Morgan Stanley Profit Soars, Closing Out a Banner Year -- Update
January 16 2020 - 8:22AM
Dow Jones News
By Liz Hoffman
Morgan Stanley 's fourth-quarter profit rose 46% from a year
ago, capping off the bank's best year on record.
The firm's profit of $2.2 billion, or $1.30 a share, on $10.9
billion in revenue, topped expectations of analysts polled by
FactSet, who had forecast earnings of $1.02 a share on $9.71
billion of revenue.
For the full year, revenue and profit both ticked up 3%.
Morgan Stanley is the last of the big U.S. banks to report
earnings for the fourth quarter, navigating a stretch that included
a Federal Reserve interest-rate cut and fierce global tensions.
Giants JPMorgan Chase & Co. and Citigroup Inc. sailed through,
while Goldman Sachs Group Inc. and Wells Fargo & Co. both took
big legal charges that dragged down profits.
Morgan Stanley's return on equity, a measure of profitability,
was 11.3% for the quarter, versus a range of 8.7% to 15% at
peers.
Chief Executive James Gorman, now in his 10th year, has taken
Morgan Stanley from a chronic earnings-day wild-card to a steadier
performer. A no-nonsense Aussie -- he pledged $1 million last week
to aid in wildfire relief there -- he has pivoted the firm away
from trading and toward wealth management, a steadier business that
now accounts for nearly half of its revenue.
He has hit a series of financial metrics he set out for
shareholders and last summer struck the largest acquisition by a
major U.S. bank since the crisis, buying Solium, which helps
companies manage the stock they pay employees. The deal is meant to
provide a stream of new clients for Morgan Stanley's
wealth-management arm.
A priority now is growing the bank's $550 billion
money-management arm, which is adding assets organically but
remains nichier than rivals. (It is small in fixed-income fund
offerings and has avoided passive exchange-traded funds
altogether.)
Mr. Gorman has sounded acquisitive lately and eager to use the
goodwill he has accumulated with investors and regulators. Helping
his cause: Morgan Stanley shares are up 25% since Sept. 30, making
them a better currency.
Write to Liz Hoffman at liz.hoffman@wsj.com
(END) Dow Jones Newswires
January 16, 2020 08:07 ET (13:07 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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