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Morgan Stanley reported a 58 per cent rise in second-quarter profits, as a market bonanza driven by AI speculation played to the bank’s historic strengths in stock trading.
The Wall Street group reported quarterly net income of $5.6bn, up from $3.5bn a year ago and ahead of estimates for $4.7bn.
Revenues in equities trading rose almost 70 per cent to $6.3bn. Rivals JPMorgan Chase, Goldman Sachs, Citigroup and Bank of America reported similar blockbuster quarters for equities trading on Tuesday.
In total, the five investment banks reported revenues from equities trading of $25.7bn, up more than 70 per cent from a year earlier.
The results are the latest example of the huge gains Wall Street banks are reaping from facilitating and financing transactions tied to AI spending, which has stimulated financial markets.
Morgan Stanley’s investment banking revenues jumped almost 60 per cent to $2.4bn, slightly ahead of the $2.2bn analysts were anticipating. This included $100mn for its work on SpaceX’s huge IPO.
The bank’s wealth management business, which generated about 40 per cent of its earnings last year, attracted net new assets in the second quarter of $148bn, crushing forecasts for about $67bn. The figure is followed closely by investors as a gauge of the business’s growth trajectory.
The bank hit $10tn in client assets across its wealth management and smaller asset management division during the quarter.
Morgan Stanley shares were trading up 0.3 per cent in early pre-market trading. The bank’s stock closed up 3 per cent on Tuesday on the back of the other banks’ results.
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