American multinational banking group Morgan Stanley has released its fourth quarter 2022 result showing a 40% drop in net profit.
The bank also reported a 40% year-on-year decrease in net income to $2.2 billion for the fourth quarter, as revenues in its wealth management businesses failed to counterbalance a sharp drop at its investment bank.
The Challenges: Investment banking had another challenging quarter, with Morgan Stanley’s revenues falling 49% year on year to $1.25 billion, in line with analysts’ estimates of $1.2 billion. Rivals JPMorgan Chase, Bank of America, and Citigroup on Friday reported that investment banking revenues in the latest quarter more than halved from a year ago.
The drop underscored the difference from 2021 when Morgan Stanley and rivals raked in revenue from advising on mergers and acquisitions and new stock market listings. Such activity has slowed dramatically in 2022.
Online trading platform: Revenues in wealth management, which includes online trading platform ETrade, were up 6 % to more than $6.6 billion. But investment management, which now houses Eaton Vance following Morgan Stanley’s acquisition of the money manager in 2021, was hit by falling markets, which cut assets under management.
Revenues dropped 17% to $1.5 billion but topped analyst estimates of $1.3 billion.
- “We reported solid fourth-quarter results amidst a difficult market environment,” Gorman said in a statement. “Overall, 2022 was a strong year for the firm. Wealth management provided stability with record revenues and over $310 billion in net new assets.”
Morgan Stanley shares were up more than 2% in premarket trading.
