Morgan Stanley profits from corporate bond boom

Written By limadu on Kamis, 18 Oktober 2012 | 05.32

Morgan Stanley's shares are up 22% this year.

NEW YORK (CNNMoney) -- The corporate refinancing boom help drive Morgan Stanley's third-quarter earnings, which handily beat expectations.

During the third quarter, the bank's revenue from underwriting bonds more than doubled from a year earlier to $431 million.

"The rebound in fixed income & commodities sales and trading indicates that clients have re-engaged after the uncertainty of the rating review in the previous quarter," said Morgan Stanley CEO James Gorman.

Back in June, Moody's downgraded all major banks, but Morgan Stanley's rating took the biggest hit, falling two notches.

Overall, Morgan Stanley earned $561 million, or 28 cents per share, on revenue of $7.6 billion. That's better than the 24 cents a share and $6.4 billion of revenue that analysts had projected.

Alongside its jump in revenue, the bank increased its compensation expenses by 8% to $3.9 billion.

Related: Mortgages helped (and hurt) Bank of America

Like many of its rivals in the banking world, Morgan Stanley remains ensnared in litigation. The American Civil Liberties Union recently sued the bank, saying that it discriminated against minority homeowners with its risky pre-financial crisis mortgage lending.

Shares of Morgan Stanley (MS, Fortune 500) rose nearly 2% in premarket trading. The bank's stock is up 22% this year.

Morgan Stanley is the sixth major U.S. bank to report earnings, following JPMorgan Chase (JPM, Fortune 500), Wells Fargo (WFC, Fortune 500), Citigroup (C, Fortune 500), Goldman Sachs (GS, Fortune 500), and Bank of America (BAC, Fortune 500). Overall, banks have reported better-than-expected results, driven largely by the rebound in housing and mortgage lending. To top of page

First Published: October 18, 2012: 7:59 AM ET


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