Morgan Stanley’s Profit Soars to Record High
A Year of Unparalleled Success
Morgan Stanley’s fourth-quarter profit has more than doubled, driven by a surge in dealmaking and stock sales that propelled its revenue to a record high. This remarkable performance caps off a stellar quarter for Wall Street banks, which have benefited from a strong U.S. economy, interest-rate cuts, and expectations of lighter regulation under the new administration.
CEO Ted Pick’s First Year: A Resounding Success
Ted Pick, who won the top job in a three-man contest, has had an impressive first year as CEO. He described 2024 as “one of the strongest years in the firm’s history,” with Morgan Stanley achieving record net revenue of $61.8 billion.
Deal-Making Frenzy
The investment banking revenue grew 25% in the quarter, driven by fees from stock sales that doubled from a year earlier. According to Chief Financial Officer Sharon Yeshaya, the factors that were limiting deals, such as regulatory challenges, high interest rates, and a closed IPO market, are changing.
Record-Breaking Performance
Profit soared to $3.7 billion, or $2.22 per share, for the three months ended December 31, compared with $1.5 billion, or 85 cents per share, a year ago. Analysts had expected $1.7 per share, according to estimates compiled by LSEG.
Equity Trading Revenue Hits Record High
Busier activity across geographies, particularly in Asia and the Americas, lifted Morgan Stanley’s equity trading revenue by 22% to a record. The bank’s quarterly investment banking revenue rose 25% to $1.64 billion, echoing results at rivals Goldman Sachs and JPMorgan Chase.
Wealth Management: A Stable Source of Income
Morgan Stanley’s revenue from wealth management rose 13% to $7.5 billion, helped by record revenue in asset management. This unit provides the bank with stable income, offsetting the volatility from investment banking and trading. The bank has set a target of managing $10 trillion in client assets and reached $7.9 trillion in the quarter.
Looking Ahead
With the Trump administration expected to approve more large deals, Wall Street CEOs and dealmakers are optimistic about the future. Morgan Stanley’s CFO expects new IPOs this year to draw new assets into the bank’s workplace division, which manages relationships for company employees.
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