Morgan Stanley’s fixed-income trading unit offers opportunities on its own merits and isn’t being propped up by more profitable businesses, Chief Financial Officer Ruth Porat said.
Bloomberg News reports that Porat said on a conference call with bond investors Friday: 'We are not looking at fixed-income as being subsidized by the other businesses, we look at it as a strong business on its own, one that is supportive of the balance of the firm',
CEO James Gorman has set goals for reducing the amount of capital the fixed-income unit requires and boosting its return on equity to 10%, which the firm has said is its cost of equity. Bond-trading revenue dropped in each of the last four years, raising questions about whether Gorman, 55, should shrink the business further.
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