(Reuters) – Morgan Stanley reported a higher quarterly profit than expected on Wednesday, thanks to strong investment banking and asset management.
Morgan Stanley shares, which complete the quarterly earnings season for large lenders, rose 2.5% to $ 46.29 in the pre-market market.
Asset management activities of the lender saw its best quarter in more than three years, revenues rose 8.9% to 4.15 billion.
The company, the bank has developed a reliable revenue stream, generates a pre-tax margin of 25 percent, according to the stated objective of CEO, James Gorman.
Investment bank revenues soared 25 percent. 100 to $ 1.53 billion, as an asset of the debt and securities market activities generated sales commission.
“Our second quarter results demonstrated the resilience of our franchise in a small business setting,” Gorman said.
Brokerage income was reduced to Morgan Stanley who worked to transform his bond trading business by appointing new members of management and cutting staff were modest compared to Goldman Sachs Inc. Archer Group, who declined 40% Of the income bond operations.
At Morgan Stanley, global business revenue declined by about 3 percent, while revenue bond operations declined 4.5 percent.
Commercial bonds struggled for major US banks this quarter, making it difficult to compare with the period last year when banks have dealt with the following wholesale volumes the vote for Britain to leave the European Union.
Morgan Stanley said brokerage, a company in which it is generally safe, grew from $ 2.1 trillion to $ 2.2 billion.
The bank’s 9.1% profitability index, a measure of profitability, was well within the target of 9% to 11%, Gorman wanted the bank to reach the end of 2017.
Morgan Stanley’s non-interest expense increased 6.8 percent to $ 6.86 billion, even as the bank aims to reduce spending by $ 1 billion by the end of this year.
Earnings applicable to common stockholders were $ 1.59 billion in the second quarter ended June 30, compared to $ 1.43 billion a year earlier. Earnings per share increased from 75 cents to 87 cents.
On average, analysts expected a profit of 76 cents per share, according to Thomson Reuters I / B / E / S.
Net sales increased 6.6% to $ 9.5 billion compared to the average estimate of 9.09 billion.
By the end of Tuesday, Morgan Stanley shares rose 6.8 percent this year, compared with a 4.2 percent increase in the KBW bank index.
Morgan Stanley, the sixth US bank by assets, ended the earnings season for major lenders.
Reports Sruthi Shankar Bangalore and Olivia Oran in New York; Editing by Saumyadeb Chakrabarty