 billion, driven by a revival in mergers, initial public offerings, and fixed income fundraising. This figure beat estimates by about $430 million.
Wealth management hits $8.23 billion
Morgan Stanley’s wealth management division generated $8.23 billion in revenue, a 13% year-over-year increase and approximately $500 million above expectations. The growth came from increased asset values and higher transaction fees as stock markets remained near record highs.
The earnings release came a day after other major U.S. banks—JPMorgan Chase, Goldman Sachs, Citigroup, and Wells Fargo—also posted stronger-than-expected third-quarter results, suggesting robust financial sector performance overall.
