Morgan Stanley posts slide in fourth-quarter profits

Morgan Stanley reported a slide in fourth-quarter income on Tuesday, as costs in its core wealth management division jumped.

The Wall Street bank reported net revenues of $12.9bn in the three months to 31 December, compared to $12.7bn a year previously.

Pre-tax income declined, however, to $2.1bn from $2.8bn, while net income fell to $1.5bn from $2.2bn.

Within that, net revenues in institutional securities rose 5% to $4.9bn.

But they were broadly flat in wealth management, at $6.6bn, and investment management, at $1.5bn

Charges also rose sharply, by 10% to $535m. That included a $286m settlement agreed with regulators, following a lengthy investigation into the bank's handling of large stock trades, and $249m in legal charges.

In the full year, net revenues rose to $54.1bn from £53.7bn, while net income fell to $9.1bn from $11bn.

Ted Pick, chief executive, said: "In 2023, the firm reported a solid return on tangible common equity against a mixed market backdrop and a number of headwinds.

"We begin 2024 with a clear and consistent business strategy and a unified leadership team We are focused on achieving our long-term financial goals and continuing to deliver for shareholders."

Ted Pick, who most recently ran investment banking and trading at Morgan Stanley, took over from long-term chief executive James Gorman on 1 January.

Gorman, who announced he was stepping aside to become executive chair last year, led the bank for nearly 14 years and helped refocus it on wealth management.

Pick, 55, has been with Morgan Stanley for around 30 years.

Shares in Morgan Stanley fell 3% as trading got underway on Wall Street.