Morgan Stanley said Thursday that its corporate clients are ready to do business – but they’re a little unnerved by the impending fiscal crisis.
The bank reported higher revenue and net income for the third quarter after stripping out an accounting charge, helped by a jump in underwriting and trading bonds. Executives described the markets as calm.
But businesses aren’t going full bore on deal-making, if Morgan Stanley’s results are any indication. Revenue that the bank made from advising companies on mergers, acquisitions and other strategy fell. So did revenue from underwriting stock offerings, as well as revenue from trading stocks on behalf of clients.
Chief Financial Officer Ruth Porat said that many businesses, though interested, are waiting to see what happens with the U.S. fiscal cliff. That’s when higher tax rates and lower government spending are scheduled to kick in at the beginning of the year, unless Congress can work out a compromise before then.