Morgan Stanley’s wealth management arm has reported pre-tax income from continuing operations of $1.2bn for the fourth quarter of 2017, a surge of 29% compared with $891m a year ago.
For the quarter ended 31 December 2017, the division’s net revenues were $4.4bn, up 10% from $4bn in the corresponding quarter of last year. Pre-tax margin was 26%.
The unit’s asset management fee revenues increased to $2.5bn from $2.2bn a year ago. Transactional revenues rose to $790m from $774m a year ago.
The unit’s quarterly net interest income rose to $1.1bn from $984m in the fourth quarter of 2016.
As at 31 December 2017, total client assets stood at $2.4 trillion and client assets in fee-based accounts stood at $1 trillion.
The banking group said that the unit’s 15,712 wealth management representatives generated average annualised revenue per representative of $ 1.1m in the quarter. Wealth management client liabilities were $80bn, as against $73bn in the previous year.
Overall, the banking group posted net revenues of $9.5bn for the fourth of 2017, compared with $9bn in the corresponding year ago quarter.
However, net income dipped 59% to $686m from $1.66bn a year ago due to a one-time charge of $1.2bn related to the US tax law changes.
Morgan Stanley chairman and CEO James Gorman said: “Over the course of the full year we achieved the strategic objectives outlined two years ago. In 2017, pre-tax earnings grew by 18%, driven by a 10% increase in revenues, with growth across all our business segments. This, coupled with strong expense discipline demonstrates the Firm’s operating leverage. We enter 2018 with strong momentum aided by rising interest rates, tax reform and an evolving regulatory framework.”