Morgan Stanley reported a 62 percent profit increase in the last three months of the year, pushing earnings at the U.S. bank to a record annual high and ending a strong results season on Wall Street, driven by a boom in trade and deal-making .
The US bank, which has invested heavily in its wealth and asset management divisions in recent years, posted net profit of $ 4.43 billion in the fourth quarter, up from $ 2.73 billion a year earlier.
Fourth quarter earnings per share at $ 1.81 significantly exceeded the $ 1.25 level predicted by analysts in a Bloomberg poll, while revenues were also better than expectations of $ 13.6 billion . Annual profit was $ 11 billion, surpassing last year’s record of $ 9 billion.
“The company delivered a very strong quarter and full year results, with excellent performances in all three companies and regions,” said James Gorman, CEO.
Morgan Stanley’s investment bank was the top performer, with revenue and trading revenues up 32 percent year-over-year. That included a 31 percent increase in fixed income income, much better than the performance of the other major US banks, which was led by a 15 percent increase at JPMorgan Chase.
But Morgan Stanley’s 30 percent rise in fourth-quarter stock trading, where it is the world’s largest player, was lower than jumps at Goldman Sachs, Citigroup and JPMorgan Chase.
Morgan Stanley posted the biggest gains in investment banking – advising clients on how to raise debt, stocks and deals – with revenues up 46 percent in the fourth quarter from a year earlier.
Asset management, which Morgan Stanley expands with the $ 7 billion acquisition of ETrade, increased revenues 24 percent year-on-year to $ 5.7 billion. That division’s net profit was down 5 percent year-on-year as it absorbed the costs of integrating Eaton Vance.