Ahead of James Gorman’s takeover of the CEO position on Jan 1, 2010, Morgan Stanley (MS) on Tuesday shuffled its top management roles. The change includes naming of heads of its core securities business and a new finance chief. Colm Kelleher, CFO and head of global markets, and Paul Taubman head of investment banking, will take over as co-presidents of institutional securities.
At the same time, Mitch Petrick will step down as head of the bank’s sales and trading unit. Ruth Porat, the head of the firm’s financial institutions group, will succeed Mr. Kelleher, becoming one of the top women in investment banking. Thomas Nides, who currently serves as chief administrative officer, will take additional responsibilities as the firm’s chief operating officer.
Jim Rosenthal, who currently serves as head of technology and operations, will serve as chief operating officer of the newly formed Morgan Stanley Smith Barney that the company bought from Citigroup (C). Rosenthal will also serve as head of corporate strategy for Morgan Stanley.
Morgan Stanley reported third-quarter 2009 income of $498 million or 38 cents per share, compared with a loss of $159 million or $1.37 per share in the prior quarter and an income of $7.7 billion, or $7.38 per share a year ago. The results were much ahead of the Zacks Consensus Estimate of 30 cents per share. The results marked the first quarter of income in a year’s time.
Results were aided by robust underwriting revenues in the investment banking operation resulting from higher levels of market activity, strong growth in fixed income sales and trading, commodities, prime brokerage and wealth management business, which offset losses in commercial real estate.
Unlike the preceding quarters, the results were in line with strong results from competitors like Goldman Sachs (GS) and JPMorgan Chase & Co. (JPM), who have been grabbing market share after the financial crisis. We expect the key management shake-up to be positive for Morgan Stanley to remain profitable, going forward.
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