Morgan Stanley Reports Robust Q2 Revenue, Earnings Growth

The results were driven by increased market volatility due to tensions over a potential trade war.

Morgan Stanley has published its second quarter 2018 financial results today, which showed a robust growth in revenue and earnings. The results, which came in well above market expectations, rounded up a strong financial season for US banks.

The positive results were driven by the bank’s fixed income and equities trading businesses. According to the report, profit surged by 39% year-on-year to reach $2.44 billion in the second quarter of 2018. This figure exceeded the $2 billion estimate from analysts surveyed by Thomson Reuters.

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In addition, the results from the New York-based bank showed that net revenues for the second quarter of 2018 were $10.6 billion. This is an increase of 10% when compared to $9.5 billion in Q2 of 2017.

Earning per share rose to $1.30, this is an increase from the second quarter of 2017, which reported a profit of $1.8 billion, or $0.87 per diluted share. After the bank published its results, shares climbed by more than 3% in pre-market trading in New York.

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Rounding up a strong financial quarter for US banks

Morgan Stanley is the latest US bank to release its second-quarter earnings. The bank joins JPMorgan Chase & Co, Bank of America Corp, Goldman Sachs Group Inc and Citigroup Inc, who have all reported better than expected results. Wells Fargo & Co was the only bank to come in below market estimates.

The strong performance is largely due to increased market volatility, which is mostly a result of escalating trade tensions. This can be seen in Morgan Stanley’s report which highlighted its equity financing business and a stronger performance in commodities and credit products.

James Gorman
Source: LinkedIn

Commenting on the results, James P. Gorman, Chairman and Chief Executive Officer, said: “we reported robust revenue and earnings growth this quarter with strength across all businesses and geographies.

“The second quarter performance reflected active markets and healthy client engagement. Our strong global franchise positions us well to continue to grow organically across each of our businesses and to deliver operating leverage.”

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