Gorman can't wait to have less capital
Morgan Stanley's third quarter earnings were mostly strong, but CEO James Gorman is looking forward to the day when regulatory focus shifts from leverage to capital
Morgan Stanley CEO James Gorman kicked off his third quarter earnings call on Thursday after hold music that had veered wildly from funk to orchestral, and he sounded upbeat after what he described as strong results.
The firm's wealth management business was now powerful, with $2.6 trillion of assets and annualised revenues of about $17 billion. Margins there were at historic highs. But he still saw several avenues for growth, particularly in capturing some $4 trillion of assets "held away", meaning those held at competitors by existing clients of Morgan Stanley.
He was particularly heartened by growth in Asia, and also noted that now that the business was stabilised within the firm, "every incremental dollar of revenue is at a higher margin than the existing business".
The institutional securities group (ISG), Morgan Stanley's investment banking and capital markets operation, had proved to have a resilient mix, he said, against what had been a difficult trading environment.
It has posted $5 billion of revenues for the fifth time in the last seven quarters.