According to the Zhitong Finance APP, Morgan Stanley (MS.US), a top Wall Street investment bank, announced its Q2 2024 earnings before the U.S. stock market opened on July 16th. Financial report data shows that the profit and revenue scale of the bank in Q2 exceeded Wall Street analysts' expectations. Trading and investment banking performed better than expected. In Q2, Morgan Stanley's revenue reached $15.02 billion, higher than analysts' expected $14.3 billion. Diluted earnings per share in Q2 reached $1.82, higher than analysts' expected $1.65.

Morgan Stanley stated in the financial report that thanks to the all-round rebound of Wall Street financial activities, especially under the AI trend and the expected rate cut, Morgan Stanley's fixed-income underwriting business and IPO investment banking business significantly rebounded in 2024. The bank's net profit surged by about 41% compared to the same period last year, reaching $3.08 billion, or $1.82 per share.

Morgan Stanley benefited from its business model centered on large investment bank operations and stock trading in Q2. The large-scale rebound trend in stock trading and investment banking businesses helped the bank's institutional securities business department's revenue surpass the wealth management business department's, reversing the long-term decline of institutional securities business since the Fed's interest rate hike cycle.

Detailed financial data shows that Morgan Stanley's institutional securities business revenue in Q2 reached $7 billion, higher than about $5.7 billion in the same period last year. Investment banking, which significantly pushed the revenue growth rate of this business department, soared by about 51% to $1.62 billion, about $0.22 billion more than expected, mainly because of the significant increase in fixed-income underwriting activities and IPOs of AI-related companies. Morgan Stanley stated that the scale of fixed-income underwriting was mainly driven by the debt financing of non-investment grade companies.

The stock trading business revenue, which is crucial for Morgan Stanley's institutional securities business department, increased by 18% year-on-year to $3.02 billion, about $0.33 billion higher than analysts' expectations. Fixed income trading business revenue increased by 16% year-on-year to $1.99 billion, exceeding expectations by approximately $0.13 billion.

CEO Ted Pick stated in a press release: "In a continuously improving capital market environment, the company has performed strongly in the quarter. We will continue to execute our strategy and maintain a good state to achieve growth and long-term value for our shareholders."

However, Morgan Stanley's wealth management performance was not satisfactory, with the department's overall revenue growing by only 2% to $6.79 billion, lower than analysts' general expectation of approximately $6.88 billion.

Although the department's revenue scale significantly increased due to the rise in the stock market, revenue related to interest fell sharply by 17% to $1.79 billion compared to the same period last year.

Morgan Stanley stated that the decline in deposit scale was due to the bank's wealthy client base continuing to transfer cash to higher-yielding assets amid a macro environment of rising benchmark rates and a cooling demand for loans in a high-interest rate environment, leading to a significant drop in overall cash deposits.

CEO Ted Pick stated in a press release: "In a continuously improving capital market environment, the company has achieved strong quarterly performance again. We will continue to execute our strategy and maintain a good state to achieve growth and long-term value for our shareholders."

Last week, the revenue and net profit scales of large Wall Street commercial banks JPMorgan Chase, Wells Fargo & Co, and Citigroup all exceeded analysts' general expectations. On Monday, Goldman Sachs Group continued this trend, benefiting from the comprehensive rebound trend of investment banking-centered business activities on Wall Street.