Ted Pick, CEO Morgan Stanley, speaking on CNBC’s Squawk Box at the World Economic Forum Annual Meeting in Davos, Switzerland on Jan. 18th, 2024.
Adam Galici | CNBC
Morgan Stanley Reports Strong Fourth-Quarter Earnings
Morgan Stanley surpassed expectations for its fourth-quarter earnings and revenue, driven by exceptional performance in its equities and fixed income trading divisions.
Key highlights from the report include:
- Earnings: $2.22 a share vs. $1.70 LSEG estimate
- Revenue: $16.22 billion, vs. $15.03 billion estimate
The bank reported a significant increase in quarterly profit to $3.71 billion, or $2.22 a share, more than doubling from the previous year due to the absence of regulatory charges.
Revenue also saw a substantial 26% rise to $16.22 billion, attributed to improved performance across all major business segments.
The standout performer was the equities trading business, which witnessed a 51% revenue surge to $3.3 billion, exceeding analyst estimates by nearly $650 million. This growth was fueled by increased client activity and strength in the prime brokerage business serving hedge funds.
Fixed income operations also delivered impressive results with a 35% revenue increase to $1.93 billion, surpassing estimates by approximately $250 million, driven by heightened activity in credit and commodities markets.
Investment banking revenue rose by 25% to $1.64 billion, in line with expectations, supported by rising advisory and equity capital markets performance.
Wealth management experienced a 13% revenue uptick to $7.48 billion, driven by higher asset levels and increased fees, surpassing estimates by $120 million.
Despite the general optimism surrounding rising deal activity in the banking sector, it was the robust trading performance that propelled both Morgan Stanley and rival Goldman Sachs during the quarter. Traders capitalized on heightened market activity before and after the U.S. elections in November.
Following the earnings announcement, Morgan Stanley shares climbed by nearly 1.6% in morning trading on Thursday.
Earlier in the week, JPMorgan Chase, Goldman Sachs, and Citigroup also exceeded expectations, benefiting from strong revenue generated in trading and investment banking.
