Volatility boosts Morgan Stanley's first quarter trading income

Morgan Stanley clocked-in with its best quarterly earnings performance in 10 years on Wednesday, as volatility in global capital markets saw its trading revenues jump by nearly a fifth.

For the first quarter of 2018, the bank posted a 38% jump in total net income on a continuing basis to reach $3.42bn, for earnings per share of $1.45, which easily beat the consensus forecast from analysts polled by FactSet for $1.26.

That came on the back of a bumper 17% increase in net revenues to $11.08bn (consensus: $10.37bn), led by a 35% increase in revenues at its Institutional Securities unit to $6.1bn.

"We delivered very strong results this quarter, with record revenues and net income - and an ROE above our target range. Each of our businesses performed well, with significant client engagement across our global franchise, and Sales and Trading a particular highlight in a more active environment," said Morgan Stanley's boss, James P Gorman.

Within that, trading sales rose up by 17% to hit $3.77bn, accounting for the bulk of the improvement, and were up by 68% versus the end of 2017.

In equities, sales and trading revenues rose by roughly 30% to $2.6bn (consensus: $2.23bn) and those from fixed income by 12% to reach $1.9bn.

As at 31 March, total assets under management stood at $469bn, versus $421bn one year ago.