Morgan Stanley reports quarterly profits leap after interest rate hikes
US investment bank Morgan Stanley is the latest Wall Street giant to report an impressive leap in quarterly profits thanks to interest rate hikes by the Federal Reserve.
The group saw first quarter profits jump 74% to 1.93 billion US dollars (£1.5 billion) after bond sales and trading revenues in its fixed income division almost doubled to 1.7 billion US dollars (£1.3 billion) from 873 million US dollars (£680 million) a year earlier.
Its wealth management arm also grew profits in the quarter, with net revenues of 4.1 billion US dollars (£3.2 billion) compared with 3.7 billion US dollars (£2.9 billion) a year earlier.
The business grew assets under management by 10% to 2.19 trillion US dollars (£1.7 trillion).
Morgan Stanley joins rivals in enjoying a bumper first quarter, with Bank of America, JPMorgan Chase, Citigroup and Wells Fargo all having been boosted by higher interest rates after the Fed hiked the cost of borrowing once in December and again in March.
Goldman Sachs is the only US banking player so far to report back on a disappointing first-quarter, posting figures on Tuesday that revealed lacklustre trading revenues.
While Goldman saw profits grow by 80% to 2.2 billion US dollars (£1.7 billion) in the first quarter, the performance fell short of analyst expectations.
James Gorman, chairman and chief executive of Morgan Stanley, hailed one of the group's " strongest quarters in recent years".
He added: "All our businesses performed well in improved market conditions.
"We are confident in our business model and the opportunities ahead, while recognising that the environment remains uncertain."
Fellow Wall Street giant BlackRock - the world's largest fund management group - also posted figures on Wednesday showing better-than-expected earnings as first quarter net income rose 31% to 862 million US dollars (£672 million).
The group benefited from ongoing strong demand for its index-tracking funds, with assets under management rising to 5.4 trillion US dollars (£4.2 trillion) from 5.1 trillion US dollars (£4 trillion) the previous quarter.