Chillin' out till it needs to be funded
Morgan Stanley minimised its institutional securities business in Q4 to a wallflower, the company making $2.1 bln in Sales and trading revenue in 4Q over $17 bln for the year stopped at Q3 $6.4 bln trading income. Global Wealth and Asset management revenues for the quarter grew to a equally insipid $3.7 bln , growin in % contribution while asset management also reduced to half over last December to $424 mln in revenues.
In Investment Banking the bank finished with a $1 bln for each quarter at $4.2 bln for the year behind Bank Am’s $5.2 bln. Full year’s profits were a sinking $4.2 bln with an EPS of $1.26 as reported by the company, half of its $2.46 performance in 2010. The 4Q revenues fell to $5.7 bln on a $1.7 bln MBIA charge with pre tax losses of $770 mln in Institutional business (Sales and Trading + IB fee)
Net Revenues for the full year were $28.7bln beind Goldman Sachs excluding the $3.7 bln addition of DVA on its credit book and EPS of 1.26 from continuing operations. The full year’s numbers also include a $1.7 bln conversion sharge for the stake now held by Mitsubibishi UFG and a $583 mln loss on the sale of the JV stake with MUFG.
The firms leadership in Internet IPOs grew it to #2 in IPOs Underwriting revenues were as low as $477 mln with $288 mln in bonds and $189 mln in equities were a no show for the aggressive underwriting the firm seemed to be doing with full year underwriting reduced by a sixth to $2.5 bln. Advisory income for the year at $1.7 bln included $406 mlon onl in the last quarter but still ended 18% higher
Compensation ratios at the Wealth management and Asset management groups was 62% and 45% for a total of $9.28 bln. institutional securities comp reduced to 42% for the full year despite the bonuses (capped at $120k) going in the 4th Quarter taking the 4Q comp charge to 75% of the non existent $2 bln revenues. Despite annual sales of $17 bln compared with $13 bln in wealth, the comp expense for the Institutional Securities business was $7.2 bln compared to the $9.2 bln at the two retail un