Morgan Stanley’s Asia Chief Sets Eyes for $10 Billion Revenue By 2030

After Morgan Stanley topped its arch-rival Goldman Sachs Group for the third consecutive year with a record income of $7.64 billion, the bank’s Asia chief aims for $10 billion. 

As the US-China trade war heats up, Dan Simkowitz, co-president of Morgan Stanley, visited Beijing as the bank sought to come back in the region after several challenging years sparked by the Chinese recession that had hammered international banks.

After Morgan Stanley topped its arch-rival Goldman Sachs Group for the third consecutive year with a record Asia income of $7.64 billion, the bank’s Asia chief, Gokul Laroia, aims for $10 billion in the next five years. 

The bank is counting on growing trading and investment banking projects. A Chinese business that is gradually rebounding even as trade tensions rage will benefit from a growing presence in Japan and India.

The goal of generating that revenue is demanding. A weak economy and strong local competitors have made it challenging for international banks to make a profit on the Chinese mainland, even after investing billions. The bank also faces intense competition in Japan, where the income of many global companies has declined.

Chief Executive Officer Ted Pick pointed out to Chief Gokul Laroia the strength of Asian stocks and how they contribute to global income. Similar to its largest US competitors, Morgan Stanley’s stock division is the backbone of Asia, and its growth is increasing Greater China’s revenue share to about half of the region’s total.

Japan delivers 20-25%, India contributes 10%. The bank’s Asian income exceeded Goldman‘s in the first quarter.

Despite the income increase, Wall Street companies have had difficult years since China’s financial opening at the beginning of the decade. As total Asia income declined until 2024, the bank reduced more than 120 investment banking positions, mostly in China.

Now, a fresh batch of China-US tensions is restricting growth prospects for investment banks.

When Chinese equities crashed earlier due to US President Donald Trump’s tariffs shocks, the top hedge fund manager drew experience from significant economic meltdowns (the Asian financial turmoil, global financial crisis, and Covid pandemic) and suggested reducing long-term investments in China and avoiding complicated positions to maintain liquidity.

The hedge fund manager claimed that Morgan Stanley has made a conscious decision to diversify its product offerings across Chinese companies to counter the downturn in deals, which enables the bank to charge premiums in illiquid markets.

The sales and trading business is also expanding as a wide range of international investors and a constantly growing pool of local capital are trading these markets more actively than in the past.

As the Japanese economy is recovering from decades of stagnation, Morgan Stanley is counting on it for growth. The company has strengthened its 17-year relationship with its biggest shareholder, Mitsubishi UFJ Financial Group Inc (MUFG). In addition to banking and trading, it combined research with MUFG to compete with local companies and increased its coverage of mid and small-cap Tokyo stocks by two-thirds to more than 500 names.

The company has launched foreign exchange capabilities to help investors with currency trading and hedging in India. It was a pioneer in the special economic zone, GIFT City, which aims to draw international customers wanting regulatory and tax certainty while trading Indian stocks.

It also faces competition from Goldman, JPMorgan Chase & Co., and other companies that are stepping up their efforts in India to chase deals and expand their corporate loan and flow businesses. Investment banking in India is a low-margin industry despite an increase in transactions. So, the bank is careful about accepting fee-paying customers.

Although Morgan Stanley has a large market share in Singapore and Hong Kong, it has not yet expanded into significant markets like Japan and India. It is also uncertain about whether it can apply its US mass-wealth strategy there.