Morgan Stanley has long been dubbed Wall Street’s “smallest big bank”. This moniker needs updating. During the pandemic, the investment bank led by James Gorman vaulted past both Goldman Sachs and Citigroup in market valuation.
Expect the divergence to widen further. In a tough quarter, when rivals’ bottom lines were hit by the collapse in investment banking revenues and tougher comparatives, Morgan Stanley has outshone peers.
The firm cranked out $14.8bn in revenue during the first three months of 2022. That makes it Morgan Stanley’s second-best quarter ever, behind last year’s blowout first quarter. Net profits — down 11 per cent — compare favourably with 42 per cent declines reported at both JPMorgan and Goldman. Morgan Stanley’s tangible return on equity of 19.8 per cent is now the highest among the big Wall Street banks.