Morgan Stanley's Q4 profit jumps on rise in dealmaking, stock sale

Morgan Stanley's profit increased in the fourth quarter, fueled by a wave of dealmaking and stock sale by the investment bank.

Wall Street banks benefited from a surge in mergers and acquisitions in the fourth quarter that boosted investment banking fees. 

Dealmaking was also propelled by a strong US economy, interest-rate cuts and expectations of lighter regulation under incoming US President Donald Trump. 

"We are executing against four pillars-  strategy, culture, financial strength and growth, that support our integrated firm, creating long-term value for our shareholders," CEO Ted Pick said, citing growth in investment banking and wealth management. 

Morgan Stanley's investment banking revenue rose 25 per cent to $1.64 billion, echoing results at rivals Goldman Sachs and JPMorgan, which also reported stronger profit on Wednesday. 

Its earnings grew to $3.7 billion, or $2.22 per share, it said on Thursday, compared with $1.5 billion, or 85 cents per share, a year earlier. 

Shares of the bank rose 1.1 per cent before the bell. 

Globally, investment banking revenue jumped 26 per cent to $86.80 billion in 2024, according to data from Dealogic. Wall Street CEOs and dealmakers expect more large deals to be approved under the Trump administration than his predecessor Joe Biden. 

Investment banks also cashed in on rallying equities, which encouraged initial public offerings and follow-on stock sales, while lower borrowing costs led companies to issue bonds.   

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