Pandemic profiteer: Morgan Stanley makes a killing during coronavirus crisis

Morgan Stanley managed to substantially capitalize in 2020. The US investment bank beat fourth-quarter earnings forecasts to round off the lender’s best year on record.

Earnings jumped 51 percent in the final three months of the year. The Wall Street bank’s net income applicable to common shareholders surged to $3.39 billion, or $1.81 per share, in the fourth quarter against $2.09 billion, or $1.30 per share, a year earlier.

Analysts had forecasted a profit of $1.27 per share, according to Refinitiv IBES data.

Morgan Stanley confirmed plans to buy back $10 billion worth of its shares this year. The bank’s shares rose 2.5 percent to $76.88 in premarket trading, the highest since late 2000.

“We saw exceptional support from central banks and strong fiscal policy supports during the health crisis. We supported our clients and were extraordinarily active, and very disciplined around our risk, and that led to record results,” said chief financial officer Jon Pruzan.

Revenue from the institutional securities business, its largest source of income, rose to $7 billion from $5.05 billion recorded a year ago.

Morgan Stanley’s trading unit, which is housed within the institutional securities business, benefitted from the US elections and the release of coronavirus vaccines across the world, which boosted high trading volumes during the last quarter of 2020.

Net revenue grew to $13.64 billion versus $10.86 billion last year. Revenue from the company’s investment banking division advanced to $2.30 billion from $1.58 billion in 2019, while revenue from sales and trading rose to $4.22 billion from $3.19 billion.

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