Morgan Stanley’s (MS) profit and revenue decreased during the first quarter, highlighting how difficult the year was for some of Wall Street’s titans as negotiations dried up and a banking crisis upended markets.
Its first-quarter revenue of $2.98 billion was down 19% year on year. Revenue fell 2% to $14.52 billion. Both were higher than in the previous quarter.
The company’s investment banking earnings, which includes IPO underwriting as well as mergers and acquisitions consulting services, declined 24% year on year and was unchanged in the fourth quarter.
In pre-market trade, the stock was down more than 4%.
Several other large banks, notably Morgan Stanley rival Goldman Sachs (GS), reported lower investment banking fees throughout the quarter. Morgan Stanley’s trading was also down 26%, a larger reduction than Goldman’s.
Morgan Stanley’s wealth management division, an area of increasing importance for CEO James Gorman, aided the firm. Specifically, an increase in net interest income, which is the difference between what a bank earns on its assets and what it pays out in deposits.
Many banks have benefited from rising interest rates by charging higher interest rates on their loans. Morgan Stanley attributed the increase in net interest income to “higher interest rates and bank lending growth.”
However, it was not immune to the outflow of deposits that was hurting most financial institutions as consumers sought greater yields. Deposits were down 3.7% year on year and 2.5% in the fourth quarter.