Morgan Stanley’s fourth-quarter profit rose 46 percent from a year ago, capping off the bank’s best year on record.
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The firm’s profit of $2.2 billion, or $1.30 a share, on $10.9 billion in revenue, topped expectations of analysts polled by FactSet, who had forecast earnings of $1.02 a share on $9.71 billion of revenue.
For the full year, revenue and profit both ticked up 3 percent.
Morgan Stanley is the last of the big U.S. banks to report earnings for the fourth quarter, navigating a stretch that included a Federal Reserve interest-rate cut and fierce global tensions. Giants JPMorgan Chase & Co. and Citigroup Inc. sailed through, while Goldman Sachs Group Inc. and Wells Fargo & Co. both took big legal charges that dragged down profits.
Morgan Stanley’s return on equity, a measure of profitability, was 11.3 percent for the quarter, versus a range of 8.7 percent to 15 percent at peers.
Shares rose 1.5 percent in premarket trading Thursday.
CEO James Gorman, now in his 10th year, has taken Morgan Stanley from a chronic earnings-day wild-card to a steadier performer. A no-nonsense Aussie -- he pledged $1 million last week to aid in wildfire relief there -- he has pivoted the firm away from trading and toward wealth management, a steadier business that now accounts for nearly half of its revenue.
He has hit a series of financial metrics he set out for shareholders and last summer struck the largest acquisition by a major U.S. bank since the crisis, buying Solium, which helps companies manage the stock they pay employees. The deal is meant to provide a stream of new clients for Morgan Stanley’s wealth-management arm.
A priority now is growing the bank’s $550 billion money-management arm, which is adding assets organically but remains nichier than rivals. (It is small in fixed-income fund offerings and has avoided passive exchange-traded funds altogether.)
Mr. Gorman has sounded acquisitive lately and eager to use the goodwill he has accumulated with investors and regulators. Helping his cause: Morgan Stanley shares are up 25 percent since Sept. 30, making them a better currency.