Another beneficiary of the US stock market bull market, Morgan Stanley's Q3 performance shines, with trading business driving profits to exceed expectations

Intelligent Financial APP noticed that Morgan Stanley (MS.US), like other Wall Street competitors, outperformed market expectations in trading business, driving a significant increase in the bank's third-quarter profit. The financial report shows that Morgan Stanley's Q3 revenue was $15.38 billion, a year-on-year increase of 15.9%, exceeding market expectations; earnings per share were $1.88, higher than the market's expected $1.58.

Morgan Stanley's net interest income in the third quarter was $2.2 billion, surpassing the expected $1.94 billion, an increase from the previous quarter's $2.07 billion and the same period last year's $1.98 billion.

Credit loss provisions were $79 million, compared to $76 million in the second quarter and $134 million in the same period last year.

Morgan Stanley stated that trading revenue grew by 13% in the third quarter. Previously, due to market-driven trading growth across the industry, its largest competitors also saw growth. Morgan Stanley CEO Ted Pick said, "Institutional securities saw strong momentum in market and underwriting business with high client engagement. With active stock markets and inflows of net assets, total client assets in wealth and investment management departments have exceeded $7.5 trillion."

The wealth management department generated $7.27 billion in revenue, higher than analysts' expectations, with net new assets reaching $64 billion.

Morgan Stanley's fixed income trading revenue was $2 billion, exceeding the expected $1.85 billion. This business line is the smallest among the five major trading departments on Wall Street.

Equity trading revenue totaled $3.05 billion. Stock income helped the bank offset the slowdown in fixed income business. Competitors like JPMorgan saw a 27% increase in stock income, while Goldman Sachs and Bank of America both saw an 18% increase.

Morgan Stanley's advisory fees totaled $546 million, exceeding the expected $525 million. Stock underwriting revenue was $362 million, as speculation about the full reopening of these markets was triggered by public listings and secondary offerings.

Morgan Stanley currently manages $7.6 trillion in assets in its investment management and wealth departments. Earlier this year, senior management at the bank took a more cautious stance on the bank's ability to achieve profit targets in the near term, causing the bank's stock price to lag behind peers. With future interest rate cuts in the coming months, investors will also focus on indicators such as net interest income.

Since then, the company's performance has been contrary to these more cautious forecasts.

The CEO of Morgan Stanley stated that the investment banking business is at the peak of a multi-year cycle, and with fee rebounds, this will be a boon for companies like his. The bank also assured the market that as it progresses towards its goal of managing $10 trillion in total company assets, the profitability of its vast wealth business will increase significantly