A big spike in trading helps Morgan Stanley nearly double its profit, which crushed analysts' estimates. Fred Katayama reports.
They say you save the best for last. Morgan Stanley, the last of the big banks to report, wowed investors with quarterly profit that nearly doubled. The unit that it has been trying to shrink, bond and currencies trading, grew revenue 19 percent. The huge spike in foreign currency trading volume has helped its peers as well. And it edged out rival Goldman Sachs in equity trading revenue. Morgan Stanley CEO Jim Gorman has been trying to stabilize the company's earnings by growing its wealth management business. That unit delivered, too. Profit increased 17 percent, and Its pretax profit margin rose to hit the lower end of the company's targeted range ahead of schedule. UBS analyst Brennan Hawken said, "Overall, the solid results in both the securities business and wealth management show continued progress in the Morgan Stanley story." One goal Gorman missed: return on equity. It fell shy of his double-digit target of 10 percent. He has been working to tame pay for his brokers. But compensation costs rose. Non-compensation expenses fell by the same amount. So expenses overall were flat. Investors applauded the results. Morgan Stanley shares, which have outperformed its peers this year, shot up at the open.