third quarter profit increased 36% year over year, driven by unprecedented revenue from mergers and acquisitions advice.
The New York bank reported profit of $ 3.71 billion, or $ 1.98 per share. This topped the $ 1.69 expected by analysts polled by FactSet. Revenue increased 26% to $ 14.75 billion. This exceeded the expected $ 13.93 billion.
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Morgan Stanley enjoyed another quarter of merger madness. Firms confident in their economic prospects took advantage of the summer to acquire competitors or try their luck in the public market.
Investment banking fees jumped 67% to $ 2.85 billion, a new quarterly record. Revenue from transaction advice more than tripled to a record $ 1.27 billion. The costs of organizing initial public and stock offerings rose 16% to $ 1.01 billion.
High merger activity from all ends of the bank’s global footprint has led to the boom in transactions, Morgan Stanley CFO Sharon Yeshaya said in an interview. The request for the agreement came from a diverse set of companies, Ms. Yeshaya said.
“We are seeing an enlargement both geographically and sectorally, so all signs are sound in terms of what is happening in this market,” Ms. Yeshaya said.
Morgan Stanley said the number of open transactions remains high and that it expects activity in its investment banking business to continue.
Trading revenues increased 6% to $ 4.52 billion. JPMorgan Chase & Co. said on Wednesday that its third-quarter trading revenue fell 5%.
Morgan Stanley’s wealth management division, which includes E * Trade, increased 28% to $ 5.94 billion. In the investment management division, sales increased 38%.
Morgan Stanley shares closed at $ 98.57 on Wednesday. They increased slightly in Thursday morning trading. The bank’s shares have risen 44% this year, hitting an all-time high of $ 105.45 in August.
Morgan Stanley’s merchant customer count was 7.4 million, in line with the previous quarter. The average daily number of retail businesses the company handled for the quarter was approaching one million, but was down 8% from the second quarter.
Operating expenses increased 21% to $ 9.9 billion.
Morgan Stanley increased its loans by 19% to $ 325 billion in outstanding amounts.
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