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Morgan Stanley, Bank of America Each Break a 5-Year Losing Streak

April 24, 2017

[Photo: BofA CEO Brian Moynihan, Morgan Stanley CEO James Gorman]


How does it feel to get a ‘monkey off your back’? Just ask Morgan Stanley or Bank of America. Each firm reached a milestone in the first quarter of 2017 that they had not achieved since 2011.


  • Morgan Stanley topped Goldman Sachs in revenue from trading bonds, currencies and commodities for the first time since the 2nd quarter of 2011. [Bloomberg]


  • Bank of America added 549 employees in the first 3 months of 2017, snapping 21 consecutive quarters with job cuts.  [Bloomberg]


MORGAN STANLEY BOND TRADERS.    Since overhauling the fixed income division in 2016 – by slashing about 25% of its fixed income sales and trading staff, selling off large chunks of its commodities business and assigning equities executive Sam Kellie-Smith to turn around the business - Morgan Stanley has recorded strong bond-trading revenues in 4 straight quarters. And, in the latest quarter, revenue from trading bonds, currencies and commodities almost doubled to $1.71 billion, which edged out Goldman Sachs’s revenues of $1.69 billion. Morgan Stanley last beat Goldman in that business in the Q2 of 2011, according to Bloomberg News.


What makes the results all the more impressive is that, while Goldman Sachs was the top-ranked commodities trading firm for the past 3 years, Morgan Stanley had fallen into the second tier last year, ranking no higher than 4th among the 12 largest global investment banks.


BANK OF AMERICA JOB CUTS END.    Toward the end of 2011, Bank of America had on hand nearly 289,000 employees and was losing money. CEO Brian Moynihan announced across-the-board cost and job cuts in order to improve profitability. Under his original plan, Moynihan expected to eliminate 30,000 job cuts. However, by the end of 2016, the bank had eliminated over 80,000 positions and head count had fallen to 208,000.


All that changed in Q1 of 2017, when BofA posted earnings that exceed analyst expectations and, instead of more job cuts, the bank added 549 positions. According to Moynihan, customers were expressing more confidence in the economy.