Morgan Stanley and Goldman Sachs 8217 profits soar

The two giant US investment banks have reported steep increases in profits.

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By :  ,  Financial Analyst

US investment bank Morgan Stanley has posted an 87 per cent rise in profits to $1.65 billion (£1 billion) in the third quarter of the year. The bank's total revenue for the quarter rose 12 per cent to $8.91 billion.

Trading of currencies, commodities and bonds was a big driver of profits, as was wealth management, the BBC reports.

Bond trading revenues were up 19.4 per cent to $997 million, while wealth management revenue rose nine per cent to $3.79 billion.

"We are well positioned to create superior returns for our shareholders, particularly as the US economy continues to strengthen," chief executive James Gorman said in a statement.

Shares rose 3.7 per cent in premarket trading as results beat analyst estimates.

On Thursday, rival bank Goldman Sachs reported a 50 per cent rise in profits. Its earnings rose to $2.24 billion, or $4.57 a share, compared with $1.52 billion, or $2.88 a share, in the period a year earlier. 

The bank’s total net revenue rose 25 per cent, to $8.39 billion, outpacing the $7.8 billion anticipated by analysts, the New York Times report.

Several other big banks posted their profits this week, with Bank of America reporting on Wednesday a smaller-than-expected loss for the third quarter of the year, with a loss of one cent a share.

Revenue for the quarter came in at $21.21 billion, against the comparable year-ago figure of $21.53 billion.

A pickup in profits from trading helped balance a $5.6 billion payment to the US government to settle accusations it sold flawed mortgage securities before the 2008 crisis.

On Tuesday, JP Morgan reported a profit of $5.6 billion for the quarter. The bank posted a total revenue for the quarter of $25.2 billion, up five per cent on a year earlier.

In addition, Citigroup Inc reporting a 13 per cent rise in adjusted net profit, while Wells Fargo reported a 1.7 per cent increase in net earnings.

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