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Morgan Stanley Profits Jump 74 Percent

Overall, the Wall Street bank’s profits soared, while the wealth management unit set new records in profits, revenues and client assets.

Morgan Stanley posted profits of $1.84 billion — or $1 per share — in the first quarter, up 74 percent from a year ago and 22 percent from the fourth quarter 2016, beating analysts’ expectations by 12 cents a share, according to Revenues were $9.7 billion, up nearly 25 percent year-over-year, beating analysts’ expectations by $410 million.

The wealth management unit reached new records during the quarter including net revenues of more than $4 billion, up 2 percent from last quarter, and 11 percent from this time last year. Profits before taxes in the unit also jumped 9 percent to a record $973 million, 24 percent higher than the first quarter of last year.

Client assets rose 4 percent sequentially to a record $2.18 trillion. Loan balances reached a record $74 billion during the quarter, up 1 percent sequentially and 12 percent from last year. Annualized revenue per financial advisor, a metric watched by the broker/dealers, also inched 2 percent to a new record of just more than $1 million. Merrill Lynch also reported improved advisor productivity in its earnings release this week.

The traditional brokerage’s network of advisors remained virtually unchanged during the first quarter. It added only 14 advisors, bringing its total headcount to 15,777. Over the last year, the network has lost 111 advisors, the bank said.

In the bank’s earnings report, Morgan Stanley also noted that non-compensation expenses for the unit fell by $26 million to $768 million due to lower costs for professional services. Meanwhile, compensation expenses were up $200 million to $2.3 billion as a result of higher revenues and an increase in the fair value of deferred compensation plans.

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