Morgan Stanley’s profit jumps on recovery in dealmaking

MORGAN Stanley’s profit rose in the third quarter, fuelled by a rebound in dealmaking that also helped its rivals.

The investment bank reported a profit of US$3.19 billion on Wednesday (Oct 16), or US$1.88 per share, for the three months ended Sep 30. That compares with US$2.41 billion, or US$1.38 per share, a year ago.

A revival in corporate debt issuance, initial public offerings and mergers have bolstered profits for investment banks this year.

As markets hover near record highs and the US Federal Reserve begins its policy-easing cycle, bankers expressed optimism that M&A activity will continue to recover after a two-year drought.

Morgan Stanley’s investment banking revenue jumped 56 per cent in the third quarter. Rival Goldman Sachs posted a 20 per cent surge in fees, while JPMorgan Chase saw a 31 per cent gain.

Across the industry, global investment banking revenue rose 21 per cent in the first nine months of the year, led by a 31 per cent surge in North America, according to data from Dealogic.

Morgan Stanley earned the fourth highest fees globally over the same period, the data showed. REUTERS