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Investing.com - Morgan Stanley blew past expectations in the third quarter, as investment banking fees spiked following a recovery in dealmaking activity after a tepid period earlier this year.
Like its peers on Wall Street, the lender has been bolstered by a resurgence in corporate tie-ups and market debuts, which had all but stalled in the wake of President Donald Trump’s sweeping tariff announcement in April.
But more clarity around the levies, along with renewed interest rate reductions by the Federal Reserve, have helped to reinvigorate transactions -- and, by extension, the fees firms like Morgan Stanley can charge for their advisory services.
Total trading revenue rose by 6.51% versus the preceding quarter and 24.5% against a year ago to $6.285 billion.
Investment banking revenues shot up by 44% year-over-year, with Morgan Stanley pointing to the benefit from completed mergers and acquisitions as well as increased initial public offerings.
"Clients actively engaged in capital-raising opportunities in a more constructive market environment," Morgan Stanley said in a statement. Fixed income underwriting revenues also rose on elevated loan issuances that reflected a "more favorable financing environment," the firm added.
In its wealth management unit, net revenues grew by 13% to $8.2 billion.
The bank posted net income of $4.61 billion, or $2.80 per share, during the quarter, versus estimates of $2.11 a piece. Net revenue of $18.22 billion -- a record for the third quarter -- also far surpassed forecasts of $16.64 billion, according to Bloomberg consensus projections.
Shares of Morgan Stanley were higher by more than 3% in premarket U.S. trading on Wednesday.