Morgan Stanley stunned the markets with its fiscal final quarter profits. Just when the smart money was predicting a nominal profit fall, the firm comes in with a 49% rise in the numbers.
OK, so there was the small matter of a one-time tax benefit of some $280m. Nevertheless, Morgan Stanley's quarterly profit of $1.79bn outstripped even Goldman ($1.6bn). All of a sudden, John Mack is a hero again. And who said he wasn't worth an $11.5m bonus for 5 months work ?
The firm's institutional securities division brought home the bacon in the period. Trading revenues were 68% higher than in the final quarter 12 months ago. Underwriting revenues came in at $623m, the second highest quarter ever. Advisory revenue came in at $479m, the highest total for 5 years!
Mack said that the firm 'achieved record revenues for 2005 and record earnings for the fourth quarter. Through focus and commitment, the people of Morgan Stanley have delivered two straight quarters of improving results'.
By any standard, it was a good job.