Morgan Stanley experienced a 13% drop in earnings as trading and dealmaking slowed down. However, the CEO, James Gorman, believes that the industry’s decline has reached its lowest point. The New York-based financial firm reported a second-quarter profit of $2.2 billion, falling short of last year’s $2.5 billion. While trading revenue declined by 22%, investment banking revenue remained unchanged at $1.08 billion. Gorman expressed his optimism, stating that the firm’s $1.24-per-share earnings surpassed analysts’ expectations of $1.15 per share. Additionally, revenue exceeded estimates, increasing by 2% to $13.5 billion. Morgan Stanley’s stock price rose by almost 6%.
Gorman acknowledged the challenging market conditions but commended the firm’s solid results. The wealth management unit experienced a significant rise in net revenue, reaching a record $6.7 billion, and gained nearly $90 billion in new assets. The profit shortfall was attributed to severance costs of $308 million paid to over 3,000 employees who were laid off. Morgan Stanley has reduced its workforce by 3.6% this year due to slower dealmaking caused by a tough economic environment.
Attention has now turned to Goldman Sachs, which is expected to release its second-quarter earnings. Analysts predict a 49% year-over-year decline in earnings per share for the investment bank. The anticipated drop follows a slowdown in trading revenue and layoffs affecting 250 employees, including 125 managing directors. Forex estimates also suggest an 11.8% decrease in net revenue for Goldman Sachs.
Bank of America exceeded analysts’ expectations, with a 19% increase in profit to $7.41 billion, accompanied by an 11% rise in revenue to $25.33 billion. JPMorgan Chase also posted impressive earnings, with a 34% jump in revenue to $42.4 billion and a 67% increase in net income to $14.5 billion.
Citigroup reported better-than-expected earnings and profit, although revenue fell by 1% compared to a year ago. CEO Jane Fraser attributed the losses to the delayed rebound in investment banking, resulting in a disappointing quarter.
Denial of responsibility! VigourTimes is an automatic aggregator of Global media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, and all materials to their authors. For any complaint, please reach us at – [email protected]. We will take necessary action within 24 hours.
