Morgan Stanley has reported a 51% jump in net income in Q4 2020, driven by robust investment banking and wealth management performance.

Key metrics

The investment bank’s net income for the three-year-period ended 31 December 2020 stood at $3.38bn, versus $2.24bn in the same quarter of 2019.

Net revenues soared 26% to $13.64bn from $10.86bn over the period.

Net revenues in Wealth Management increased 24% to $5.7bn from $4.6bn, driven by higher asset levels as well as strong fee-based flows.

The growth was also attributed to the acquisition of discount brokerage E*TRADE Financial. However, the deal and integration-related costs led to a rise in total expenses.

The bank’s institutional securities unit – that includes its investment banking and trading businesses – reported a 39% growth in net revenues to $7bn from $5.05bn.

Investment banking revenues of $2.3bn in Q4 2020 was 46% higher than the previous year, driven by growth in advisory and equity underwriting revenues.

Sales and trading net revenues increased 32% to $4.22bn from $3.19bn, with equities trading accounting for $2.5bn of the figure and fixed income trading generating $1.66bn.

Meanwhile, net revenues at the bank’s investment management arm dropped 19% to $1.1bn from $1.35bn.

Morgan Stanley chairman and CEO James Gorman said: “The Firm produced a very strong quarter and record full-year results, with excellent performance across all three businesses and geographies.”

Gorman was optimistic in his outlook for the current year.

He stated: “We enter 2021 with significant momentum, and I am very confident in our competitive position and our opportunities for continued growth.”

Morgan Stanley moves in 2020

Last year was a busy year for the investment bank.

In August 2020, the bank expanded its offering for HNW clients and their families by providing property & casualty (P&C) insurance.

In September, Morgan Stanley’s Shareworks partnered with Mitsubishi UFJ Trust and Banking to offer stock plan administrative services to executives and employees of companies in Japan.

A month later, Morgan Stanley completed two acquisitions.

These include the $13bn deal to acquire E*TRADE Financial and the deal to buy investment manager Eaton Vance.