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Morgan Stanley reports jump in quarterly profits | Morgan Stanley reports jump in quarterly profits |
(35 minutes later) | |
Morgan Stanley has become the latest US bank to reports a surge in profits. | Morgan Stanley has become the latest US bank to reports a surge in profits. |
It reported net income of $980m (£644m) for the second quarter of the year, up 66% on the same period last year. | It reported net income of $980m (£644m) for the second quarter of the year, up 66% on the same period last year. |
Like rival Citigroup, the bank's share trading division had a very strong quarter, with revenue up 58% from a year earlier to $1.81bn. | Like rival Citigroup, the bank's share trading division had a very strong quarter, with revenue up 58% from a year earlier to $1.81bn. |
Total revenue for the quarter rose to $8.3bn up 4% on 2012. The bank spent 48% of that on staff compensation and benefits, down from 52% last year. | Total revenue for the quarter rose to $8.3bn up 4% on 2012. The bank spent 48% of that on staff compensation and benefits, down from 52% last year. |
"This quarter, we saw significant year-over-year revenue growth in each of our five major business units and higher year-over-year profitability. Of particular note, equity sales and trading results were strong across all products and regions," said chief executive James Gorman in a statement. | "This quarter, we saw significant year-over-year revenue growth in each of our five major business units and higher year-over-year profitability. Of particular note, equity sales and trading results were strong across all products and regions," said chief executive James Gorman in a statement. |
The company also announced a $500m stock buyback programme after receiving approval from the Federal Reserve. | |
"They blew away our revenue number ," wrote Oppenheimer & Co banking analyst Chris Kotowski in a note to clients, adding "the revenue beat was pretty much across the board with investment banking, trading and commissions all doing a bit better than expected." | |
"Nothing not to like here." | |
Shares rose to their highest level in more than two years on the good news, to $27.53, and the S&P 500 reached an intraday record, climbing above 1,687.18 for the first time. | |
Banking on profits | |
The main US banks have all been reporting large increases in second quarter profits. | |
Last week, JP Morgan reported a 31% rise in profits, and this week Citigroup, Goldman Sachs and Bank of America have all posted hefty profit increases. | |
US banks have benefited from a recovery in the US economy and continued efforts by the Federal Reserve to boost growth and employment. |
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