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Morgan Stanley has higher profits, and limits the mixed quarter for large banks




A booming market for deals and high demand for financial advice lifted Morgan Stanley‘s

MS 1.83%

earnings in the fourth quarter and helped the Wall Street firm set a full-year earnings record.

The bank posted a profit of $ 3.7 billion, up 9%, or $ 2.01 per share. Analysts expected $ 1.94 per share, according to FactSet. Revenue increased by 7% to $ 14.5 billion in the quarter, which fell just below expectations.

Morgan Stanley ended a mixed quarter for the country’s largest banks. Unexpected trading revenues over Wall Street decrease as market volatility decreases. Banks offer larger pay days to attract and keep employees in a tight labor market. Goldman Sachs Group Inc.,

JPMorgan Chase & Co. and Citigroup Inc.

all reported lower profits in the fourth quarter, ending a series of large gains. Morgan Stanley, Bank of America Corp.

and Wells Fargo & Co. so profits increase.

Morgan Stanley shares closed up 1[ads1].8 percent on Wednesday.

Entering into agreements is still a bright spot. Morgan Stanley’s investment bank income increased by 6% in the fourth quarter. Goldman, JPMorgan and Citigroup also reported gains in investment banking.

The year has off to a good start, with a healthy pipeline for new deals, Morgan Stanley’s CFO Sharon Yeshaya said in a conference call with analysts. “That said, much will depend on monetary and fiscal policy and its impact on sentiment,” she added.

Income from stock and bond trading fell 6% in the fourth quarter. Trading revenues also fell at Goldman, JPMorgan and Citigroup.

Morgan Stanley’s full-year compensation expenses rose 18% to $ 24.6 billion. Banks increased the salaries of junior bankers across Wall Street in 2021, and companies are also paying to keep top executives.

“We feel good that we have paid for performance,” said Ms. Yeshaya in an interview.

JPMorgan’s CEO Jamie Dimon said last week that his bank would remain competitive in compensating its traders and bankers, even if it pushed profit margins.

Morgan Stanley’s asset management department increased revenues in the fourth quarter by 10% from the previous year. The unit’s net interest income, a measure of lending profitability, grew by 16%. That growth may continue in the coming year, as the Federal Reserve has signaled that more interest rate hikes are likely in 2022.

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The number of retail customers at Morgan Stanley was 7.4 million, in line with the total third quarter. The average daily number of retailers the company handled for the quarter peaked at one million, but was down 6% from a year ago.

Asset management income increased by 59% from the previous year. This award was reinforced by Morgan Stanley’s acquisition of Eaton Vance, which ended in March last year.

Write to Charley Grant at charles.grant@wsj.com

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