American investment bank Morgan Stanley (MS) has reported a profit decline in the fourth quarter of 2023 due to a one-time charge of $535 million U.S. that it incurred.
The bank reported earnings per share (EPS) of $0.85 U.S., which was below consensus forecasts of $1.01 U.S.
Revenue in the quarter totaled $12.90 billion U.S., which topped Wall Street estimates of $12.70 billion U.S.
Morgan Stanley said its Q4 profit was hurt by a special assessment fee it had to pay to the U.S. Federal Deposit Insurance Corporation (FDIC) to replenish a fund that was depleted by $16 billion U.S. last year after the collapse of several regional lenders.
Morgan Stanley said it paid the FDIC $286 million U.S. in special assessment fees and $249 million U.S. in legal charges during Q4 of last year.
At the same time, the bank noted that mergers and acquisitions (M&A) activity fell to its lowest level in 10 years globally in 2023, further hurting its profits.
Overall, Morgan Stanley's investment banking revenue rose 5% in Q4 compared to a year earlier, helped by some initial public offerings (IPOs) held at the end of 2023.
Earlier in January, Morgan Stanley agreed to pay $249.4 million U.S. to end long running criminal and civil investigations into its handling of large stock trades.
This was the first earnings report under Morgan Stanley’s new chief executive officer (CEO) Ted Pick, who succeeded James Gorman at the start of this year.
Morgan Stanley’s stock has declined 8% over the last 12 months to $89.70 U.S. per share.
