00:00Dealmakers and traders really have driven the banks to big, big stellar performances this third quarter.
00:05And that remains the case here with Morgan Stanley.
00:07But the extra wrinkle here or the thing that you want to pay attention to for Morgan Stanley is its wealth management business,
00:12which is more stable, it's fee generating, and it's not a victim to the market's moves and swings.
00:17So Morgan Stanley's wealth management business reporting revenue of $8.23 billion,
00:22much, much higher than what analysts were looking for, which was $7.78 billion.
00:26And that was an increase of about 7%.
00:29So this is a big, big beat here.
00:31And, of course, net revenue did rise more than 13% from the same time last year.
00:36When you look at the trading side of the business, equity sales trading,
00:40which is really the dominant part of Morgan Stanley's trading business, $4.12 billion.
00:45That is better than the expected $3.41 billion.
00:48Fixed sales and trading revenue, a smaller part of its business, but that, too, was a beat,
00:52$2.17 billion versus the expected $2.07 billion.
00:55And investment banking revenue also higher than anticipated.
00:58One thing that got my attention, though, was the fact that it did not seem to provision for any credit losses in the third quarter.
01:05Zero was the third quarter provision for credit losses.
01:07Analysts were looking for somewhere in the neighborhood of $97 million.
01:10So from Morgan Stanley's perspective, that seems to be they have enough money set aside right now for loans that could go bad.
01:16But I'm guessing that this will come up on the investor call.
01:20J.P. Morgan had actually set aside more money for the third quarter while Goldman Sachs set aside less.
01:26Expenses, non-interest expenses, did come in higher than anticipated.
01:29And this is something that's been consistent with the banks that have reported, certainly from Goldman Sachs.
01:33It's $12.2 billion for non-interest expenses.
01:36Analysts were looking for just under $11.85 billion.
01:40And compensation expenses, which tends to be the most, the heftiest part of expenses for banks, was $7.44 billion, also higher than what analysts had anticipated.
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