Morgan Stanley profit blows past estimates on dealmaking boom

© Reuters. FILE PHOTO: A sign is displayed on the Morgan Stanley building in New York

(Reuters) – Morgan Stanley (NYSE:) reported a big jump in quarterly profit on Friday that comfortably beat expectations, as a global dealmaking boom boosted investment banking and heightened trading activity lifted its institutional securities division.

Morgan Stanley, which is one of Wall Street’s premier investment banks, said net income applicable to shareholders rose to $3.98 billion, or $2.19 per share, in the quarter ended March 31, from $1.59 billion, or $1.01 per share, a year ago.

Analysts were looking for a profit of $1.70 per share, according to IBES data from Refinitiv.

Net revenue jumped 61% to $15.72 billion.

Like bigger rival Goldman Sachs Group Inc (NYSE:), Morgan Stanley benefited from record levels of capital markets activity during the quarter, driven primarily by an unprecedented boom in dealmaking through special purpose acquisition companies (SPACs).

Morgan Stanley also generated handsome underwriting fees from numerous high-profile IPOs of companies such as Affirm Holdings and AppLovin Corp.

Global investment banking fees hit an all-time record of $39.4 billion during the March quarter, according to data from Refinitiv.

Morgan Stanley conceded the second position in the league tables to JPMorgan Chase & Co (NYSE:) during the quarter, according to Refinitiv, but still raked in robust investment banking fees — the league tables rank financial services firms on the amount of M&A fees they generate.

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