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Bloomberg
Morgan Stanley, the biggest stock-trading shop on Wall Street, is losing some of its lead.
The company posted a 14 percent drop in equities-trading revenue, the steepest decline among major US banks, as it cited lower client balances in its prime-brokerage business. While the firm had a surprise jump in wealth-management fees, the trading slump caused overall revenue to fall.
Trade disputes and other geopolitical risks have weighed on stock clients, who’ve largely stood on the sidelines.
Morgan Stanley last year elevated Ted Pick, who once led equities, to oversee all its traders and investment bankers, making him a candidate to one day become chief executive officer.
He enjoyed breakthrough results last year, but said he’s led the business with “high levels of paranoia†this year because “there are one or two competitors†who are “coming after you.â€
Equities revenue slumped to $2.13 billion in the second quarter, compared with the $2.27 billion average estimate of analysts in a Bloomberg survey. That was still the highest total among banks, but comes after rival Goldman Sachs reported a surprise jump, booking $2.01 billion of stock-trading revenue in the period.
“We’re No. 1 in the world, and we had a very strong quarter. Some of our competitors are coming from a weaker position from a year ago,†Chief Financial Officer Jon Pruzan said in an interview.