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Morgan Stanley profits fell almost a third in the fourth quarter, as costs at its wealth management business rose and it reached a settlement with regulators over block trading.
The results were the last under longtime chief executive James Gorman, who handed over to former investment banking boss Ted Pick at the start of January.
Profits in the fourth quarter dropped to $1.5bn from $2.2bn in the same period a year earlier. For the full year, they were down 17 per cent to $9.1bn.
Morgan Stanley’s powerhouse wealth management division has transformed the bank’s fortunes over the past decade, but revenues at the business were flat in the final three months of last year at $6.6bn while its expenses rose almost 10 per cent. Fees from investment banking rose 5 per cent in the period.
The quarterly performance was also dragged down by a $249mn settlement that Morgan Stanley struck with regulators last week to resolve a long-running probe into its block trading business.
Morgan Stanley produced solid returns in 2023, “against a mixed market backdrop and a number of headwinds”, Pick said in a statement. “We are focused on achieving our long-term financial goals and continuing to deliver for shareholders.”
Shares of Morgan Stanley edged higher in pre-market trading.