Remarkable Results: Morgan Stanley and Bank of America Ride the Wave of Market and Investment Banking Recovery

Morgan Stanley reports a quarter with over $18 billion in revenue, driven by advisory services and markets

Morgan Stanley reported net revenue of **$18.22 billion** for the third quarter ending September 30, compared to $15.38 billion a year earlier—an increase of approximately 18%. The net income attributable to the firm amounts to **$4.61 billion**, or **$2.80 per diluted share**, compared to $3.19 billion and $1.88 per share a year ago. The return on tangible common equity (ROTCE) stands at **23.5%**, one of the highest in the industry.

The investment banking division (« Institutional Securities ») generated **$8.523 billion** in net revenues, compared to $6.815 billion last year. Investment banking fees amount to **$2.108 billion**, up 44%. Equity underwriting surged by 80% to $652 million. Equity trading accounts for $4.116 billion, up 35%, while fixed income trading reaches $2.169 billion, an increase of 8%.

In Wealth Management, the company posted **$8.234 billion** in revenues, with a pre-tax margin of **30.3%**. With **$81 billion** in net new assets acquired over the quarter, total client assets climbed to **$8.9 trillion**. The Investment Management business rounds out this growth picture, with revenue of $1.651 billion, up 13%.

Morgan Stanley also repurchased **$1.085 billion** in common stock and announced a dividend of $1.00 per share. The CET1 (Common Equity Tier 1) capital ratio is 15.2%, while the efficiency ratio (expenses/revenues) stands at 67%.

Bank of America: The Momentum of Diversification and Economies of Scale

Bank of America reports another strong quarter. The group announces a total revenue of $28.2 billion, up 11% year-over-year. Earnings per share (EPS) reached $1.06, an increase of 31% compared to the same period in 2024. The return on tangible common equity (ROTCE) rose to 15.4%.

The net interest income (NII) on a fully taxable equivalent (FTE) basis set a record at $15.4 billion, driven by growth in commercial loans and deposits. For the fourth quarter, the bank anticipates NII between $15.6 and $15.7 billion.

All business segments posted positive contributions, but two deserve special attention:

- Consumer Banking: generated $3.4 billion in after-tax profit, growing by 28%, with an operational leverage of 600 basis points for the quarter.

- Global Wealth & Investment Management (GWIM): reported net income of approximately $1.3 billion, an increase of 19%. The segment relied on growth in management fees, strong net asset flows ($84 billion over a rolling year), and increased loans.

The investment banking division brought in more than $2 billion in fees (+43% year-over-year). The Global Banking segment showed solid growth, supported by advisory fees, equity and bond issuances, and deposit growth (+15%).

Bank of America also returned $7.4 billion to shareholders through dividends and stock buybacks. Total deposits exceed $2 trillion, with total assets reaching $3.4 trillion at the end of the quarter. The CET1 ratio stands at 11.6%, while the supplementary leverage ratio (SLR) is 5.8%.

Credit quality remains robust: net charge-offs decreased to $1.4 billion (-10% compared to the previous quarter), and provisions for loan losses are set at $1.3 billion.

Looking ahead, Bank of America forecasts NII growth of around 5% to 7% for 2026, supported by reintegrating fixed-rate loans and gradually reducing high-cost funding.

These combined results confirm that an integrated bank—combining investment banking, market activities, credit, and wealth management—can generate significant synergies in a volatile yet favorable market environment. The resurgence of market commissions and the interest income boosted by credit dynamics enhance profitability.

Morgan Stanley demonstrates remarkable cost control and an exceptional return on tangible equity, driven by increased margins and market commissions, along with capital investment leverage. Bank of America, on the other hand, capitalizes on the diversification of its activities and the strength of its integrated business model: strong performance in its traditional sectors (retail banking, credit) combined with a revival in market banking.

While these results are impressive, their sustainability will depend on the ability to maintain growth in market commissions and credit while managing associated risks (market, interest rate, credit quality). Interest rate forecasting, discipline in capital allocation, and digitalization (AI, automation) will play a crucial role in the trajectory towards 2026.