Morgan Stanley rides trading and deal revival to record quarter

Morgan Stanley’s second-quarter beat was less a cost-cut story than a sign that Wall Street’s core engines are running hot again. The bank said net income applicable to shareholders rose to $5.58 billion, or $3.46 a share, from $3.54 billion, or $2.13 a share, a year earlier. Revenue hit a record $21.35 billion, above the $19.64 billion analyst estimate cited by LSEG. [0]

The sharpest swing came from markets. Equities trading revenue jumped 69% to $6.3 billion, with Morgan Stanley citing strong client activity and notable strength in Asia. Fixed-income trading rose 13% to $2.46 billion, leaving the firm with a broad beat across its institutional securities arm. marketscreener

Dealmaking also returned as a tailwind. Investment-banking revenue climbed 58% to $2.44 billion, helped by completed M&A, IPO underwriting and debt issuance. Reuters’ account of the quarter said first-half announced M&A reached $2.8 trillion, the strongest opening half in LSEG records, while Morgan Stanley worked on major equity-market transactions including SpaceX’s market debut and Cerebras’ New York listing. [0]

The company announced the results on July 15 and said the package would be filed with the Securities and Exchange Commission on Form 8-K. tradingview The filing showed why investors may treat the quarter as more than a trading spike: wealth management added $148.1 billion in net new assets, total client assets across wealth and investment management reached $10 trillion, and return on tangible common equity was 26.6%. Morgan Stanley also authorized up to $20 billion in buybacks and lifted its quarterly dividend to $1.15 a share. cnbc

The risk is that the same volatility that boosted trading can fade, while higher activity pushed expenses up 16% from a year earlier. Zacks noted higher compensation, brokerage, technology and marketing costs, but also pointed to stronger advisory, underwriting and client-asset growth as offsets. kelo Morgan Stanley’s quarter puts it alongside JPMorgan and Goldman Sachs, whose results also showed capital markets recovering faster than expected. marketscreener