10:22 AM EST, 01/16/2025 (MT Newswires) -- Morgan Stanley ( MS ) reported better-than-expected fourth-quarter results on Thursday, buoyed by its investment banking business, which reflected increased deal activity and initial public offerings.

The lender's earnings jumped to $2.22 for the December quarter from $0.85 the year before, surpassing the FactSet-polled consensus of $1.68. Revenue climbed 26% to $16.22 billion, topping the Street's view for $15.03 billion. Shares of the company increased 2% in Thursday trade.

"The fourth quarter was a top line record with the highest earnings per share in over 15 years," Chief Executive Ted Pick said during a conference call, according to a FactSet transcript. "The results reflect consistent, durable earnings across the firm, evidencing that Morgan Stanley ( MS ) can deliver during this period of continued macroeconomic and geopolitical uncertainty."

In the bank's institutional securities division, revenue advanced to $7.27 billion from $4.94 billion in the prior-year quarter. Investment banking revenue advanced 25% to $1.64 billion amid higher advisory revenue tied to completed merger and acquisition transactions. Equity underwriting revenue rose on higher follow-ons and increased IPO activity, according to the company. Fixed income revenue grew 35% to $1.93 billion.

The wealth management business logged a revenue gain of 13% to $7.48 billion, reflecting higher asset levels and transactional revenue. Within the division, net interest income edged higher to $1.89 billion from $1.85 billion.

Investment management revenue was up 12% to $1.64 billion as total client assets across wealth and investment management grew to $7.9 trillion "supported by markets and healthy net new assets," Pick said in a statement. Within investment management, assets under management reached $1.666 trillion, compared with $1.459 trillion at the end of 2023.

Morgan Stanley ( MS ) doesn't expect its net interest income in the ongoing quarter to "fluctuate materially" from the previous three-month period, based on "a more stable deposit mix, higher lending balances and the rate outlook," Chief Financial Officer Sharon Yeshaya said on the call.

The Federal Reserve has signaled a more cautious approach to interest rate cuts after shaving 100 basis points off the policy rate since September. The market is widely predicting that the central bank's monetary policy committee will keep rates unchanged on Jan. 29, according to the CME FedWatch tool.

"Looking ahead to 2025, our M&A pipelines are healthy and diversified, outpacing recent years," Yeshaya told analysts. "Our business is well positioned for strong continued rebound in dealmaking activity."

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