Morgan Stanley beats estimates on higher trading revenue

Morgan Stanley’s profit was driven by gains in its fixed income and equities trading businesses. Above, the bank’s London headquarters at Canary Wharf. (Reuters)
Updated 18 July 2018

Morgan Stanley beats estimates on higher trading revenue

  • Morgan Stanley said net income rose to $2.4 billion in the quarter from $1.8 billion a year ago
  • Banks are benefiting from increased market volatility due in part to escalating trade tensions

NEW YORK: Morgan Stanley reported a better-than-expected quarterly profit on Wednesday, driven by gains in its fixed income and equities trading businesses, rounding up a strong earnings season for US banks.
JPMorgan Chase & Co, Bank of America Corp, Goldman Sachs Group Inc, Morgan Stanley and Citigroup Inc. have all reported second-quarter earnings which beat expectations, with only Wells Fargo & Co. missing estimates.
Banks are benefiting from increased market volatility due in part to escalating trade tensions causing investors to buy and sell assets to protect their portfolios and take advantage of opportunities. Morgan Stanley highlighted its equity financing business and a stronger performance in commodities and credit products.
Morgan Stanley said net income rose to $2.4 billion in the quarter from $1.8 billion a year ago. Earnings per share rose to $1.30 from $0.87 the year before, beating the average analyst expectation of $1.11 per share, according to Thomson Reuters I/B/E/S data.
Shares in Morgan Stanley were up 2.9 percent in premarket trading.
Chief Executive Officer James Gorman said the bank had seen strength across all its businesses and geographies.
“The second quarter performance reflected active markets and healthy client engagement,” he said in a statement.
Net revenue from the bank’s sales and trading business rose 18 percent to $3.8 billion, with fixed income and equity trading businesses recording gains of 12 percent and 15 percent.
Rival Goldman Sachs said on Tuesday its trading revenue rose 17 percent, with bond trading showing a 45 percent jump and equity revenue remaining flat in its second quarter.
Morgan Stanley’s net revenue rose 12 percent to $10.6 billion, with institutional securities accounting for 54 percent of the gains. Institutional securities business comprises the bank’s investment banking and trading units.
The bank said net revenue at its wealth management business rose to $4.3 billion from $4.2 billion a year ago.


IMF experts visit Lebanon amid worsening economic crisis

Updated 20 February 2020

IMF experts visit Lebanon amid worsening economic crisis

  • IMF team will provide broad technical advice
  • Lebanon has not requested IMF financial assistance

BEIRUT: A team of IMF experts met Prime Minister Hassan Diab on Thursday at the start of a visit to provide Lebanon with advice on tackling a deepening financial and economic crisis, an official Lebanese source said.

The IMF has said the team will visit until Feb. 23 and provide broad technical advice. Lebanon has not requested financial assistance from the Fund.

The long-brewing economic crisis spiraled last year as capital flows into the country slowed and protests erupted against the ruling elite over decades of corruption and bad governance.

Diab’s government, which took office last month, must decide what to do about upcoming debt payments, notably a $1.2 billion dollar-denominated sovereign bond due on March 9.

Lebanese President Michel Aoun meanwhile said on Thursday measures would be taken to hold to account all those who contributed to Lebanon’s financial crisis through illegal actions be they transfers abroad, manipulation of Eurobonds or other acts.

“There is information that we are still in need of with regards to the banking situation. There are measures that we will take to hold to account all who participated in bringing the crisis to where it is,” Aoun said, according to his Twitter account.

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One of Lebanon’s most influential politicians, Parliament Speaker Nabih Berri, said on Wednesday that debt restructuring was the best solution for looming maturities.

Lebanon will on Friday review proposals from firms bidding to give it financial and legal advice on its options, a source familiar with the matter said on Thursday. The government aims to take a quick decision on who to appoint, the source said.

So far, firms bidding to be Lebanon’s legal adviser are Dechert, Cleary Gottlieb, and White and Case, the source said.

Lebanon has issued requests for proposals to seven firms to provide it with financial advice.

The government on Wednesday formed a committee tasked with preparing an economic recovery plan that includes ministers, government officials, a central bank representative and economists, according to a copy of a decree seen by Reuters.