Morgan Stanley profit soars on wealth management, trading

Thu Apr 17, 2014 9:16am EDT
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By Lauren Tara LaCapra and Anil D'Silva

(Reuters) - Morgan Stanley reported a 55 percent jump in first-quarter earnings as higher revenue from its institutional securities business augmented another strong quarter from wealth management, sending shares in the Wall Street bank higher.

The sixth-largest U.S. bank by assets reported net income applicable to the company of $1.45 billion, or 74 cents per share, compared with $936 million, or 48 cents per share, a year earlier.

Morgan Stanley's shares rose 2.8 percent to $30.74 in pre-market trading on Thursday.

Although volumes were lower across most fixed-income businesses, Morgan Stanley said revenue from fixed-income and commodities sales and trading rose to $1.7 billion, a 13 percent increase from a year earlier.

Chief Financial Officer Ruth Porat attributed this growth to "commodities, credit and mortgage".

The increase in fixed-income and commodities sales and trading revenue contrasted with declines in the equivalent units of JPMorgan Chase & Co, Citigroup Inc and Bank of America Corp, which reported results this week and last.

Goldman Sachs Group Inc, which has more exposure to fixed-income trading than its peers, reported an 11 percent drop in first-quarter profit, though it beat market estimates.

The fixed-income trading business across Wall Street has been hurt by new capital rules, a reduction in risk-taking by clients and by changes to the way derivatives are traded.   Continued...

The corporate logo of financial firm Morgan Stanley is pictured on a building in San Diego, California September 24, 2013. REUTERS/Mike Blake