Morgan Stanley is looking very boring. And Ted Pick, its new boss, couldn't be prouder.
In his first quarterly earnings report to investors on Tuesday morning, the new chief executive officer began his presentation with charts that show "15 years of transformation" for the firm. From 2009 to 2014, this firm's revenue and profit mostly came from its Wall Street side. That became closer to an even split from 2015 to 2019, though its institutional securities half still made more money from 2020 to 2022.
Not anymore. The wealth and investment management units were responsible for 58% of the firm's revenues in 2023, an $8.6 billion gap over the investment bank. And those stable businesses delivered 62% of profits last year.
The irony is that Pick rose to the top job through the Wall Street unit that's now the smaller piece of the firm. But it reflects James Gorman's 14-year effort to make the bank more predictable after it almost collapsed in the 2008 financial crisis.
"My hope and expectation is to hand over Morgan Stanley, with as clean a slate as possible, and deal with a few of our outstanding issues in the next couple of months," he said on last quarter's earnings call, when he was running the show. "I'm very excited."
Morgan Stanley's closest rival is following suit in some ways. Goldman Sachs Group Inc. touted its progress in ditching investments made with its own money and instead attracting fee-earning client funds.
"This was a quarter for both Goldman Sachs and Morgan Stanley that was characterized by small, incremental changes," said Octavio Marenzi, CEO at consultancy Opimas. "These were results that underlined the stability of these two institutions and were, frankly, a bit boring."
