Profit jumped 57% to $3.3 billion, crushing analysts estimates. Volatility in the financial markets propelled its trading business, boosting its bottom line. The U.S. elections and the release of coronavirus vaccines fueled those trading volumes.
Like its rival, Goldman Sachs, Morgan Stanley also benefited from heightened activity in mergers and acquisitions transactions and underwriting IPOs and mergers. That lifted its investment banking revenue 46%.
Goldman's profit also dwarfed Wall Street estimates, but its executives warned that capital markets activity will probably slow down.
Morgan Stanley CEO James Gorman has been taking steps to reduce the bank's reliance on trading. Under his leadership, the company bought Eaton Vance and E*Trade to bolster its investment management and broking businesses.
The company confirmed plans to buy back $10 billion of its shares this year.
Its shares, which have jumped more than 9% this year, gained further ground in early trading Wednesday.
