Morgan Stanley reports record profits thanks to deal growth and trading boom

1/18/2025, 11:57 AM

Morgan Stanley achieves record results thanks to strong investment banking and trading gains, but also aims to catch up in wealth management.

Eulerpool News Jan 18, 2025, 11:57 AM

Morgan Stanley reported a net profit of $3.7 billion in the fourth quarter of 2024, more than double the previous year's $1.5 billion. Revenues rose to $16.2 billion, a record since the 2008 financial crisis, significantly surpassing the $12.9 billion of the previous year's quarter.

Revenues from investment banking grew by 25 percent to $1.6 billion, driven by a recovery in IPOs and bond issuances. In the trading area, revenues from stock trading rose by 51 percent to $3.3 billion, while trading in fixed-income securities increased by 35 percent to $1.9 billion.

This strong performance reflects similar results at competitors such as Bank of America, JPMorgan Chase, and Goldman Sachs, which also benefited from a boom in investment banking and increased trading activity.

Despite impressive results, the wealth management business managing $6.2 trillion in client funds fell short of expectations. With net inflows of $56.5 billion, Morgan Stanley missed analysts' expectations of $62 billion. CFO Sharon Yeshaya explained that a lack of IPOs and higher client expenses had slowed inflows.

CEO Ted Pick remained confident and reiterated the long-term goal of $10 trillion in assets under management in Wealth Management. At the same time, he announced a strategic shift in focus: Morgan Stanley aims to expand its presence in investment banking and trading. "We are seeing the best deal backlog in ten years," said Pick, referring to a noticeable increase in activity in the M&A sector.

Morgan Stanley's stock rose about 2 percent on Thursday, after having already gained nearly 5 percent the previous day, as other Wall Street banks presented strong results.

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