NEW YORK (AP) — Investment bank Morgan Stanley said its second-quarter profits rose by 39 percent from a year ago, driven by another strong performance in trading and investment banking, as well as a lower tax bill.
The New York-based bank said Wednesday that it earned $2.44 billion in the second quarter, up from $1.76 billion in the same period a year earlier. On a per-share basis, Morgan Stanley earned $1.30 a share, up from 87 cents a share. Analysts were expecting Morgan to earn $1.11 a share, according to a survey of analysts by FactSet.
Morgan Stanley’s quarter was driven by its bread-and-butter businesses: trading stocks and bonds, and helping companies with mergers, acquisitions and other business decisions.
“The second quarter performance reflected active markets and healthy client engagement,” said James Gorman, Morgan Stanley’s chairman and chief executive officer, in a statement.
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The bank’s trading desks did particularly well this quarter, posting their second-best quarterly performance in trading since 2010. Stock trading saw net revenues rose to $2.5 billion in the quarter from $2.2 billion a year earlier. Fixed income trading, which is not something Morgan Stanley is traditionally a strong player in, also saw revenues rise sharply to $1.4 billion from $1.2 billion.
Investment banking revenues were $1.7 billion, up from $1.4 billion, driven by increased sales across all of its businesses.
Wealth management, a part of Morgan Stanley’s business that executives are trying to grow aggressively, had a quieter quarter than the investment banking side. Pretax income for wealth management was $1.2 billion, up from $1.1 billion in the same period a year earlier.
Executives such as Gorman have been emphasizing wealth management as a business where Morgan Stanley can earn more steady income, in contrast to the bank’s trading desks, whose performance can swing wildly depending on how the markets perform each quarter.
Net revenues for the firm were $10.61 billion, up from $9.5 billion in the same period a year earlier.
Shares rose 2.9 percent to $50.60 in premarket trading.