Morgan Stanley's net income climbs to £2.11 billion in the third quarter

Cornelia Mascio
Ottobre 18, 2020

The Wall Road behemoth reported third quarter revenue of $2.7 billion, or $1.66 a share, on $11.7 billion in income.

"We delivered strong quarterly earnings as markets remained active through the summer months", Gorman wrote in a statement announcing the results.

The bank had already warned that the division would not perform as well in the third quarter as it had in the second, when it had benefited from huge swings in financial markets due to the coronavirus outbreak.

Even as trading returns to the spotlight amid the pandemic, chief executive James Gorman has been taking steps to shore up Morgan Stanley's asset and wealth management businesses to insulate the bank from weak periods for trading and investment banking.

Gorman engineered two large back-to-back acquisitions recently a $7bn deal to buy Eaton Vance Corp to expand its investment-management business immediately after closing its $13bn acquisition of discount brokerage E*Trade Financial Corp. Firms like Morgan Stanley, with little exposure to consumer credit woes, have fared best.

The company's shares have fallen less than one per cent since the start of the year, the best performance among the top six banks.

In the comparable quarter of a year ago, it had reported a lower £1.68 billion of net income or 98 pence per share. Its trading operation - helping clients chop and change their portfolios - was responsible for the lion's share of the outperformance, bringing in nearly half a billion dollars more than expected.

Morgan Stanley shares have declined roughly 1% since the beginning of the year, while the Standard & Poor's 500 index has increased 8%. The average estimate of seven analysts surveyed by Zacks Investment Research was for earnings of $1.26 per share. The bank had a key role on the direct listing of secretive big-data firm Palantir Technologies Inc. - a process that was beset by some opening-day technical hiccups.

Revenue from Morgan Stanley's institutional securities division, which is the bank's largest breadwinner and houses its investment banking and trading businesses, rose 21% to $6.06bn. Visit MarketWatch.com for more information on this news.

Morgan Stanley's revenue and profit both beat analysts' overall forecasts.

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