The company's earnings were reported to be $1.24 a share, which is higher than the Refinitiv estimate of $1.15 per share. Revenue came in at $13.46 billion, surpassing the expected $13.08 billion.
Morgan Stanley posted second-quarter earnings and revenue that exceeded analysts' predictions, aided by an all-time high in their wealth management segment. The bank said that their profit diminished by 13% to $2.18 billion, or $1.24 a share, due to lower trading outcomes from a year ago and severance costs of $308 million. Revenue expanded by 2% to $13.46 billion. The firm's stocks rose more than 6%.
Under James Gorman's leadership, Morgan Stanley's reliance on wealth management has helped its dependable earnings and improved its worth compared to other counterparts. Gorman announced in May that he was setting off a succession contest at the Wall Street powerhouse.
"The firm provided consistent outcomes in a difficult market atmosphere," Gorman declared in the earnings announcement. "The quarter began with macroeconomic doubts and muted customer activity, yet ended with a more positive tone."
Even though certain fees decreased from a year ago, the second-quarter wealth management revenue rose 16% to $6.66 billion on higher interest income, overshooting the $6.5 billion appraisal from analysts surveyed by FactSet. The division took in $90 billion in net new client assets.
The bank's Wall Street branch did not perform as well. The institutional securities business reported a 8% decline in revenue to $5.65 billion, caused by decreases in trading. equities trading generated $2.55 billion in revenue, surpassing the $2.37 billion FactSet estimate, while fixed income produced $1.72 billion, much lower than the $1.99 billion estimate. Investment banking income of $1.08 billion was roughly the same as a year ago and largely in line with analysts' expectations.
Gorman stated during Tuesday's conference call that the bank's board is still assessing three internal candidates for CEO and that he would remain as executive chairman once his successor is promoted. Moreover, he mentioned that the rate increases that have affected the industry could be near completion.
"While we may not be completely at the end of rate increases, I think we are very, very close to it," Gorman said.
Morgan Stanley shares have risen slightly this year while the KBW Bank Index has decreased by approximately 20%. JPMorgan Chase, Citigroup, and Wells Fargo each reported earnings that exceeded analysts' estimates on Friday due to higher interest rates. Goldman Sach's earnings will be reported on Wednesday to wrap up big bank earnings.
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