Morgan Stanley made reports mentioning the rise of 87 percent in their earnings during the third quarter as bank’s trading, the businesses of wealth management and investment banking on Wall Street gained benefits from the booming equity market and the heightened client activity.
On Friday, the shares of the bank increased 2.7 percent with $33.40 in the morning trading, as the revenue and profit both handily overcame the average forecast of the analysts.
According to the results, though Morgan Stanley focused on its business in wealth management ever since today’s financial crisis, the operations it is managing for traditional investment banking may still bring a huge impact on their earnings.
Morgan Stanley was able to top the list of global IPO underwriters during 2014’s first nine months, which was the time when the stock offerings from 2007 got really busy. The said company worked on the record of Alibaba Group worth $25 billion as a primary public offering. The revenue for equity underwriting of the bank almost became double and reached $464 million.
The revenue for the general institutional securities, which covers banking for trading, as well as investment, increased 22 percent, reaching $4.2 billion.
Last month, the bond operation of the bank progressed when the U.S. economic data became upbeat, when the stimulus reached Europe, as well as the shocking exit from Pimco of Bill Gross, who is a trading superstar, hit the listless market.
Not including the adjustments in accounting, the revenue from bond trading increased to $997 million, which is 19.4 percent higher. On the other hand, that expanded against Goldman Sachs Group Inc, its archrival, which reached a growth amounting to 53 percent, also not covering accounting adjustments.
Just like other huge banks, Morgan Stanley, too, has been lessening its bond market presence as stronger capital requirements take hold against the trading which is really risky.