Morgan Stanley Posts Highest Profit Since 2007 in 1Q15

Morgan Stanley (MS) reported net income of $1.18 billion, or $1.18 per diluted share, the bank’s most profitable first quarter since the 2007 financial crisis. The profits comfortably beat the Wall Street consensus estimate of $0.79 due to higher volumes of mergers and acquisitions, as well as equity sales and trading.

Among the bulge bracket investment bankers, Morgan Stanley reported its highest jump in quarterly profits of 60%, followed by a 40% surge of Goldman Sachs (GS). The stock has returned 5.9% over the past three months, which is less than Goldman Sachs’ 11% return.

Morgan Stanley reported revenues of $9.9 billion as compared to $9 billion a year ago. The company’s investment banking achieved top three rankings in Global IPOs, Global Equity, and Global Announced M&A. The return on equity stood at 14.2% for the overall operations. The record performance led to the increase in the dividend by 50% to $0.15 per share.

Morgan Stanley provides products and services to corporations, governments, financial institutions, and individuals. The company provides financial advisory, fundraising services, corporate lending, sales and trading activities, fixed income and commodities trading, wealth management across asset classes, investment management, and research. The company classifies its revenues under three segments: Institutional Securities, Wealth Management, and Investment Management.

The company’s investment banking peers include JPMorgan Chase (JPM), Goldman Sachs (GS), Citigroup (C), Credit Suisse (CS), Evercore Partners (EVR), Deutsche Bank (DB), and Greenhill (GHL). Together, these companies form 17.06% of the Financial Select Sector SPDR (XLF).