Morgan Stanley accuses the impact of the financial markets in its accounts. The American firm has registered a net profit of 2,236 million dollars during the fourth quarter of the year, which represents a drop of almost 40% compared to the 3,696 million recorded in the same period of 2021.
The group is highly dependent on the investment area, whose revenues have registered a sharp decline due to fewer IPOs, the blow from variable and fixed income, as well as the deterioration of the economy. This situation has affected its revenues, which also fell 12%, to 12.7 billion dollars in the fourth quarter, although they exceed market forecasts.
In the document published by the firm, it includes up to 50% less income derived from investment banking between October and December, up to 5,235 million dollars, while investment management fell 17%. On the other hand, the Wealth Management area is spared, with revenue growth of 6% in the aforementioned period. In this sense, it has provisioned 85 million against possible defaults, a figure higher than the 5 million that it reserved at the end of the previous year.
For the year as a whole, Morgan Stanley has obtained a net profit of 11,029 million dollars, 36% less compared to 2021, while posting a turnover of 53,668 million, 10% less. The executive president of the company, James P. Gorman, defends that these accounts are “solid” in a difficult economic scenario, which has also affected the financial market. Earnings per share has fallen from $2.01 to $1.26.
Morgan Stanley was the first of the Wall Street heavyweights to announce downsizing. The New York-based company has reduced its workforce by 2%, around 1,600 employees, for the first time since fiscal year 2019. It has been followed by Goldman Sachs, which, although it has reduced departures from the initial 4,000 people to 3,200 workers, the figure represents about 6.5% of its team and BlackRock, which plans to do without about 500 people (2.5% of the total).