Morgan Stanley (NYSE: MS) announced Wednesday that it swung back to a profit in the first quarter as net revenues surged more than three-fold. Results were driven by large gains in the bank’s fixed income and trading unit, along with the institutional securities business.
The New York based bank said first quarter profits hit $1.41 billion or 99 cents a share, a large reversal from the loss of $578 million or 57 cents a share in the same period last year. The result
easily surpassed analyst estimates for earnings of 57 cents a share, according to Thomson Reuters.
Net revenues surged in the period, totaling $9.08 billion, more than triple the $2.9 billion generated in the first quarter last year. Revenue outpaced analyst expectations for $7.95 billion.
The growth was driven by robust revenues from sales and trading, which hit $4.1 billion in the quarter, up from $1.4 billion last year.
President and CEO James P Gorman. “Our client-focused investment banking franchise remains a clear industry leader – with a strong presence and deep ties around the globe – and we are working to continue broadening those client relationships.”
The bank’s brokerage business, Morgan Stanley Smith Barney, also showed strength as customers come back into a rebounding stock market. The unit generated $3.1 billion in revenue in the first
quarter, while adding $5.8 billion in net new assets.
Similar to its peers, Morgan Stanley’s improved results led to increased compensation expenses. Such costs more than doubled to $4.4 billion from $2 billion last year. However, compensation as a percentage of net revenue fell to 49 percent from 68 percent in the quarter a year ago.
