Morgan Stanley says trading profits to decline

Morgan Stanley anticipates a decline in revenue from trading and investment banking during the second quarter due to a more challenging economic environment, according to co-president Andy Saperstein, who shared the information with investors on Wednesday.

Saperstein stated that sales and trading results will be significantly lower compared to the strong performance in the same quarter last year, while investment banking is also facing considerable challenges. Saperstein, who also leads Morgan Stanley’s wealth management division, is a potential candidate to succeed CEO James Gorman.

In terms of the wealth business, Saperstein outlined ambitious targets, aiming for annual pretax profits of $12 billion over the coming years and seeking to more than double client assets under management from the current $4.6 trillion to $10 trillion. The bank is open to potential acquisitions in the wealth and asset management sectors as well.

Addressing the potential of artificial intelligence (AI), Saperstein highlighted the transformative impact it could have on the work of financial advisers catering to high-net-worth clients. He expressed Morgan Stanley’s commitment to integrating game-changing technologies into their platform and cited their partnership with OpenAI as an example of their innovative approach. Saperstein mentioned that the collaboration with OpenAI began over a year ago, before the company became widely known.