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Morgan Stanley Tops Profit Forecasts on Record Wealth Management

"Wealth and Investment Management businesses attracted $120 billion in flows and Institutional Securities generated over $7 billion in revenues," said CEO James Gorman.

Morgan Stanley  (MS) - Get Report posted stronger-than-expected second quarter earnings Thursday thanks to impressive gains investment banking and wealth management revenues. 

Morgan Stanley said earnings for the three months ending in March came in at $1.85 per share, down 5.6% from the same period last year and firmly ahead of the Street consensus forecast of $1.65 per share. Group revenues, Morgan Stanley said, rose 10.4% to $14.8 billion, again topping analysts' forecasts of a $14 billion tally. 

Wealth management inflows surged to a record $120 billion over the quarter, the bank said, taking in $6.1 billion in revenues, a 30% increase from last year.

“The Firm delivered another very strong quarter, with contributions from all of our businesses. Our Wealth and Investment Management businesses attracted $120 billion in flows and Institutional Securities generated over $7 billion in revenues," said CEO James Gorman. "With our transformed business model providing more stable and durable earnings, we have doubled our dividend and announced a $12 billion buyback as we move to return our excess capital to shareholders."

"Our global franchise is very well positioned to drive further growth,” he added.  

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Morgan Stanley shares were marked 1.25% lower in pre-market trading immediately following the earnings release to indicate an opening bell price of $91.30 each, a move that would still leave the stock with a year-to-date gain of around 33.2%.

Earlier this week, JPMorgan Chase  (JPM) - Get Report posted a 37% increase in investment banking revenues that helped offset an 8% slump in net interest income.

JPMorgan said earnings for the three months ending in June were pegged at $3.78 per share, up 174% from the same period last year and well ahead of the Street consensus forecast of $3.18 per share.

Goldman Sachs Group  (GS) - Get Report also used a 36% surge in investment banking revenues, alongside a topline gain in asset management, to post stronger-than-expected earnings of $15.02 per share Tuesday, nearly 140% higher than last year's tally and firmly ahead of the Street consensus forecast of $10.24 per share.

Bank of America  (BAC) - Get Report said profit for the three months ended in June were tabbed at $1.03 per share, up 178% from the same period last year and firmly ahead of the Street consensus forecast of 77 cents per share. 

Bank of America also released $2.2 billion in loan loss reserves which boosted its bottom line, and added benefits from a tax change in the United Kingdom.