The coronavirus pandemic is bringing earnings down in virtually every industry, but Morgan Stanley (NYSE:MS) has done better than its peers despite decreased profits.
Revenue in the first quarter compared to the same period last year fell 7.8% to $9.49 billion, and profits dropped 30% to $1.7 billion, or $1.01 per share. These numbers were slightly below consensus expectations compiled by S&P Global Market Intelligence, which reported downgraded expectations of $9.82 billion in revenue and $1.8 billion in profit by generally accepted accounting principles, or $1.15 per share.
The novel coronavirus has caused a large decrease in profits for the other commercial banks, such as 45% at Bank of America and 89% at Wells Fargo, which reported earnings earlier in the week. Morgan Stanley CEO James Gorman came down with COVID-19 in March but has since recovered.
Morgan Stanley's trading revenue grew 30% to $4.5 billion in the first quarter. "There is a bearish group and a bullish group, so we have active and engaged clients," said CFO Jonathan Pruzan. Morgan Stanley is the biggest stock trader on Wall Street. However, the bank also warned that the coming months may include "many of the same negative impacts and without the potential benefit of higher client trading activity experienced in the first quarter."
Investment banking revenue stayed flat at $1.1 billion, and wealth management remained steady with $4 billion in revenue. The bank manages $2.4 trillion for $3.5 million wealth management clients. Pruzan said that clients sold off stocks in March, trading $30 million into safer cash accounts instead.
Morgan Stanley's asset management group saw a 14% decrease in revenue with $692 million.