Morgan Stanley earnings supported by deals as trade slumps

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Morgan Stanley headquarters in New York. The bank reported strong wealth management business, up 10% to $6.25 billion from $5.7 billion a year earlier © Gabriel Pevide/Getty Images for Morgan Stanley

Revenue at Morgan Stanley’s investment bank rose 6% in the fourth quarter, a more modest rise than some rivals enjoyed during a record boom in Wall Street deals.

In its fourth quarter results on Wednesday, Morgan Stanley reported investment banking revenue of about $2.6 billion, up from $2.4 billion a year earlier and in line with analysts’ forecasts, according to data compiled by FactSet.

By comparison, rivals Goldman Sachs and JPMorgan Chase saw fourth-quarter revenue in investment banking rise 45% and 28%, respectively.

Shares of Morgan Stanley were down 4.9% in premarket trading in New York.

Its investment banking revenue for the full year soared 43%. But fourth-quarter trading revenue, which has benefited since early 2020 from higher market volatility, fell 26 yr-on-y to $2.4 billion, lagging analyst forecasts by 3. $7 billion. Goldman’s trading revenue also unexpectedly fell in the quarter.

Morgan Stanley reported total net income of $3.6 billion, down from $3.3 billion a year earlier and corresponding guidance. The bank’s overall revenue was $14.5 billion, down from $13.6 billion a year earlier and slightly below the expected $14.6 billion.

Year-over-year comparisons were flattered by the integration of the purchase of Eaton Vance which was completed in March 2021.

Wealth management revenue, which includes ETrade, rose 10% to $6.25 billion from $5.7 billion a year earlier. In investment management, revenue rose 59% to $1.7 billion, supported by the integration of Eaton Vance.

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