La US quarterly season continues with two bigwigs of the banking sector: Morgan Stanley and Bank of America. Both companies closed the fourth quarter of 2021 with results above expectations, a result that immediately attracted the attention of Wall Street investors. After yesterday's crash, the titles try to rebound and within minutes of the opening of Wall Street they are gaining more than 3,5%.
In detail, Morgan Stanley closed the last quarter of 2021 with earnings per share of 2,01 dollars, up from 1,81 a year earlier and higher than the 1,91 expected by market consensus. Revenues increased 6,6% to $14,5 billion, slightly below the $14,6 billion market expectation. In the'whole 2021, turnover rose 23% to $59,8 billion, a record level, while net profit rose 37% to $15 billion, with a return on tangible capital of 19,8%. As for capital solidity, the Cet1 ratio is 16%.
“2021 was an exceptional year for our group – commented the president and CEO James P. Gorman -. We have achieved record net revenues with extraordinary results in every area of the business”. “Wealth management – she added – has increased client assets by almost a trillion dollars to 4.900 billion, with 438 billion of net new assets'. Gorman also noted that 'the integrated investment bank has continued to gain share'.
During the quarter, the bank repurchased $2,8 billion of stock under the buyback program. The board of directors approved the distribution of a quarterly dividend of $0,7 per share.
Moving on to Bank of America, the charlotte institute closed the fourth quarter with net income of $7,013 billion, 82 cents per share, up 28% from $5,47 billion, 59 cents per share, in the same period in 2020. Analysts had expected profits of 76 cents. In the same period, revenues grew 10% to $22,1 billion, broadly in line with forecasts.
In 'whole 2021 Bofa almost doubled its net profit, which rose from 17,894 billion in 2020 to 31,978 billion in 2021, while overall revenues increased from 85,52 to 89,113 billion.
“The fourth quarter results were supported by strong organic growth, record levels of digital engagement and an overall improvement in the economy. We increased loans by $51 billion and added $100 billion in deposits during the quarter, further strengthening our position as the leader in retail deposits,” he said. CEO Brian Moynihan.
Going back to the quarter, in the last three months of last year, net interest income was up 11% to $11,4 billion, thanks to solid growth in deposits (+16%) and the investment of excess cash. Non-interest income increased 8% to $10,7 billion, driven in particular by record asset management fees and strong investment banking revenues. Average loans rose to $945 billion, while average deposits increased to $2.000 trillion. The Cet1 ratio stood at 10,6%.
Last year, the bank returned $31,7 billion to shareholders, including dividends and share buybacks.
