Morgan Stanley beats quarterly profit estimates on equity trading strength

By Pritam Biswas and Saeed Azhar

Oct ‌14 (Reuters) - Morgan Stanley ​beat estimates ​for third-quarter profit on Wednesday, helped by higher income from investment banking and strong equity trading as markets remained volatile due to the Federal Reserve's interest-rate decision and ‌the US-Iran war.

The turbulence forced investors to realign their portfolios, driving up trading volumes ⁠and boosting revenue at bank's trading desks. Morgan Stanley posted equity trading revenue of $5.8 billion, a nearly 41% rise from ‌a year ago.

Goldman Sachs, which beat ‌estimates for third-quarter profit a day ago, also reported a similar jump in equities trading.

"The company's equities trading activity has done a lot of the heavy lifting for the bank's third quarter overall," ​said Daniel Coatsworth, head of markets at AJ Bell.

Morgan Stanley's revenue from its fixed income trading dropped 7.3% to $2.01 billion. The slowdown also mirrored that of Goldman Sachs whose fixed income, currency ⁠and commodities revenue came in 1% down from a year ago.

Profit attributable to Morgan Stanley came in at $4.91 billion, or $3.03 per share, ​in the three months ended September 30, compared with $4.61 billion, or $2.80 per share, a year ago.

Analysts were expecting a profit of $2.91 per share, according to estimates ​compiled by LSEG.

INVESTMENT BANKING HOLDS

Global deal value plunged 41% from ‌the previous quarter to a total of $993 billion, LSEG data showed, dipping below the $1 trillion quarterly threshold for the first time since the second quarter of ⁠2025.

The IPO market also remained subdued as several companies such pulled their offerings citing tough market conditions.

However, Morgan Stanley's investment banking revenue rose 2% to $2.16 billion from a year ago. Goldman Sachs also reported higher income from its ⁠investment banking division whereas JPMorgan Chase reported a slowdown.

Morgan Stanley was the lead financial advisor to Uber's deal to buy ​Germany's Delivery Hero at an equity value of $14.8 billion. The bank was also the lead financial advisor to castings supplier Consolidated Precision Products in its deal to be acquired by GE Aerospace for $11.75 billion.

The investment bank has also ‌secured underwriting roles in the expected IPOs of artificial intelligence companies Anthropic and OpenAI.

US bank stocks fell sharply in the third quarter as a surge in ‌Treasury yields to multi-decade highs triggered investor fears over rising funding costs and a prolonged slowdown in mergers and ⁠acquisitions.

Shares of Morgan Stanley have gained about ‌5.1% in 2026, underperforming the ​broader markets, but outperforming peer Goldman Sachs. The stock was trading marginally higher before the bell.

(Reporting by Pritam Biswas in Bengaluru and Saeed Azhar in New York; Editing by ‌Arun Koyyur)

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