Morgan Stanley (NYSE: MS) has posted better than expected results in the third quarter of FY 17 after its wealth management business posted strong results, however, its fixed income and equities traders sailed a tough environment. But this is better than its peers like JPMorgan. As a result, the MS shares surged over 0.9% on October 17th, 2017 (As of 12:41PM EDT; Source: Google finance).
MS in the third quarter of FY 17 has reported the adjusted earnings per share of 93 cents, beating the analysts’ estimates for the adjusted earnings per share of 81 cents. The company had reported the adjusted revenue growth of 35.9 percent to $9.197 billion in the third quarter of FY 17, beating the analysts’ estimates for revenue of $9.015 billion. MS has reported an approximately 9 percent increase in net wealth management revenue to $4.22 billion, which is slightly better than the $4.21 billion projected by FactSet. The fixed income trading revenues fell 21 percent to a slightly better-than-expected $1.2 billion from $1.5 billion. The bank has attributed the decline to be a “subdued activity.”
However, JPMorgan Chase has reported an overall decline of 21 percent in trading revenue and a 27 percent drop in bond trading sales. Citigroup has reported a 16 percent decline in fixed-income revenue, but a 16 percent increase in stock trading revenue. Bank of America has posted a 22 percent drop in bond trading revenue.
Moreover, Morgan Stanley has reported an encouraging result within wealth management division. The wealth-management revenue has increased 9 percent to $4.22 billion, compared with the $4.1 billion predictions of KBW Inc. The pretax margin grew to 26.5 percent from 23 percent in the third quarter last year. The fee-based client account assets have increased 4 percent to a record high of $1 trillion.
Additionally, in the third quarter, the investment banking did well. The revenues of investment banking grew 15 percent to $1.27 billion, exceeding the $1.15 billion estimate of analysts surveyed by Bloomberg. The mergers activity has continued its momentum and the “pipelines remain healthy across products and geographies.