Net income rose to $3.1 billion, or $1.82 per share, in the three months ended June 30, from $2.2 billion, or $1.24 per share, a year earlier. Analysts on average had expected $1.65, according to LSEG.
Morgan Stanley said it would raise its quarterly dividend to $0.925 per share, up 7.5 cents. Dividend payments were the bank’s highest-priority use of capital, Pick said.
Analysts were generally upbeat on the results, although some underscored weaker growth in wealth.
“Morgan Stanley’s strong Q2 results were primarily driven by an industry-wide rebound in investment banking activity, while wealth and asset management remained steady contributors on the back of a robust equities market,” said Mike Taiano, senior analyst at Moody’s Ratings.
The earnings were a “tale of two segments,” with impressive results in institutional securities offset by a mixed performance in wealth, UBS analyst Brennan Hawken wrote.
WEALTH MANAGEMENT SLOWS
Wealth management flourished under Morgan Stanley’s former CEO James Gorman, generating stable revenue from fees when markets were volatile. He set a target of managing $10 trillion in client assets, which stood at $7.2 trillion in the second quarter.
Morgan Stanley executives told analysts the wealth unit is growing within the bank’s expected range of 5% to 7% annually, even as net asset inflows slowed.
While the bank is not considering acquisitions in the short term, it could consider opportunities in two to four years, Pick said.
Source from Reuters: https://www.reuters.com/business/finance/morgan-stanleys-profit-jumps-investment-banking-recovers-2024-07-16/