Morgan Stanley Beats on Record Investment, Asset Management Gains

By M. Corey Goldman

Morgan Stanley  (MS Get Morgan Stanley (MS) Report on Thursday posted stronger-than-expected third-quarter earnings thanks to record performances in the bank's investment banking and assert management groups.

Morgan Stanley said it earned $3.7 billion in the third quarter, or $1.98 a share, vs. $2.7 billion, or $1.66 a share in the same period a year ago. Analysts polled by FactSet had been expecting earnings of $1.69 a share. 

Revenue rose 25% to $14.8 billion thanks in part to a solid performance in the bank's core wealth management business. Analysts had been looking for total revenue in the range of $13.9 billion.

Wealth management revenue rose to $5.9 billion, which included adding record net new assets of $135 billion, amounting to a year-to-date 10% annualized growth rate. Investment management revenue, meantime, came in at $1.45 billion, reflecting an increase in fee-based asset management revenue on AUM of $1.5 trillion.

Institutional securities revenue came in at $7.5 billion vs. $6.1 billion a year ago. Provisions for credit losses fell to $24 million from $111 million.

“We had standout performance of our integrated investment bank and record net new assets of $135 billion in wealth management," Chairman and CEO James Gorman said in a statement, noting that the successful integrations of E*TRADE and Eaton Vance "...have supported growth of $400 billion in net new client assets across wealth and investment management, bringing our total combined client assets to $6.2 trillion.”

At last check, shares of Morgan Stanley were up 1.56% at $100.11 in premarket trading.

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