Morgan Stanley has ignited a revival in Wall Street dealmaking, with a notable 51% surge in investment banking fees, second only to Citigroup (C) among major banks. However, the firm’s wealth management unit fell short of analyst expectations.
The resurgence in dealmaking was mirrored by other giants like JPMorgan Chase (JPM), Wells Fargo (WFC), Goldman Sachs (GS), and Bank of America (BAC), signaling the end of a two-year drought in investment banking activities.
Morgan Stanley CEO Ted Pick, addressing analysts on Tuesday, noted the long-anticipated rebound. “A number of folks have been calling for this,” he said, acknowledging previous discussions of “green shoots” in the industry that failed to materialize in 2024. “It has been sort of delayed shoots, if you will.”
This upswing in investment banking, coupled with increased trading, propelled Morgan Stanley’s net profit to $3.07 billion, a 41% rise from the previous year. Total net revenue climbed 12% to $15.02 billion, both figures surpassing analyst predictions.
Morgan Stanley’s stock saw a more than 3% rise in Tuesday morning trading. Since the start of January, the stock has risen nearly 13%, although it still trails behind some of its big-bank peers.
One challenge for Morgan Stanley is the underperformance of its wealth management business. Net new assets in this unit plummeted 59% year-over-year and 62% from the last quarter, totaling $36.4 billion. Revenues reached $6.79 billion, marking a 2% increase from a year ago but a 1.28% decline from the last quarter, both falling short of expectations.
“The firm delivered another strong quarter in an improving capital markets environment,” said Pick in a press release. “We continue to execute on our strategy and remain well positioned to deliver growth and long-term value for our shareholders.”
Despite the wealth management setback, Morgan Stanley’s robust performance in investment banking and trading highlights its pivotal role in the renewed vigor of Wall Street dealmaking.
You May Also Like:
