Morgan Stanley (MS.US) Q1 performance exceeded expectations across the board: record trading volume, strong wealth management inflows.

On Wednesday, before the US stock market opened, Morgan Stanley (MS.US) announced its first-quarter financial report for 2026. Thanks to the comprehensive efforts in trading, investment banking, and wealth management business, the bank's revenue and profit both exceeded market expectations by a large margin. After the financial report was released, Morgan Stanley's pre-market stock price rose by 3.35%. With the release of Morgan Stanley and Bank of America's financial reports, the first quarter earnings season for US big banks has come to a close. With a strong moat in the stock trading and wealth management fields, Morgan Stanley has demonstrated strong defensive and offensive capabilities in a complex macroeconomic environment. Key financial data: Revenue and profit growth The financial report shows that Morgan Stanley's Q1 revenue increased by 16% year-on-year, reaching $20.58 billion; earnings per share (EPS) was $3.43, significantly higher than the $2.60 in the same period last year. Despite a 12% increase in non-interest expenses to $13.5 billion (including $178 million in severance costs), strong revenue growth covered the rising costs. By the end of March, the total number of employees at the bank had increased to 83,922. Business highlights: Record-breaking trading business, wealth management exceeding expectations Record-breaking stock trading: Following the footsteps of Wall Street peers, Morgan Stanley's stock trading revenue increased by 25% to a record-breaking $5.15 billion, exceeding expectations by about $450 million. CFO Sharon Yeshaya stated that market volatility provided the bank with opportunities to showcase its advisory value. Wealth management asset gathering: The highly anticipated wealth management business attracted $118.4 billion in net new assets this quarter, exceeding expectations. Investment banking rebound: Investment banking revenue increased by 36% year-on-year to $2.12 billion. Significant growth in merger advisory fees offset slightly lower performance in equity and bond underwriting. Fixed Income, Currency, and Commodities (FICC): Revenue grew by 29% to $3.36 billion, exceeding expectations by $540 million, mainly driven by commodity trading fueled by energy market volatility. Strategic layout and outlook: SpaceX and private equity platform Under the leadership of CEO Ted Pick, Morgan Stanley completed its first acquisition with EquityZen. The platform allows clients to trade stocks of private companies, and Morgan Stanley halved most trading prices in February, aiming to gain market share from competitors through a price war. Furthermore, as a major underwriter for the SpaceX IPO, Morgan Stanley is at the center of this epic IPO valued at $1.75 trillion with plans to raise $750 billion. Despite the pressure on the IPO market due to the Middle East situation, the listing process in the industrial and defense sectors is still progressing. Macro risks and executive warnings: GEO Group Inc political and private credit Although the trading boom from 2025 continued into this year, executives are cautious about the future: GEO Group Inc situation: The Iran conflict poses a potential threat to the global economy, making the new stock listing market more "picky." Private credit risks: Amid anxiety over AI impact and redemption waves in the $1.8 trillion private credit market, Morgan Stanley's North Haven Private Income Fund has restricted redemptions within the quarter. Business backlog: CFO Yeshaya pointed out that although the market environment has become clearer, the current business backlog has not undergone substantial changes and remains stable overall.