(Bloomberg) -- Equities traders across Wall Street’s biggest banks pulled off a clean sweep of higher-than-expected quarterly gains — by a startling margin.
The 18% jump in combined revenue from helping clients bet on stocks was more than triple the increase analysts estimated. On conference calls, industry leaders pointed to a combination of swelling balances and a flurry of dealings, particularly in derivatives, led by their largest customers.
“In institutional equities, we are back,” Morgan Stanley Chief Executive Officer Ted Pick said on a conference call Tuesday touting his firm’s $3.02 billion haul. “It continues to be an equities world. You see it in the asset price momentum in the US. You see now the potential for that to broaden to more names and more sectors.”
Pick spent years rising through his firm’s equities division, which used to claim the title of biggest stock-trading shop on the street. In recent years, Goldman Sachs Group Inc. and, to a lesser extent, JPMorgan Chase & Co. have been muscling into the top spot. Goldman took first place in the three months ended June 30 with a $3.17 billion haul, while Morgan Stanley came in second. The S&P 500 rose more than 14% in the first half.
“The activity and the balances, et cetera, obviously have benefited from equity market inflation over the course of the year,” Goldman CEO David Solomon said Monday.
Bank of America Corp. notched its best second quarter ever for stock trading as it seeks to grow its markets prowess. Chief Financial Officer Alastair Borthwick called the outlook for the broader unit “constructive” on a call with journalists Tuesday.
At JPMorgan, the 21% jump was boosted by record revenue in prime services, commercial and investment bank co-heads Jenn Piepszak and Troy Rohrbaugh wrote in an internal email Friday. Finance chief Jeremy Barnum also called out equity derivatives and growth in client balances on a conference call last week.
Citigroup Inc.’s 37% jump — the biggest increase of the group — included a “significant portion” of its roughly $400 million gain tied to a Visa Inc. share exchange, CFO Mark Mason said Friday. Beyond that, “we continue to see good underlying momentum in equity, primarily driven by equity derivatives,” he said.
--With assistance from Sridhar Natarajan and Jenny Surane.
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