Investment bank Morgan Stanley’s earnings contract for the first six months of the year. The company reported attributable net income of $5,162 million between January and June 2023, a decrease of 16% compared to the same period last year. Investment banking is blaming the economic deterioration and drought for M&A operations in the market. Despite the slowdown, the company has upgraded its forecasts and by the end of the morning session its shares were up 6.80% on Wall Street after its CEO James Gorman announced that the company intends to triple assets under management.
The company says its net income rose only marginally by 0.1% to $27,974 million over the period, according to the company’s reports released on Tuesday. Of this, $23,618 million was attributable to commissions, wealth management, trading, investing and investment banking, up 1%, while the group’s net interest passed on revenues of $4,356 million. , 3% less.
The provision of funds to deal with loan defaults increased by 150% to $395 million in the first six months of the year. In fact, companies have been forced to increase their provisions for default risk, even as the Federal Reserve’s interest rate hikes — including 10 consecutive hikes to 5.25% in May — boosted earnings.
The decline in profits has been going on for a long time. Specifically, full-year 2022 earnings fell 27% to $11,029 million. Morgan Stanley reported second-quarter attributable net income of $2,049 million, down 28% from the same period last year, after a 7% decline in profit to $13,457 million.
Goldman Sachs and Morgan Stanley profits fall on investment banking
The value of assets under management was $1,412 trillion (1,255 trillion euros), up 4.5%. In the three months analyzed, the credit reserve fell by 31% to $161 million. Additionally, the CET1 capital ratio, which measures assets of the highest quality, was 15.5%, up three-tenths year-on-year.
“Our company delivered solid results in a challenging financial environment,” said Morgan Stanley President and CEO James Gorman, noting that the quarter started with macro uncertainty and weak demand but ended it with “more constructive.” Volume. Morgan Stanley’s board of directors has declared a quarterly dividend of $0.85 per share, up 7.5 cents (6.7 cents), payable from August 15 through July 31 Reference Shareholders is paid out.
At the opening of the US stock market, the financial giant continued its upward trend with a gain of 6.38%. At the start of the day, its shares were trading at $0.87 per share and mid-morning they were trading at around $0.90.
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