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July 16, 2020

Morgan Stanley Q2 net income soars on strong trading

Morgan Stanley has reported a 45% surge in Q2 2020 net income despite the Covid-19 crisis, driven by strong trading performance.

The group’s net income for the three-month period ending June 2020 was $3.2bn, versus $2.2bn last year.

Net revenues at the group soared 31% to $13.41bn from $10.24bn over the period.

Morgan Stanley’s Wealth Management unit reported net revenues of $4.68bn in Q2 2020, up 6% from $4.41bn in the prior year.

Asset management revenues remained almost flat at $2.51bn.

Pre-tax income at the division was $1.1bn in the quarter, while pre-tax margin was 24.4%

Net revenues at the Investment Management arm rose 6% year-on-year to $886m.

The unit’s pre-tax income increased to $216m from $199m.

Sales and Trading net revenues surged 68% from a year ago, while Investment Banking revenues increased 39% on a year-on-year basis.

Equity sales and trading net revenues increased to $2.62bn from $2.13bn last year, driven by “strong performance in cash equities and derivatives across all regions”.

Strong performance across products and geographies on higher client activity resulted in a rise in fixed income sales and trading net revenues to $3.03bn from $1.13bn.

Morgan Stanley chairman and CEO James Gorman said: “The second quarter tested the model and we performed exceedingly well, delivering record results.

“This builds on the momentum of a very strong first quarter, while more than 90% of our employees continue to work from home, demonstrating the ongoing operational resilience of our platform.”

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