Profit and revenue fell at Morgan Stanley (MS) during the first quarter, another sign of how challenging the period was for some of Wall Street’s giants as deal making dried up and a banking crisis upended markets.
Its first-quarter profit of $2.98 billion was down 19% from the year-ago period. Revenue was down 2%, to $14.52 billion. Both were up compared with the fourth quarter.
Its investment banking revenue, which includes underwriting of IPOs as well mergers and acquisitions advisory work, fell 24% from a year ago and was flat when compared to the fourth quarter.
Its stock was down more than 4% in pre-market trading.
A number of other big banks, including Morgan Stanley rival Goldman Sachs (GS), also said investment banking fees were down during the quarter. Trading at Morgan Stanley was also down 26%, an even deeper drop than Goldman experienced.
What helped Morgan Stanley was its wealth management division, an area of increasing focus for CEO James Gorman. Specifically a rise in that division’s net interest income, which is the difference between what a bank makes on its assets and pays out in deposits.
Many banks have been benefitting from a rise in interest rates by charging more for their loans. Morgan Stanley said its net interest income increase was the result of “higher interest rates and bank lending growth.”
But it was also not immune to an outflow of deposits affecting most financial institutions as customers seek higher yields. Its deposits were down 3.7% from a year ago and 2.5% from the fourth quarter.
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