American banking giant Morgan Stanley’s (NYSE: MS) 2021 Q4 profits have exceeded analyst projections for a period the company focused more on mergers and acquisitions while generating revenues from advising on deals.
Results published by the lender indicate that revenues surged 6.8% to $14.52 billion, beating the $14.6 billion estimates. Earnings also increased 9.2% from a year earlier to $3.7 billion, or $2.01 per share.
Additionally, Morgan Stanley recorded $5.49 billion in compensation expenses which remains almost stagnant compared to the $5.98 billion posted a year ago. Compensation expenses were driven by higher discretionary compensation on higher revenues alongside increased salaries and benefits.
Furthermore, the Wall Street giant noted that its equities trading revenue during 2021Q4 increased 13% on a year-over-year basis to $2.86 billion. Morgan Stanley indicated that the growth directly impacts the rising prime brokerage revenue alongside higher client engagement in regions like Asia.
Investment management also topped estimates, rising 59% to $1.75 billion. The bank’s wealth management segment grew over 10% to $6.25 billion.
“Wealth Management grew client assets by nearly $1 trillion to $4.9 trillion this year, with $438 billion in net new assets. Combined with Investment Management, we now have $6.5 trillion in client assets. Our integrated investment bank has continued to gain wallet share. We have a sustainable business model with scale, capital flexibility, momentum, and growth,” said Morgan Stanley CEO James P. Gorman.
MS stock gains
In the wake of announcing the results, Morgan Stanley’s stock has gained 2.4% in the last 24 hours to trade at $96 at press time.
Like other major banks, Morgan Stanley stock has registered mixed prospects in 2022. However, the bank aims to benefit from higher net interest income as the Federal Reserve begins increasing interest rates.