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Morgan Stanley beat Q1 expectations on surge in investment banking revenues

Fri 16 April 2021 13:12 | A A A

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(Sharecast News) - Banking giant Morgan Stanley topped first-quarter earnings estimates on Friday thanks to some better-than-expected investment banking and trading results.

Morgan Stanley posted a first-quarter profit of $4.1bn, or $2.19 per share, ahead of analysts estimates for a reading of $1.70 per share, while adjusted profits came to $2.22 per share.

Revenues surged 61% to an all-time high of $15.7bn, smashing expectations on the Street by $1.6bn.

Morgan Stanley's fixed-income trading desks brought in $2.97bn in revenues, about $850.0m more than forecast, while equity trading produced $2.88bn in revenues - roughly $170.0m more than estimates.

Investment banking revenues skyrocketed 128% to $2.61bn, beating estimates by approximately $500.0m on the back of record equity underwriting revenues.

However, despite the strong quarterly showing, Morgan Stanley also stated it had lost nearly $1.0bn as a result of the Archegos fund meltdown in March. MS stated it had a $644.0m loss from a "credit event", as well as $267.0m in related trading losses.

As of 1340 BST, Morgan Stanley shares were up 0.51% in pre-market trading at $81.23 each.

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