Morgan Stanley Q2 numbers top expectations

Morgan Stanley’s second- quarter results topped expectations on Wednesday, underpinned by better-than-forecast performances in wealth management and fixed income.

For the quarter ended 30 June, the bank reported net revenues of $8.9bn, down from $9.7bn a year ago and net income of $1.6bn or $0.75 per diluted share compared to $1.8bn or $0.85.

Analysts had been expecting revenue of $8.3bn and EPS of $0.59.

Chairman and chief executive officer James P Gorman said: “Our results this quarter reflect solid performance in an improved but still fragile environment. In the midst of market uncertainty, we maintained our leadership positions across our core franchises and continued our focus on prudent risk management and judicious expense control.

"We remain committed to executing for our clients and delivering on our strategic priorities for our shareholders.”

Revenues in wealth management fell 1.7% to $3.81bn, while fixed-income trading revenue was up 2.4% to $1.3bn and equity trading revenue slipped 5.5% to $2.15bn. All the figures beat analysts’ expectations.

Meanwhile, MS said compensation expense came in at $4bn, down from $4.4bn a year ago, partially driven by lower revenues.

The annualised return on average common equity was 8.3% in the current quarter.

Shares were up 2.9% to $28.19 in pre-market trade.