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    Morgan Stanley Profit Rises, Powered by Deal Making, Trading

    Morgan Stanley’s

    MS 2.07%

    third-quarter profit rose 36% from a year earlier, thanks to all-time high revenues from advising on mergers and acquisitions.

    The New York bank reported profit of $3.71 billion, or $1.98 a share. That exceeded the $1.69 expected by analysts polled by FactSet. Revenue was up 26% to $14.75 billion. That beat the expected $13.93 billion.


    What do you make of Morgan Stanley’s third-quarter earnings? Join the conversation below.

    Morgan Stanley benefited from another quarter of merger mania. Companies confident in their economic prospects used the summer to acquire rivals or test their luck on the public market.

    Investment banking fees jumped 67% to $2.85 billion, a new quarterly record. Revenue from advising on deals more than tripled to a record $1.27 billion. Fees from arranging initial public offerings and stock offerings rose 16% to $1.01 billion.

    Elevated merger activity from all ends of the bank’s global footprint drove the deal making boom, Morgan Stanley Chief Financial Officer

    Sharon Yeshaya

    said in an interview. Deal demand came from a diverse set of companies, Ms. Yeshaya said.

    “We’re seeing a broadening out both from a geographical perspective and from a sector perspective, so all healthy signs in terms of what is going on in that market,” Ms. Yeshaya said.

    Morgan Stanley said the number of deals in the pipeline remains strong, and that it expects activity across its investment banking business to continue.

    Trading revenue rose 6% to $4.52 billion. JPMorgan Chase & Co. said Wednesday that its third-quarter trading revenue fell 5%.

    Revenue at Morgan Stanley’s wealth-management division, which includes E*Trade, increased 28% to $5.94 billion. In the investment-management division, revenue increased 38%.

    Morgan Stanley shares closed Wednesday at $98.57. They rose slightly in Thursday morning trading. The bank’s shares are up 44% this year, hitting an all-time high of $105.45 in August.

    The number of retail-trading clients at Morgan Stanley was 7.4 million, in line with the previous quarter. The average daily number of retail trades the company handled for the quarter neared 1 million, but was down 8% from the second quarter.

    Operating expenses increased 21% to $9.9 billion.

    Morgan Stanley boosted lending by 19% to $325 billion outstanding.

    Bank earnings

    Read more articles about companies closely tied to the economy, selected by WSJ editors.

    Write to Orla McCaffrey at

    Copyright ©2021 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

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