The numbers: Messy. Results suffered because the firm set aside $1.2 billion in reserves to pay for litigation related to financial crisis-era mortgage bonds. Those legal costs and an accounting adjustment muddied an otherwise good performance for the firm. Revenues of $7.8 billion were up 11% from a year ago. That’s good a thing. But in reality, accounting for the legal expenses and other charges, fourth quarter profits fell 71 percent from $192 million,or 7 cents a share, compared to $661 million, or 33 cents a year earlier.
The numbers: Messy. Results suffered because the firm set aside $1.2 billion in reserves to pay for litigation related to financial crisis-era mortgage bonds. Those legal costs and an accounting adjustment muddied an otherwise good performance for the firm. Revenues of $7.8 billion were up 11% from a year ago. That’s good a thing. But in reality, accounting for the legal expenses and other charges, fourth quarter profits fell 71 percent from $192 million,or 7 cents a share, compared to $661 million, or 33 cents a year earlier.
The takeaway: Morgan Stanley $MS may be the biggest question mark on Wall Street. A global financial institution run by Australian-born James Gorman, the firm is the smallest of the big banks. As a result, it’s considered the most vulnerable to big swings in financial markets. To insulate
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What’s interesting: A big bright sport for the bank is its wealth management unit. Morgan Stanley bought the the business, then known as Smith Barney, from Citigroup $C during the financial crisis. The brokerage unit has been generating profit margins, a measure of return, of nearly 20%.
