Morgan Stanley's Gorman says bank eyeing $1 billion in FICC trading per quarter

Tue Jun 14, 2016 3:13pm EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Olivia Oran

(Reuters) - Morgan Stanley (MS.N: Quote) is eyeing quarterly revenue of around $1 billion for its fixed income, currencies and commodities trading unit, Chief Executive James Gorman said on Tuesday.

The Wall Street bank is seeing revenues grow in its bond trading business, or FICC, even with reduced headcount, Gorman said, speaking at the bank's U.S. Financials Conference in New York.

Morgan Stanley is targeting $4 billion or more in FICC revenue annually, he added.

"It's not great, I'm not celebrating that ... but that's the kind of threshold we want to get the business to and obviously move it up from that point forward," Gorman said.

Gorman had not previously given investors revenue guidance around the FICC business in the last several quarters.

Morgan Stanley has been focused on rebuilding morale in its bond trading unit and retaining existing employees, he added, after the bank cut 25 percent of its fixed income trading jobs last year.

The firm is trying to move away from volatile businesses like trading to more stable areas such as wealth management. Gorman said Morgan Stanley is finished with major headcount reductions in FICC for the next 12 months. "We aren't in the business of every quarter chopping and changing," he said.

Wall Street firms broadly are struggling with weakness in their fixed income units as regulations have made trading less profitable. Morgan Stanley executives have previously said they believe the pool for fixed income trading has shrunk substantially over the last three years to $100 billion industry-wide from $150 billion to $160 billion in the past.   Continued...

Morgan Stanley Chairman and Chief Executive James Gorman speaks during the Institute of International Finance Annual Meeting in Washington October 10, 2014. REUTERS/Joshua Roberts (UNITED STATES - Tags: BUSINESS) - RTR49Q43