Wall Street investment bank Morgan Stanley (MS) reported a 60% rise in quarterly profit, boosted by higher revenue from trading bonds and equities.
Net income applicable to common shareholders rose to $2.31 billion, or $1.18 per share, for the first quarter ended March 31, from $1.45 billion, or 74 cents per share, a year earlier.
Excluding items, the bank earned $1.14 per share.
Analysts on average had expected earnings of 78 cents per share on that basis, according to Thomson Reuters I/B/E/S. It was not immediately clear if the figures reported on Monday were comparable.
The Wall Street Journal reported Sunday that Morgan is in discussions to pay $500 million to settle an investigation by New York’s attorney general into whether the Wall Street bank misled investors in taking mortgage bonds that lost value during the financial crisis.
Citing people familiar with the matter, the newspaper said a deal with New York Attorney General Eric Schneiderman would likely include some cash from Morgan Stanley as well as consumer relief, the report said.
An agreement between the New York-based financial institution and Schneiderman’s office isn’t imminent, however, and the terms under discussion have changed, the report said. Aid to struggling homeowners will account for more than half of the total value of the settlement, but the form of the consumer relief isn’t clear, according to sources.
Also not clear, the report said is whether Morgan Stanley will need to boost its legal reserves to account for a likely settlement with Schneiderman’s office.
Earlier, Schneiderman’s office had alleged that Morgan Stanley misrepresented and omitted key details on the health of the loans that underpinned the securities it sold. The firm has said it didn’t agree with the allegations. But in March, Reuters reported that Morgan Stanley was in settlement talks.
Morgan Stanley officials were not immediately available for comment.