Morgan Stanley reports drop in profit, but wealth management gains

) reported a drop in quarterly profit Thursday, hit by lower market activity amid global trade tensions and expectations for U.S. interest rate cuts.

The wealth business, which contributes 44% of Morgan Stanley’s revenue, rose 1.9% to $4.40 billion from a year earlier. The unit benefited both from higher stock prices and more lending to customers. That more than offset the effects of lower interest rates. “What drives the numbers is not just net interest income,” said Gorman on a call with analysts. “We have some other businesses over here and some of these businesses are chugging along quite nicely.”

Morgan Stanley does not report this metric, but Chief Financial Officer Jonathan Pruzan said interest rate cuts would crimp margins in the wealth business. What it would do to the rest of the bank’s business, he said, is less clear.

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