Morgan Stanley shares climb after posting better-than-expected results in the first quarter

(qlmbusinessnews.com via cityam.com – – Fri, 19th April 2019) London, Uk – –

Morgan Stanley shares have climbed after the US bank posted better-than-expected results in its fixed income trading and wealth management divisions.

The bank reported $2.43bn profit in the first quarter of the year, beating expectations despite falling from $2.67bn the previous year.

Fixed income revenue of $1.71bn – nine per cent down on the same period in 2018 – beat analysts’ estimates by $200m, driven by gains in credit risk management, the bank said.

Its wealth management division, which accounts for around half of the bank’s annual revenue, saw revenues rise slightly to $4.39bn.

Investors were buoyed by the results as shares jumped 2.5 per cent to seven-month highs.

Investment banking revenue fell 24 per cent to $1.15bn on lower advisory fees from M&A and stock underwriting.

In the fourth quarter of last year Morgan Stanley’s fixed income trading suffered the sharpest fall among its peers, with revenue dropping 30 per cent year-on-year to $564m.

But in the first three months of this year its bond trading revenue suffered a smaller drop than rival Goldman Sachs, which fell 11 per cent.

Total revenue of $10.3bn also beat analysts’ expectations of $9.94bn but was seven per cent down on record quarterly results a year ago.

Chief executive James Gorman said: “We delivered solid earnings despite a slow start to the year following the turbulent markets in the fourth quarter.”

He added: “Even though risks to the global environment remain, markets have recovered and we are well positioned to serve our clients and invest in our businesses.”

Evercore ISI analyst Glenn Schorr said: “Wealth management was able to protect the margin in a tougher backdrop.”

He added that the performance “should make people more optimistic considering the lift in markets and better underwriting environment lately.”

By Callum Keown