Morgan Stanley reported profit that beat analysts’ estimates as a surprise jump in fixed-income results helped the firm post the only increase in trading revenue among the six biggest U.S. banks this year. The stock rose 3 percent in early New York trading.
The world’s top investment banks may see combined revenue from trading, underwriting and advising on mergers drop 11 percent in the first quarter as clients cut back on activity, JPMorgan Cazenove analysts said.
Goldman Sachs Group Inc. and Morgan Stanley were cut by an analyst at JPMorgan Chase & Co. on concern that a U.S. regulatory proposal may make the banks’ capital requirements stricter than European rivals.
Europe’s failure to resolve its sovereign-debt crisis will force investment-banking chiefs in the region to consider shuttering entire businesses rather than rely on piecemeal job reductions to revive profit.