Morgan Stanley and Bank of America Post Strong Third-Quarter Results, Surpassing Analyst Estimates

Morgan Stanley (NYSE: MS) and Bank of America Corporation (NYSE: BAC) both reported third-quarter results that exceeded analyst forecasts, driven by surging trading activity and a sharp rebound in investment-banking revenue.

Morgan Stanley reported total revenue of $18.2 billion, well above the $16.6 billion average analyst estimate. The firm’s stock-trading unit delivered a standout performance, with equity-trading revenue rising 35% year-over-year to $4.12 billion, topping both internal projections and Goldman Sachs’ $3.74 billion in equity-trading revenue for the quarter. Fixed-income trading revenue increased 8% from a year earlier, bringing total trading revenue to $6.29 billion, well above the $5.5 billion analysts expected.

Investment-banking fees rose 44%, outpacing forecasts, while the firm’s wealth management division recorded $8.2 billion in revenue and added $81 billion in new client assets. The division achieved a 30% pretax margin, exceeding internal targets.“Our capital-markets flywheel is taking hold as the administration seeks to execute on its three-pronged strategy to reshape the economy,” said CEO Ted Pick in a statement. Shares of Morgan Stanley rose 6.8% to $165.94, marking the firm’s largest intraday gain since April.

Bank of America also reported results above expectations, supported by strong investment-banking and trading revenue. The bank posted earnings per share of $1.06, exceeding analyst estimates of $0.95, and revenue of $28.24 billion, compared with expectations of $27.5 billion, according to LSEG.

Net income rose 23% from a year earlier to $8.5 billion, while total revenue increased 10.8% year-over-year. Investment-banking fees surged 43% to $2 billion, about $380 million above estimates, and equities-trading revenue climbed 14% to $2.3 billion. Fixed-income trading revenue grew 5% to $3.1 billion, meeting forecasts.The bank’s net interest income rose 9% to $15.39 billion, while provisions for credit losses fell 13% to $1.3 billion, below the $1.58 billion expected.

“With continued organic growth, every line of business reported top and bottom-line improvements,” said CEO Brian Moynihan. “Strong loan and deposit growth, coupled with effective balance sheet positioning, resulted in record net interest income.” Shares of Bank of America climbed 4% on Wednesday and are up 19% year-to-date.

The results from Morgan Stanley and Bank of America cap a strong quarter for U.S. banks following robust trading and capital-markets activity across JPMorgan Chase, Goldman Sachs, Citigroup, and Wells Fargo. Analysts said both firms benefited from heightened equity volatility, stronger M&A deal flow, and an improving interest-rate outlook.

About Morgan Stanley

Morgan Stanley (NYSE: MS) is a global financial services firm providing investment banking, securities, wealth management, and investment management services. Headquartered in New York, Morgan Stanley serves clients worldwide, including corporations, governments, and institutions.

About Bank of America

Bank of America Corporation (NYSE: BAC) is one of the world’s leading financial institutions, offering banking, investment, asset management, and risk management services. Headquartered in Charlotte, North Carolina, the company serves approximately 69 million consumer and small-business clients globally.

At the time of publishing, Stocks.News does not hold positions in companies mentioned in the article.