An investment banking surge at Morgan Stanley (MS) solidified a dealmaking revival across Wall Street, but the company’s wealth management unit fell short of analyst expectations.
Fees from investment banking jumped 51% from a year ago, the second-largest leap among big banks after Citigroup (C).
Investment banking fees also jumped at JPMorgan Chase (JPM), Wells Fargo (WFC), Goldman Sachs (GS) and Bank of America (BAC) as dealmaking showed new signs of life following a two-year drought.
When asked Tuesday about the investment banking rebound, Morgan Stanley CEO Ted Pick told analysts “a number of folks have been calling for this.”
He referenced earlier industry talk of so-called “green shoots” that failed to show up after some false starts in 2023.
“It has been sort of a delayed shoots, if you will,” he said.
The pick up in investment banking and an increase in trading helped Morgan Stanley push its net profit up by 41% from a year earlier, to $3.07 billion. Its total net revenue of $15.02 rose 12%.
Both figures exceeded what analysts expected.
The stock was up more than 2% in Tuesday morning trading. As of late Monday, the stock was up nearly 13% since the beginning of January, trailing some of its other big-bank rivals.
One challenge that emerged Tuesday was Morgan Stanley’s recent performance in wealth management, the business of providing financial advice to higher net-worth individuals.
Net new assets in that division fell 59% from a year ago and 62% from the last quarter, to $36.4 billion. Revenues were $6.79 billion, which was a 2% increase from a year ago but a 1.28% decrease from the last quarter.
Both measures were weaker than analysts expected.
“The firm delivered another strong quarter in an improving capital markets environment,” Pick said in a press release.
“We continue to execute on our strategy and remain well positioned to deliver growth and long-term value for our shareholders.”
David Hollerith is a senior reporter for Yahoo Finance covering banking, crypto, and other areas in finance.
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