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Morgan Stanley’s quarterly profits shot higher at the end of last year, as it joined the other Wall Street banks in benefiting from a recovery in investment banking and vibrant stock trading around Donald Trump’s victory in the US presidential election.
But its closely watched wealth management business, which has $6.2tn in client assets, missed analyst expectations for net new assets, attracting inflows of $56.5bn, up from $47.5bn one year ago. Analysts polled by Bloomberg had expected $62bn.
Morgan Stanley reported fourth-quarter net income of $3.7bn, up from $1.5bn one year ago. Revenues were $16.2bn sharply higher year on year from $12.9bn.
Chief financial officer Sharon Yeshaya described the results as “a really strong quarter and a really strong year . . . the pipelines are the healthiest we have seen in several years”. She said net flows to wealth management had been held back by a lack of initial public offerings last year and clients needing to spend cash.
But she added that “all of the underlying metrics are really strong in terms of momentum” because the equity underwriting market started to reopen last quarter.
Morgan Stanley’s investment banking revenues, which include fees from underwriting stock and debt offerings and advising on dealmaking, rose 25 per cent to $1.6bn.
Revenues at Morgan Stanley’s equities trading business rose 51 per cent to $3.3bn, while fixed-income trading was up 35 per cent at $1.9bn. Rival Goldman Sachs had reported record net revenues in equity trading for the year, including $6.2bn for the quarter.
