Morgan Stanley (NYSE:MS) reported a decrease in profits by 8% to $2.4 billion, or $1.38 per share, on revenues of $13.3 billion for the third quarter of 2023, surpassing Wall Street's expectations amidst a challenging macroeconomic environment. The announcement on Wednesday marked the end of the earnings season for major lenders, following a subdued performance in investment banking from five other banks.
Despite the profit drop, CEO James Gorman highlighted the firm's robust Return on Tangible Common Equity (ROTCE) of 13.5%. The results echoed positive earnings reports from peers including JPMorgan Chase (NYSE:JPM), Bank of America (NYSE:BAC), and Goldman Sachs (NYSE:GS) who faced similar macroeconomic headwinds.
Optimism for an impending turnaround was hinted at by the head of investment management at Morgan Stanley, Daniel Simkowitz, who projected an improved outlook for 2024 and a "sustainable recovery" at a recent conference. Goldman Sachs' CEO David Solomon also anticipates an improving banking sector and a resurgence in deal-making in the coming years.
In addition to the earnings report, speculation continues over who will succeed Gorman following his announced departure. Potential candidates include Simkowitz, Ted Pick, and Andy Saperstein. A call with analysts to discuss these matters is scheduled for 08:30 a.m. ET on Wednesday.
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