It’s generally been a good quarter to be working for a US bank in Asia, even as Chinese firms continue to threaten their business in the region..
On the back of Citi’s 18% year-on-year increase in Asian first-quarter revenues, Morgan Stanley’s Q1 financial results now reveal a 16% revenue rise in Asia over the same period to $1,351m. As was the case at Citi, Morgan Stanley’s earnings in Asia grew at a faster rate than those in the Americans (13%) or EMEA (15%).
Although Morgan Stanley doesn't break out its Asian income by division, it’s clear from recent league tables that some MS bankers and traders are performing better than others. Here's a guide to the hot and not-so-hot jobs at Morgan Stanley in Hong Kong and Singapore right now.
Western banks in Asia continue to dominate Asian M&A deals, largely because they offer better cross-border expertise than their Chinese competitors. Morgan Stanley is a powerhouse in regional M&A – it ranked second behind Goldman Sachs for Asia (ex-Japan) M&A revenue by bank in the first quarter, according to Dealogic. Perhaps more notably, the US firm was also rated second for China M&A, rising two places year on year to finish ahead of mainland giants CICC and CITIC. Globally, Morgan Stanley’s M&A revenues rose 16% from a year ago, reflecting what the bank described in its Q1 results as “the impact of higher M&A fee realizations”.
Morgan Stanley’s bankers enjoyed a storming first quarter within Asian equity capital markets. In a field that Chinese banks are beginning to control, MS rose 28 places up Dealogic’s Asia (ex-Japan) ECM revenue table year on year to rank second behind Goldman. While the bank doesn’t provide ECM figures for Asia, global income from the function was $421m in Q1, 8% higher than in the first three months of last year, “primarily reflecting higher market volumes”.
It was a much more stressful quarter for those focused on DCM deals at Morgan Stanley. Across the bank, fixed income underwriting revenues fell 2.5% year on year to $518m, “primarily reflecting lower debt issuance volumes”. Asia appears not to have bucked this global trend – Morgan Stanley fell outside the top-10 banks for Asia (ex-Japan) DCM revenue last quarter.
If you were looking to join a dominant player in Asian FICC, you probably wouldn’t choose Morgan Stanley. It ranked as a fourth-tier firm for FICC revenues in APAC last year, according to the most recent figures from data provider Coalition. But its FICC team is performing well globally – fixed Income sales and trading net revenues rose 12% year on year to $1.9bn in Q1.
Hundreds of equites sales and trading jobs at Western banks in Asia have been cut over the past three years, but Morgan Stanley remains a comparatively safe haven. In 2017, it was the second-ranked firm for APAC equities sales and trading, according to Coalition. Last quarter, global equity sales and trading revenues at MS were up 30% to $2.6bn, because of “strong performance across products and regions on higher levels of client activity”.
After several years of stagnating headcount, Morgan Stanley has now become one of the most aggressive recruiters in Asian private banking. Its workforce of relationship managers across the region shot up by 51 year on year to reach 298 in 2017, according to figures published last week by Asian Private Banker. Morgan Stanley has also been recruiting this year, taking on China banker Jeffery Sung from DBS. Wealth management is an expanding part of the firm’s business globally, too. Pre-tax income from the division’s continuing operations was $1.2bn in Q1, a 23% rise over the same quarter last year.