Investment banks enjoyed a record year in 2021. According to Renaissance Capital, initial public offering ( IPO ) activity was at the highest level ever, with 397 companies going public. This year has been a different story, however.
Equity markets have seen higher volatility due to rising inflation and prospects of rising interest rates. That, coupled with geopolitical uncertainty stemming from the Russia-Ukraine war, has made many companies pump the brakes on going public in the quarter. As a result, investment banks saw lackluster results in the quarter.
One investment bank that saw a slowdown was Morgan Stanley (NYSE: MS) . However, the firm put up better numbers than expected, beating analysts' earnings estimates by 20%. What helped Morgan Stanley was its diverse business mix -- something it's been working toward for years.
For further details see:
How Morgan Stanley's Diversified Revenue Model Helped It Overcome Slow IPO Activity