Morgan StanleyBank of America's new CEO Ted Pick on Thursday expressed confidence that his bank will meet its financial goals of $10 trillion in customer assets and a 20% return.
Pick, a three-decade Morgan Stanley veteran who took over this month, said he has three priorities: sticking to the strategy laid out by his predecessor James Gorman, maintaining the bank's culture and achieving its goals.
“Ten trillion dollars in wealth and asset management is coming,” Pick said in an interview with CNBC at the World Economic Forum in Davos, Switzerland. “We are going to get there and achieve 20% returns. That's it: 10 and 20. It will take some time, but I am very optimistic.”
Pick's predecessor guided Morgan Stanley after the 2008 financial crisis that nearly sank the investment bank. Gorman transformed the firm into a wealth management giant through a series of smart acquisitions, while helping to rehabilitate trading firms for a new era on Wall Street.
The shift toward wealth management boosted Morgan Stanley's valuation well beyond its rivals, including Goldman Sachs, but more recently concerns about the growth of that business have stymied the stock. The bank's shares are down 12% in the last year.
“Part of the reason the boss was so successful is that he guided the place toward a long-lasting narrative instead of the choppy, unpredictable Morgan Stanley,” Pick said.
The company's “secret sauce” is combining a leading investment bank with its wealth management operations, he added.
“The name of the game is to balance realistic expectations and build credibility, but let people understand that we have a lot of confidence that both pieces will grow,” Pick said. “The ecosystem of being a leading wealth manager, banking individuals, not institutions, and then also covering them like an investment bank or covering the risk like a trading house, is unique.”
What may help this year is an expected rebound in corporate mergers and related activities after more than a year of depressed volumes, Pick said. A backlog of deals has been building since before the Covid pandemic began in 2020, she said.
“There's a lot of activity,” Pick said. “I think once people start getting going, we'll see a lot of that.”
The U.S. economy is “probably past peak inflation” and “it's not inconceivable” that the Federal Reserve could be forced to cut rates faster than expected due to weakening data, Pick added.
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