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Morgan Stanley boosted both its short- and long-term operating targets on Wednesday after coronavirus-induced volatility in financial markets helped the Wall Street bank post a quarterly profit that sailed past estimates.

The company also confirmed plans to buy back US$10-billion of shares this year, more than three times the figures announced by its retail banking peers, as it wrapped up results for U.S. lenders, which pointed to a modest rebound in the economy.

“We are in the growth phase of this company for the next decade,” Morgan Stanley chief executive officer James Gorman told analysts on a conference call.

Morgan Stanley increased its two-year target for return on tangible equity between 14 per cent and 16 per cent, from an earlier forecast of 13 per cent to 15 per cent. The metric measures how well a bank is using its capital to produce profit.

The company also raised its longer-term target for the same metric to more than 17 per cent, from its previous outlook of 15 per cent to 17 per cent.

“If we’d said to you three years ago, our aspiration was to have a 17-plus ROTCE, you would have thought we’re off the planet,” Mr. Gorman said, responding to one analyst, who commented that the target looked conservative.

Mr. Gorman’s comments came after high trading volumes during the final quarter of 2020, stemming from the U.S. elections and the release of coronavirus vaccines, benefited Morgan Stanley’s trading unit, which is housed within the institutional securities business.

The bank’s revenue from sales and trading rose to US$4.22-billion from US$3.19-billion a year earlier.

Net revenue rose to US$13.64-billion from US$10.86-billion last year, while revenue from the company’s investment banking division rose to US$2.30-billion from US$1.58-billion.

Mr. Gorman has, however, been taking steps to insulate the bank from its reliance on trading, and engineered two large back-to-back acquisitions, those of Eaton Vance and E*Trade, to bolster its investment management and broking arms.

Morgan Stanley’s equity underwriting revenue soared 81 per cent from a year earlier, driven by high-profile initial public offerings and follow-on offerings as clients continued to access capital markets.

Morgan Stanley was among underwriters for IPOs of companies including Airbnb Inc., gaming firm Playtika Holding Corp., fintech startup Affirm Holdings Inc. and cloud-based data warehouse firm Snowflake Inc.

“The environment is clearly exceptional, and we are not counting on it to persist in our forward estimates. Nevertheless, there is nothing not to like in these results,” Oppenheimer analyst Chris Kotowski said in a note.

The bank’s shares, which rose about 34 per cent in 2020, hit their highest level in more than 20 years in early trading.

Morgan Stanley’s most comparable rival, Goldman Sachs Group Inc., on Tuesday posted a blockbuster fourth-quarter profit that dwarfed Wall Street estimates, but executives warned that capital markets activity fuelling results lately will probably slow down.

Morgan Stanley reported a net income applicable to common shareholders of US$3.27-billion, or US$1.81 per share, in the fourth quarter ended Dec. 31, compared with US$2.09-billion, or US$1.30 per share, a year earlier.

Analysts had expected a profit of US$1.27 per share, according to Refinitiv IBES data.

Fourth-quarter return on tangible equity came in at 17.7 per cent, compared with 13.0 per cent last year and 15.0 per cent in the third quarter.

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