Strong wealth management and stock trading revenue drive Morgan Stanley's Q1 net profit to grow by 14% year-on-year, exceeding expectations | Financial Report News

Thanks to the generally better-than-expected revenue from its main divisions, Morgan Stanley's first-quarter performance far exceeded expectations.

Before the US stock market opened on Tuesday, April 16, Morgan Stanley (MS) released its first-quarter earnings report for the period ending March 31. The financial report showed that Morgan Stanley's first-quarter revenue was $15.14 billion, surpassing the expected $14.46 billion, a 4% year-on-year increase. First-quarter net profit increased by 14% year-on-year to $3.41 billion, with earnings per share of $2.02, exceeding analysts' expected $1.67 per share.

In addition, Morgan Stanley also announced a quarterly dividend of $0.85 per share.

CEO Ted Pick praised the company's outstanding performance, attributing it to significant growth in client assets in the wealth and investment management business. The bank's assets under management have now reached $7 trillion.

After the financial report was released, Morgan Stanley's stock price rose by as much as 4% in pre-market trading and increased by over 2% after the market opened.

Revenue Growth in Main Divisions, Investment Banking Revenue Surges 16%

Specifically, Morgan Stanley's institutional securities division saw a 16% year-on-year increase in revenue to $7.016 billion in the first quarter; wealth management revenue reached $6.88 billion, a 5% increase from the previous year; investment management revenue increased by 6% year-on-year to $1.377 billion.

In detail, FICC business (fixed income, currencies, and commodities) sales and trading revenue were $2.49 billion, surpassing the expected $2.33 billion; investment banking revenue surged 16% year-on-year, with equity net revenue growing significantly by 4% and fixed income net revenue also increasing but down 4% year-on-year. Net interest income declined slightly due to changes in the deposit structure.

The report stated that the growth in equity revenue was mainly attributed to "robust growth across business lines and geographies, as well as strong performance in derivatives in a constructive market environment," while the decline in fixed income business was mainly due to reduced macroeconomic and credit client activities. However, the report mentioned that the increase in commodities revenue offset some of the impact.

Furthermore, Morgan Stanley achieved a tangible common equity return on tangible common equity (ROTCE) of 19.7% in the first quarter, driving the company's asset management revenue to a record high. CEO Ted Pick stated in the financial report: Due to strong net asset growth, the company's client assets in the wealth and investment management field have reached $7 trillion. Institutional securities have also recognized the strength of the entire market and underwriting business. Morgan Stanley's integrated corporate model is demonstrating lasting influence