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Morgan Stanley Blasts Profit Forecasts on Record Wealth Management Gains

Record wealth management inflows and surging investment bank revenues drove stronger-than-expected first quarter earnings for Morgan Stanley Friday.

Morgan Stanley  (MS) - Get Morgan Stanley Report posted much stronger-than-expected first quarter earnings Friday on the strength of record wealth management inflows and surging investment banking revenues. 

Morgan Stanley said earnings for the three months ending in March came in at $2.19 per share, up 116% from the same period last year and firmly ahead of the Street consensus forecast of $1.70 per share. Group revenues, Morgan Stanley said, rose 65% to $15.7 billion, again topping analysts' forecasts of a $14.1 billion tally.

Wealth management inflows surged to a record $105 billion over the quarter, the bank said, taking in $6 billion in revenues, a 46.3% increase from last year.

“The Firm delivered record results," said CEO James Gorman. "The integrated Investment Bank continues to thrive. We closed the acquisition of Eaton Vance which takes Investment Management to over $1.4 trillion of assets. Wealth Management brought in record flows (and) the Firm is very well positioned for growth in the years ahead.”  

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Morgan Stanley shares were marked 3% lower in mid-day trading Friday to change hands at $78.45 each, a move that trims the stock's year-to-date gain to around 15%.

Trading revenues for the quarter surged 50% from last year to $4.225 billion, with equity revenues rising 17%  to $2.875 billion. Investment banking revenues more than doubled to $2.84 billion, the bank said.

Morgan Stanley rounds out a series of first quarter updates from the country's biggest banks this week, many of which were boosted by the release of provisions that were set-aside last year to cover bad loan risks during the peak of the coronavirus pandemic.

JPMorgan  (JPM) - Get JP Morgan Chase & Co. Report added $1.19 to its Street-beating bottom line of $4.50 per share with the release of $5.2 billion in reserves, while Bank of America  (BAC) - Get Bank of America Corporation Report released $2.7 billion. Goldman Sachs  (GS) - Get Goldman Sachs Group Inc. (The) Reportrode the best global markets revenue in ten years to a stronger-than-expected first quarter profit of $18.60 per share. 

Citigroup  (C) - Get Citigroup Inc. Report released $3.85 billion in loan loss reserves as part of a much stronger-than-expected first quarter earnings report that included $7.94 billion in profits and an announced pullback in some of its international operations.