Morgan Stanley net profits surge 150% in Q1

The headquarters of Morgan Stanley, a financial services corporation, in Midtown Manhattan. © Bigapplestock | Megapixl.com

Summary

  • Lower mark to market losses on corporate loans led to record net revenues and Morgan Stanley's net income in1Q.
  • Pre-tax income reached US$ 3.4 billion versus US$ 950 million last year.
  • Quarter results also highlight a loss of US$ 911 million tied to Archegos.

The American Banking major Morgan Stanley (NYSE:MS) has reported a blockbuster quarterly performance, with its net profit surging by 150% in the first quarter on the back of a global deal-making boom.

The bank reported net income attributable to common shareholders at US$3.98 billion in the quarter ended 31 March 2021, up 150.4% from US$1.59 billion from the corresponding quarter last year.

The surge in the revenues drove the growth in the net income. The top line of the company surged 60.7% to US$ 15.72 billion, from US$ 9.78 billion a year ago.

The global deal-making boom drove the surge in the revenues, as the investment banking vertical of the Wall Street powerhouse 123% to US$ 2.84 billion, from US$ 1.27 billion.

The revenues from institutional securities business surged by 65.6% to US$ 8.56 billion, on the back of Reddit-fueled trading rally in "meme" stocks like GameStop Corp (NYSE:GME).

The bank also announced US$ 0.35 as a quarterly dividend per share for the common stockholders. The record date for the dividend, which would be payable on 14 May 2021, has been set on 30 April 2021, said in the earnings release.

Earnings per share (EPS) of the bank stood at US$ 2.19 per share, 29% more than US$1.7 that analysts were expecting.

Even as the results exceeded the expectations of the analysts on the street, the bank has reported US$ 911 one-time losses arising from meltdown at "a single prime brokerage client."

The company said that the losses in the quarter include US$644 million due to a hit coming from a single prime brokerage client and a follow-up trading loss of US$267 million related to the same hit.

Morgan Stanley is trading at US$ 80.38, down by 0.54%, on 16 April 2021 (GMT 10:24 am)


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