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Morgan Stanley's income soars to $1.86bn

New York, July 18, 2014

Morgan Stanley's second-quarter income more than doubled, helped by rising revenue in its retail brokerage business as it won more assets to manage from clients without adding brokers, the investment bank said yesterday.
 
Overall, net income for shareholders rose to $1.86 billion, or 94 cents per share, in the second quarter from $803 million, or 41 cents per share, in the same quarter last year, said a report in the Gulf Daily News (GDN), our sister publication.
 
According to figures calculated by Thomson Reuters, the company earned 60 cents per share, beating the average analyst estimate of 55 cents. One-time gains from a tax break and the ending of a joint venture with Citigroup in wealth management gave the bank its biggest income gains for the quarter.
 
But, even excluding those items, the bank posted better results in businesses, including merger advisory, stock and bond underwriting and investment management. The bank's results beat average forecasts, and its shares edged up 0.3 per cent to $32.60.
 
Morgan Stanley has been reshaping its business after coming uncomfortably close to failing during the financial crisis. The second-largest stand-alone investment bank after Goldman Sachs Group, a powerhouse in areas like bond trading and commodities trading, has been increasing its reliance on its retail brokerage and investment management businesses.
 
These businesses tend to generate more stable earnings and are less likely to unravel during market calamities. Investment management and retail brokerage would typically account for about 30 or 40 per cent of the bank's revenue a quarter in 2007, but in the second quarter of 2014 accounted for more than 50 per cent.
 
In the second quarter, retail clients' assets rose $59 billion to $2 trillion, due in part to clients bringing money to the bank. Morgan Stanley managed to win those assets without expanding its broker force - the bank had 16,316 financial advisers at the end of June compared with 16,321 in the same quarter last year. - TradeArabia News Service



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