Morgan Stanley's Investment Banking Surge Outshines Wealth Management Slump

Morgan Stanley's second-quarter profit exceeded expectations thanks to a significant rise in investment banking, despite slower growth in wealth management. The bank experienced a notable increase in revenue from institutional securities and investment banking activities. Meanwhile, wealth management showed a modest rise, with total quarterly revenue and net income surpassing Wall Street projections.

Morgan Stanley's second-quarter profits surpassed expectations, driven primarily by a marked surge in investment banking activities, although this was balanced by muted growth in wealth management. Shares in the bank rose 1.4% in morning trading, reversing premarket trends.

Revenue from wealth management saw a slight increase of 2% in the second quarter, a significant slowdown compared to the 16% growth seen a year earlier. Despite this, institutional securities revenue grew substantially by 23% to $7 billion, with investment banking revenue soaring by 51%.

Chief Financial Officer Sharon Yeshaya noted that investment banking is in the 'early innings of recovery,' with vibrant pipelines and active market dialogs. The bank's net income rose to $3.1 billion, or $1.82 per share, outperforming the average analyst expectation of $1.65. Overall quarterly revenue hit $15.02 billion, significantly beating Wall Street predictions.

(With inputs from agencies.)