Equivalent to the profit the bank made in the whole of 2009 – and against a loss of $578m in the same period last year – it is Morgan Stanley’s institutional securities business, where the majority of the profits have come from.
Gorman added 350 staff, reported a near-fivefold increase in net revenue to $5.3bn, including $1.4bn from equities and $2.7bn from fixed income. The fixed income results are the best since the third quarter of 2008. The message loud and clear is that the institutional business will, and is being given equal weight.
Yes, its earlier conservatism as it lagged peers in taking risk when the economy began to rebound is still costing it. Goldman’s debt-trading arm’s revenue of $7.4bn for the same period is triple that of Morgan Stanley, but it is beginning to catch up.
Gorman has already admitted he was “not satisfied” with the company’s performance in 2009, and yesterday said there was “still much to do”. With Gorman at the helm, the bank won’t be the weak sister amongst its peers for long.