Morgan Stanley’s Outperforms its Competitors

Morgan Stanley's fourth-quarter results beat expectations and outperform Wall Street rivals

Morgan Stanley reported fourth-quarter earnings that beat analysts’ expectations, beating its rivals as the bank focused on advising wealthy clients, pushing Morgan Stanley’s stock up 3.7%.

The popular investment bank has benefited from bloated deal-making around the world and keeping expenses in check while its competitors have struggled with rising wages and technical expenses. Read More [Wells Fargo’s Fourth Quarter Results Beat Expectations].

The bank recorded record annual profits and revenues as well, as it provided advisory services to some of the largest merger deals in the world during the past year, which pushed the bank’s net income to grow by 37% to reach $15 billion with a 23% jump in revenue to reach $60 billion.

The bank has also raised its long-term aspirations for returns on physical capital ROTCE, which is considered a basic criterion that measures how well the bank directs shareholders’ funds in order to collect profits, as the bank currently aims for returns of at least 20% of capital instead of 17% as mentioned previously.

The Wealth Management Unit of the Bank achieved a 10% growth in revenues to reach $6.5 billion, to be reflected in the Bank’s collection of record annual profits. As for the quarter ending on December 31, the bank’s earnings rose to $3.59 billion, or $2.01 per share, beating analyst expectations, which did not exceed $1.93 per share, pushing Morgan Stanley’s stock up by 2.5% during morning trading following the report.

Since the beginning of the new year, investors have been anticipating the results of Wall Street banks, who had a solid year in terms of deal making and stock trading. Read more [Giant Bank Stocks Boom, With 2021 Results Awaiting].

Morgan Stanley’s traditional rival, Goldman Sachs, posted its fourth-quarter results that missed analyst estimates, sending its shares down 8%, while JPMorgan beat expectations last week, but its stock fell 6% on investor concerns about rising expenses. Read more [Goldman Sachs Stock Falls After Fourth Quarter Results] and [JPMorgan Shares Fall After Cut Guidance Due to “Headwinds”].

It is noteworthy that the year 2021 witnessed an explosion in deal-making that prompted Wall Street investment banks to record strong results, especially after putting up the reserve stock that was supposed to compensate for loan losses. Read more [Morgan Stanley Releases Results That Exceed Expectations] and [Wall Street Banks Gear Up For Strong Profits Again].

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