Different strokes

20 January 2021 By John Foley Follow @johnsfoley

Covid-19 delivered a trading windfall for James Gorman’s firm as it did for rivals, adding about $5 bln to 2020 revenue. Banks can’t rely on a repeat of 2020’s dislocations, but Gorman’s stock-fueled M&A means Morgan Stanley can shrewdly reach the masses while low rates continue.

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Morgan Stanley reported $3.3 billion of fourth-quarter earnings applicable to common shareholders on Jan. 20, as its income from trading stocks and bonds increased by 32% year-on-year.

The Wall Street firm’s earnings rose 57% on a year earlier, beating analysts’ estimates of $2.3 billion according to Refinitiv.

Return on equity was 14.7% for the quarter, on an annualized basis, compared with 13.2% in the third quarter.

Morgan Stanley completed its $13 billion acquisition of online brokerage E*Trade Financial in October. The same month it said it would buy asset manager Eaton Vance for $7 billion.

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