Morgan Stanley trading, wealth management units beat expectations in Q1
Morgan Stanley’s traders delivered first-quarter revenue that exceeded expectations as its wealth management juggernaut also got back on track — both handing a key win for its new leader Ted Pick.
Revenue from the trading business came in at $5.33 billion, cruising past analyst estimates and following theblowout earnings from Goldman Sachs Group Inc. traders.
The wealth unit generated $6.88 billion in revenue, higher than analysts’ expectations. Net new assets in the division, a key metric tracked by Morgan Stanley watchers, were $95 billion, higher than the previous two quarters combined and in excess of what the bank needs to meet the target it has sought to grow the business.
Pick, who took the helm in January, is confronting the challenge of convincing investors he can advance the growth pace set by his predecessor, revive fortunes at the investment bank he oversaw and accelerate the expansion of its wealth management behemoth. While the money management business has grown steadily, executives are eager to capitalize on a reopening of capital markets that could spell more deals, trades and capital-raising business.
The bank’s stock has been the worst performer among the biggest US banks so far this year after outpacing rivals through much of the previous decade. Earnings for the quarter totaled $3.4 billion on $15.1 billion in revenue.
“As a result of strong net new asset growth, the firm has reached $7 trillion of client assets across wealth and investment management,” Pick said in a statement.
The bank’s shares were up about 2.7% to $89.35 at 7:52 a.m. in early New York trading. Morgan Stanley’s stock is down 6.7% so far this year, bucking gains across the banking sector, especially among its biggest peers.
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