Morgan Stanley caps off earnings season with record profit
Morgan Stanley’s profit jumped almost 50 per cent in the final quarter of 2019, its results showed today, pushing the lender’s yearly earnings to a record high.
The last of the Wall Street giants to report its fourth-quarter earnings, Morgan Stanley also achieved record revenue in 2019 as its bond-trading arm prospered.
Profit rose 46 per cent year on year to $2.2bn (£1.7bn) in the final quarter. This took earnings per share to $1.30, up from 81 cents a year earlier and well above analysts’ predictions of 99 cents.
Shares in Morgan Stanley rose 6.6 per cent in early trading to $56.44.
Fourth-quarter revenue rose 27 per cent year on year to $10.9bn, boosted by a 33 per cent rise in trading revenue, almost all of which was driven by increased bond trading.
The strong performance in the final quarter took annual net income up three per cent year on year to $9bn.
Morgan’s chairman and chief executive James Gorman said: “We delivered strong quarterly earnings across all of our businesses. Firmwide revenues were over $10 billion for the fourth consecutive quarter, resulting in record full year revenues and net income.
He added: “This consistent performance met all of our stated performance targets.”
Morgan Stanley was the final major US bank to publish its fourth-quarter earnings, capping off a somewhat mixed reporting period.
Strong growth in trading was a highlight for Goldman Sachs and JP Morgan, as well as Morgan Stanley. This was in part due to a weak finish to 2018 – when markets were wracked by trade war angst – flattering final-quarter results.
While Goldman and JP Morgan both achieved record earnings, Bank of America, Goldman Sachs and Wells Fargo all saw profit slip to varying degrees.
Morgan Stanley faced a surge in severance costs to $172m in the final quarter of the year due to the sacking of two per cent of its workforce ahead of an uncertain year for global markets.