Morgan Overtakes Arch Rival Goldman Sachs

October 20 00:00 2011

New York, October 20 ( – Morgan Stanley (NYSE: MS) has overtaken Goldman Sachs (NYSE: GS) in its race for supremacy on Wall Street. It posted a third-quarter profit of $2.2 billion, or $1.15 a share because of a $3.4 billion accounting gain beating Wall Street estimates and outpacing Goldman Sachs which posted a loss of $438 million for the same period.

Morgan Stanley shares gained 1 cent yesterday, to $16.64 in the face of concerns about its exposure to European banks. Its revenue was $6.5 billion which was twice the $3.14 billion that Goldman generated, excluding $450 million in gains for its debt valuations.

Morgan’s strength is its 17,000-plus army of brokers. Its brokerage business Morgan Stanley Smith Barney is largely responsible for its fortunes. Even in the field of investment banking, Morgan Stanley is ahead of its rival as it posted $864 million in revenues compared to $781 million for Goldman.

The company discounted rumors about its exposure to European battered economies and said that its exposure to European debt was $5.7 billion, or about $2.1 billion on a hedged basis. The finance chief of Morgan Stanley, Ruth Porat said that the firm is hoping for better days to come and added that “There’s been a lot of pain absorbed in the system and I’m reluctant to call a bottom, but I would say that we’re guardedly optimistic.”