Morgan Stanley released its Q2 results Monday and the results were better than expected.
“We delivered a strong quarter across each of our businesses, through client-focused execution, expense discipline and prudent risk management,” said James P. Gorman, Chairman and Chief Executive Officer. “We remain focused on delivering the long-term value of this franchise.”
While most of its businesses did well in Q2, none more so than its wealth management division which delivered a 16% year-over-year increase in pre-tax income on $3.9 billion in revenues for a 23% pre-tax margin.
In January Morgan Stanley released a strategic update for fiscal 2015 that called for pre-tax margins of 22-25% in its wealth management business suggesting it’s right on target to meet and exceed its expectations in this very important part of the bank’s operations.
Client assets in fee based accounts amounted to $813 billion at the end of the second quarter, a seven per cent increase from Q2 2014. Average annualized revenue per representative was $978,000, eight per cent higher than in the same quarter last year.
“Overall it has been a pretty good quarter for the universal banks, said Sandler O’Neill analyst Jeffery Harte. “They continue to show expense discipline and revenues are going to hang in there better than many expected.”
In other words, don’t write off the big banks just yet.
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