Morgan Stanley Generated More Than $10 Billion In Equity Trading Revenues Over The Last Five Quarters

The 5 largest U.S investment banks reported just under $7.2 billion in total equity trading revenues for Q1 2017 – marginally higher than what they made a year ago and a 13% improvement sequentially. It should be noted, though, that the equity trading industry is seasonal, with the first quarter being the best period and the fourth quarter the slowest period.

The rally in equity markets that started late last year continued over the first quarter of 2017 – boosting equity trading volumes even as seasonally high activity levels had an overall positive impact on revenues. The chart below captures changes in equity trading revenues for each of the five largest U.S. investment banks. Notably, the relative standing of these five banks have remained unchanged since Q2 2015.

Morgan Stanley dominates the equity trading business, with the investment banking giant holding the top rank globally in 12 of the last 15 quarters (Goldman topped the list on the other three occasions). Unlike its other U.S.-based peers, Morgan Stanley implemented sweeping changes to its business model over 2011-2012 to shift the focus of its business model away from fixed income trading and towards equity trading. And the bank clearly made a good decision, as it reported average equity trading figures of $2 billion over the last five quarter – higher than any other investment bank globally. You can see how changes in Morgan Stanley’s equity trading yield impacts our price estimate for the bank by modifying the chart below.

See the links below for more information and analysis about the 5 largest U.S. investment banks:

• Goldman Pockets More Than 9% Of Global M&A Advisory Fees Over Slow Q1
• Equity Capital Market Recovery Boosts Underwriting Fees To Highest Level Since Early 2015
• Q1 Was The Best Ever First Quarter For U.S. Investment Banks In Terms Of Debt Origination Fees
• How Much In M&A Advisory Fees Did The 5 Largest U.S. Investment Banks Generate In 2016?
• How Much In Equity Underwriting Fees Did The 5 Largest U.S. Investment Banks Generate In 2016?
• How Much In Debt Origination Fees Did The 5 Largest U.S. Investment Banks Generate In 2016?
• How Much In Total Advisory & Underwriting Fees Did The 5 Largest U.S. Banks Earn In 2016?

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