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The bank’s third-quarter costs were less than 79% of its revenue, excluding higher-than-normal litigation expenses, Porat, 55, said Friday on a conference call. The firm earlier this year set out a goal of cutting annual expenses by $1.6bn, which implied an expense ratio of 79%.
'We’ve achieved it, but we’re only partially the way through executing it', Porat said. 'The math would say that we’re there, but we are continuing to execute on the programs that we identified back at the end of 2012, so we’re feeling very good about our ability to continue to reduce the expense base'.
'There is a culture of expense management across the firm that we haven’t seen for a long time', CEO James Gorman said. 'Whenever I travel around the world, local offices, sub-business groups, everybody understands the program, everybody understands what we’re doing'.
Bloomberg also reports that Morgan Stanley’s total compensation cost was enough to pay each of the firm’s 56,101 employees $219,051 on average for the nine months, more than the $207,688 it set aside for each of the 57,726 employees a year earlier, figures released Friday show.
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