Morgan Stanley reported record quarterly revenue and profit on Wednesday, driven by an equities trading desk that posted $6.3 billion in revenue — a 69% year-over-year increase that exceeded analyst expectations by approximately $1.9 billion and set a new all-time record for the business. The results reinforce a pattern of sustained trading strength that has characterized the largest US investment banks in an environment of elevated market volatility, active client repositioning, and a recovering deal pipeline.
The bank posted net revenue of $21.35 billion for the second quarter ended June 30, up 27% from $16.8 billion a year earlier and above the $19.64 billion consensus forecast compiled by LSEG. Net income rose 58% to $5.58 billion, or $3.46 per diluted share, compared with $3.54 billion, or $2.13 per diluted share, in the same period a year ago. Analysts surveyed by StreetAccount had expected equities trading revenue of roughly $4.4 billion; the $6.3 billion result was the most significant surprise in the quarter and the primary driver of the earnings and revenue beats.
CEO and Chairman Ted Pick described the results as the product of "active markets and consistent execution across all three regions," saying the quarter delivered record revenues in excess of $21 billion and record EPS, underscoring the leverage Morgan Stanley has built into its diversified business model across trading, investment banking, wealth management, and asset management. Fixed income trading revenue also held firm, and investment banking showed continued momentum as M&A advisory and equity underwriting activity picked up from prior-year lows.
Wealth management contributed meaningfully to the results, with the division adding $148 billion in net new assets and $39 billion in fee-based assets during the quarter, reinforcing the long-term trajectory toward the firm's $10 trillion client asset target. Investment management results reflected $1.6 billion in revenue driven by asset management fees on higher average assets under management, with positive long-term net flows of $7.5 billion over the period.
On capital return, the board declared a quarterly dividend of $1.15 per share, an increase of $0.15 from the prior quarter, payable on August 14 to shareholders of record as of July 31. The board simultaneously reauthorized a share repurchase program of up to $20 billion, beginning in the third quarter, signaling confidence in the firm's capital position and its ability to generate excess returns. Morgan Stanley shares rose 0.97% to $230.31 in Wednesday's session following the results, extending gains from Tuesday when the stock climbed ahead of the announcement.
The results arrive alongside a broader pattern of strong bank earnings in the second quarter. Goldman Sachs reported on Tuesday with earnings of $20.98 per share against the $14.48 consensus estimate, driven by similar trading strength and a rebound in deal activity. The bank earnings wave is being read by market strategists as evidence that capital markets activity is accelerating through 2026 even as the Federal Reserve signals a potentially higher-for-longer rate path, and that active volatility — driven in part by geopolitical uncertainty and ongoing inflation uncertainty — is proving more lucrative than feared for the major trading desks.