Morgan Stanley's results from investment banking cratered as turbulent markets dealt another blow to the capital-markets business as firmwide revenue fell short of estimates.
The company's investment-banking group posted US$1.28 billion in revenue in the third quarter, down 55 per cent from a year earlier. Revenue from Morgan Stanley's trading business rose slightly, with fixed income surging 33 per cent. The firm benefited from rising rates, which boosted net interest income in its wealth-management business to US$2 billion.
“This is a strong and stable result in a difficult environment,” Chief Financial Officer Sharon Yeshaya said in an interview Friday. The bank has been focusing on retaining its market share in capital markets, continuing to increase assets under management and maintaining a strong capital base, with the firm performing well on all those counts, she said.
Trading revenue totaled US$4.64 billion, slightly short of the US$4.65 billion average estimate. That was led by the jump in fixed-income revenue, which surged to US$2.18 billion. The New York-based firm is also leading the effort to provide financing for Elon Musk's rekindled desire to buy Twitter Inc. for US$44 billion. The debt commitment was provided when markets were on stronger footing, and the banks working on the deal now risk losing at least several hundred million dollars on the buyout package.
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