December 11, 2023

Morgan Stanley CEO James Gorman speaks on May 6, 2014 in New York.

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Morgan Stanley Tuesday release Second-quarter earnings and revenue topped analysts’ expectations thanks to record wealth management performance.

Here is the company’s report:

  • Earnings: $1.24 per share, may not match Refinitiv estimates of $1.15 per share
  • Revenue: $13.46 billion vs. $13.08 billion expected

Profit fell 13% to $2.18 billion, or $1.24 a share, due to lower trading performance last year and a round of layoffs that triggered a $308 million severance package, the bank said. Revenue rose 2 percent to $13.46 billion.

Under Chief Executive James Gorman, Morgan Stanley’s reliance on wealth management has helped its steady earnings and boosted valuations relative to peers. Gorman, who took over the firm in 2010, said in May that he was preparing to step down within a year, sparking a succession battle for the Wall Street giant.

“The company delivered solid results in a challenging market environment,” Gorman said in the release. “The quarter began with macroeconomic uncertainty and subdued client activity but ended on a more constructive note .”

Wealth management revenue rose 16 percent to $6.66 billion in the second quarter, beating the $6.5 billion forecast by analysts polled by FactSet, thanks to higher interest income, despite low market levels that caused some fees to fall from a year earlier. The unit absorbed $90 billion in net new client assets.

The bank’s Wall Street unit underperformed. Institutional securities revenue fell 8 percent to $5.65 billion due to lower trading volumes. While equities trading generated $2.55 billion in revenue, beating the FactSet estimate of $2.37 billion, fixed income generated $1.72 billion, well below the $1.99 billion estimate.

Investment banking revenue was $1.08 billion, roughly flat year-over-year and largely in line with analyst expectations.

Morgan Stanley shares are up slightly this year, compared with a roughly 20% decline in the KBW Bank Index.

on Friday, JPMorgan, Citigroup and FuGuo bank Both companies reported earnings that topped analysts’ expectations amid rising interest rates. Goldman Sachs Big banks report earnings on Wednesday.

The story is developing. Please check for updates.