Morgan Stanley rides buying and selling desk to sturdy third quarter

Daniel Fowler
October 18, 2020

The investment bank posted revenue of $12.23 billion in the period.

Morgan Stanley's revenue and profit both beat analysts' overall forecasts.

Morgan Stanley eased past Wall Street estimates for profit on Thursday, wrapping up mixed third-quarter earnings for big USA banks that saw those focused on trading clocking big gains while retail banks took a hit from the pandemic.

However whereas Morgan Stanley's general outcomes had been sturdy, they weren't as potent as Goldman Sachs' third quarter outcomes on Wednesday, and Morgan Stanley's inventory worth seems to be paying a worth for the comparability with shares up exclusively very barely in pre-market buying and selling. Fixed income trading was $1.92B, while equity was $2.26B.

The company's shares have fallen less than 1% since the start of the year, the best performance among the top six banks. But a surge in equity underwriting revenues helped spur growth in the segment, with Morgan Stanley benefiting from IPOs, follow-on offerings, and blocks as clients continued to access capital markets. Its trading operation - helping clients chop and change their portfolios - was responsible for the lion's share of the outperformance, bringing in nearly half a billion dollars more than expected. "They can be the chicken's way of playing financials because you don't have a big loan portfolio".

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Moody's Investors Service upgraded the bank's credit rating earlier this month, which would lower its borrowing costs and make its traders more competitive. "We clawed our way back", Chief Financial Officer Jonathan Pruzan said in an interview.

"I would expect us to be back doing buybacks in the first quarter", Mr. Gorman told analysts.

Banks' medium-term fortunes are tied to Washington, where a new round of stimulus has been held up by partisan jockeying ahead of the presidential election next month.

The firm set aside $111 million for loan losses, more than a year ago but about half of its provisions in the second quarter. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes.

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