Morgan Stanley has maintained its position as one of the largest banks in the United States with influence spread all over the world.
US multinational banking giant Morgan Stanley (NYSE:MS) released its performance and revenue report for the first quarter of this fiscal year, showing a result below analysts’ expectations. Based on the company’s report, its revenue was $14.52 billion versus the $13.92 billion estimate by Refinitiv analysts.
In addition, the company said its earnings per share (EPS) was pegged at $1.70 versus Wall Street’s forecast of $1.62.
Based on the report released, Morgan Stanley in particular was tough in the first quarter despite the Federal Reserve keeping up with its hawkish stance on rate hikes. Because the company posted a significant decline in its revenue, its expenses for the quarter hit an entirely new base.
Morgan Stanley said its expenditure on revenue jumped 4% to $10.52 billion. The company’s expenses increased due to compensation costs that exceeded expectations. According to an estimate from StreetAccount, Morgan Stanley’s expenses should have been $430 million less than what was ultimately reported.
While Morgan Stanley’s outlook has been poor, the company continues to print significant growth milestones in its wealth management and investment core business strengths.
“The investments we made in our wealth management business continue to pay off as we added $110 billion in net new assets this quarter,” said James Gorman, CEO of Morgan Stanley. He said in the earnings statement. “Equity and fixed income returns were strong, although investment banking continued to be constrained.”
Gorman has transformed the company into a leader in the wealth management ecosystem. The company’s recent acquisitions have helped it maintain a good façade as it looks to improve its bad luck across the board.
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The Wealth Management division recorded $6.56 billion, up 11% over the same period last year. While that number is consistent with StreetAccount’s estimates, the bank has notably turned its fortunes around in this segment with the interest rate hike set by the Federal Reserve.
Besides wealth management, Morgan Stanley also recorded a significant jump based on the activities of fixed-income traders. These merchants generated total revenue of $2.58 billion, surpassing StreetAccount’s estimate of $2.33 billion. Stocks also posted a better-than-expected jump with the figures coming in at $2.73 billion instead of the expected $2.65 billion.
Morgan Stanley has maintained its position as one of the largest banks in the United States with influence spread all over the world. Despite the recent regional banking crisis that shook the financial industry in the first quarter, Morgan Stanley did not feel any harm to its business in any way.
Gorman said, “From my point of view, we are not in a banking crisis, but we have suffered and may still be facing a crisis between some banks.” “I consider that the situation cannot be remotely compared to 2008.”
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