Morgan Stanley posted a remarkable 32% jump in third-quarter profit, propelled by a robust rebound in dealmaking activities that has lifted the entire banking sector. The Wall Street giant reported a profit of $3.19 billion, or $1.88 per share, for the quarter ending September 30, up from $2.41 billion, or $1.38 per share, a year ago. This surge sent Morgan Stanley’s shares up by 3% in pre-market trading as investors cheered the bank’s strong performance.
Driving this impressive gain was a revival across corporate debt issuance, IPOs, and mergers, which are finally picking up steam after two years of sluggish activity. CEO Ted Pick praised the firm’s performance, noting, “The firm reported a strong third quarter in a constructive environment across our global footprint,” hinting at continued optimism for future dealmaking as markets sit near record highs and the Federal Reserve eases its policy stance.
Investment banking revenue for Morgan Stanley shot up by 56% in the third quarter alone, while its competitors, such as Goldman Sachs and JPMorgan Chase, also saw significant jumps in fees at 20% and 31%, respectively. Globally, investment banking revenue increased by 21% in the first nine months of the year, led by North America, where revenue grew by 31%, according to Dealogic data. Morgan Stanley itself ranked fourth in global fees, thanks to high-profile IPOs like Lineage and StandardAero.
Morgan Stanley’s focus on wealth management, a strategy introduced under former CEO James Gorman to create a steadier revenue base, continues to pay off. Wealth management revenue rose to $7.27 billion from $6.4 billion last year, while the bank’s institutional securities unit—which houses investment banking and trading—also showed strong growth, reporting $6.82 billion in revenue.
With the investment banking sector regaining momentum, Morgan Stanley appears poised for continued growth, underscoring the resilience and adaptability of the firm amid shifting market conditions.
