James Gorman said the worst is over for the industry's downturn in trading and investment banking.
"I do believe it's bottomed," the Morgan Stanley chief executive officer said in an interview on Bloomberg Television Tuesday. Deals will pick up, but possibly not until next year, he said.
Morgan Stanley earlier Tuesday reported second-quarter results that fell short of analysts' estimates for some businesses, including revenue from trading and investment banking, which comprises advising on mergers and underwriting stocks and bonds.
Still, shares of the New York-based firm surged as much as 7.2% after company executives said they are more optimistic about the second half of the year. The firm also recorded $90 billion of inflows at its wealth unit and posted a capital ratio well in excess of regulatory requirements.
Gorman, 65, said in May that he planned to hand the reins to a successor within 12 months. The race to replace him has come down to three finalists: Ted Pick and Andy Saperstein, the firm's co-presidents, as well as investment-management chief Dan Simkowitz.
The board will make the decision, and each of the candidates is highly qualified to take over, according to Gorman.
