Morgan Stanley Beats Estimates for Third-Quarter Earnings
Oct 23, 2024
Morgan Stanley shares surged Wednesday after the bank reported better-than-expected results for the third quarter, adding to the momentum seen across the financial sector. The bank’s revenue, net interest income, and profits all posted solid year-over-year growth, fueled by strong performances in investment banking and wealth management.
Impressive Financial Results For the quarter, Morgan Stanley reported $15.38 billion in revenue—up from $13.27 billion last year and well ahead of analysts’ expectations. This marked a significant beat, with projections sitting just over $14.3 billion, according to Visible Alpha. Net interest income (NII) also rose to $2.2 billion, compared to $1.98 billion in the same period last year.
Profits came in well above estimates too, with the bank posting $3.2 billion in net income, a major increase from $2.44 billion last year.
Following the announcement, Morgan Stanley’s stock jumped more than 8% in early trading, pushing the stock up roughly 30% for the year. The broader KBW Nasdaq Bank Index (BKX) rose by over 2%.
Investment Banking and Wealth Management Lead the Way Morgan Stanley’s results mirrored some of the success seen by other big players like JPMorgan Chase, Wells Fargo, Citigroup, and Goldman Sachs, especially in investment banking and wealth management. These two areas were key drivers of the bank’s strong quarter.
A Different Approach to Credit Loss Provisions One area where Morgan Stanley stood apart from its rivals was its approach to credit loss provisions. While banks like JPMorgan Chase and Citigroup set aside large sums—sometimes in the billions—to cover potential credit losses due to their heavier focus on consumer lending, Morgan Stanley reduced its provision for credit losses to just $79 million.
This decision highlights the bank’s more cautious approach, focusing less on consumer lending and more on investment banking and wealth management, which helped boost its overall performance this quarter.
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