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October 19, 2016 at 10:52 AM
Morgan Stanley (MS) said its third-quarter profits soared 62% to $1.5 billion, or $0.81 a share, vs. $939,000, or $0.48 per share, a year ago. Revenues grew 15% to $8.9 billion, up from $7.8 billion in the year-ago period. Results beat analysts’ estimates.
“We had a better quarter. What I’m pleased about is we did it with 25% less people,” said CEO James Gorman during a call with equity analysts.
While fixed-income trading revenue was $1.5 billion, equity trading expanded to $1.9 billion.
“Fixed income was quite strong this quarter. It was a better trading environment for us, particularly given our skew toward credit,” CFO Jonathan Pruzan said in an interview with Bloomberg.
Compensation expense of $4.1 billion topped last year’s $3.4 billion, but non-compensation expenses fell to $2.4 billion from $2.9 billion.
Institutional Securities reported net revenues of $4.6 billion, up 17% from last year, on strong net income of $1.4 billion—a jump of 101% from the year-ago quarter.
Wealth Management
Wealth Management net revenues in Q3 were $3.9 billion, up 7% from last year and 2% from the prior quarter.
After-tax net income for the unit was $564 million, representing an 11% year-over-year improvement as well as a 9% quarter-over-quarter increase.
Pre-tax profits were $901 million, giving the unit a pre-tax margin of 23% — the strongest performance since Morgan Stanley Smith Barney formed seven years ago, according to the company.
