You'd have to say if you were Wells Fargo or Citigroup, for example, that Morgan Stanley has it pretty good. It's the top of the trading pile and even managed to make record earnings per quarter at the height of the coronavirus pandemic. Sure, there are the occasional setback, like a $ 60 million fine to mess up asset management data center shutdowns, whatever that means, but as Jamie Dimon or Mike Corbat might tell you (the latter if he's still paying attention). that is, things could be a hell of a lot worse.
However, CEO James Gorman is not the one happy with the success, and by and large, he would rather run a completely different bank. Having just achieved a career-long ambition to buy an online retail brokerage and employee stock option business, Gorman dumps another $ 7 billion to move his white-shoe wall power broker into a nice, secure broker transform. boring little shop on Main Street.
"We wanted to make sure that Morgan Stanley is stable in the water in very difficult times," Gorman said in an interview with analysts on Thursday. "A decade ago, our wealth management and wealth management businesses were bright, but they weren't big enough, they weren't big enough to provide real stability for the rest of the company."
Mr Gorman hopes that expanding these businesses even further will convince analysts to view his company less as an investment bank and more as Charles Schwab, who, despite his reputation, doubles many times that of Morgan Stanley and Goldman with roughly 20 times the profit .
If Morgan Stanley's multiples rise halfway to Schwab's, the bank's stock should be worth twice what it is today. The managing director. acknowledged that repetition like this is challenging: "I hope it happens in my career, let alone in my life."
Morgan Stanley to buy Eaton Vance for $ 7 billion (WSJ)
With a $ 20 billion deal this year, Morgan Stanley is farther from risky Wall Street (CNBC).
Morgan Stanley's Makeover (DealBook)
Morgan Stanley finds money in the pillow (WSJ)
Morgan Stanley fined $ 60 million for failure to monitor data center (Bloomberg)