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Morgan Stanley details goals in fixed income

  • Morgan Stanley (MS -1.2%) brings forward by two years to the end of this year the date by which it expects to hit a target of $180B of risk-weighted assets in fixed income. Fixed income has been a unit showing particular weakness at Morgan (and the other investment banks), with a Q4 profit decline of 70% Y/Y, but the unit remains a "core part" of the bank's business, says CFO Ruth Porat, speaking on a conference call.
  • The bank currently has a modest target of 10% ROE for the unit, and Porat says a number of products already have returns well in excess of that figure.
  • As for the ongoing rout in emerging markets, Porat says the risk to Morgan is "limited." Responding to a question about $4B of exposure to Brazil, Porat points out that exposure "is very short-dated and liquid."
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