Moments ago Morgan Stanley became the fourth major US bank to report earnings which unlike its previously reporting peers, JPM, Wells and Citi, were far more simple to digest due to the lack of bank loan balance sheet arbitrage and reliance on Net Interest Margin. After all, after Goldman Sachs, Morgan Stanley is the closest to relying almost entirely on marginal trading revenue as well as its all important wealth management unit.
The results were quite ugly: total revenue of $7.8 billion barely changed from the previous quarter, and was down 21% from Q1 2015, however due to the sharp drop in consensus estimates in recent months, revenues was a “beat” to the $7.76 billion expected.
Earnings likewise were ugly, tumbling by 53% from $2.4 billion to $1.1 billion, or $0.55 per share. This too was a beat as a result of a sharp plunge in Q1 EPS expectations in recent months.