Most American banks have held up reasonably well during the pandemic. And then there is Morgan Stanley.
The firm reported $3.2 billion in profit for the second quarter, up 45 percent from the same time last year and a record for the Wall Street institution. Sales also set a new high, reaching $13.4 billion as its primary business lines — investment banking, trading, lending and wealth management — reported robust results, despite the circumstances.
Morgan Stanley’s results may be the envy of the financial sector, which has been weighed down by increasing reserves for potential loan losses. Huge hikes in provisions hurt results at major lenders like Citigroup, JPMorgan Chase and Wells Fargo, but were less of a drag on earnings for Morgan Stanley or its chief rival, Goldman Sachs, which make most of their money from arranging deals and managing clients’ investments.
“The second quarter tested the model and we performed exceedingly well,” James P. Gorman, Morgan Stanley’s chief executive, who contracted Covid-19 earlier this year, said in a statement.
Morgan Stanley’s results outshone those of Goldman, which on Wednesday reported a big rise in revenue but flat earnings for the quarter. Goldman’s results were still praised by one market observer, in the context of the pain elsewhere in corporate America, as “too good — almost indecent.” So, what does that make Morgan Stanley’s?