Going by this last quarter's results, Wall Street could have a new top dog. Morgan Stanley trounced not just market expectations for its latest three-month revenues, but its arch-rival Goldman Sachs as well. "Morgan Stanley is the new Goldman Sachs," the Rochdale Securities' analyst Dick Bove declared after seeing the results yesterday. Morgan Stanley's bonds, commodities and currency trading operations brought in revenues of $1.9bn (£1.67bn), up from $1.7bn, despite the new regulations and caution on the part of clients that have been affecting all Wall Street firms since the financial crisis.
In the very weak second quarter of this year, revenue from this trading division was no worse than in the first three months, whereas Goldman Sachs suffered a 63 per cent drop. The difference is that Morgan Stanley, headed by James Gorman, put more of its money at risk during the period, while Goldman Sachs pulled back.
Morgan Stanley's total revenues were $9.3bn, compared with the $7.3bn Goldman reported earlier this week. A bottom-line loss of $558m – the result of restructuring the crisis-era investment by Japan's Mitsubishi UFJ – was much less than predicted. And the bank said it had set aside $143,066 per employee so far this year for salaries and bonuses, 7 per cent up on last year.