Morgan Stanley's (MS.US) revenue in Asia approached a record $10 billion last year, prompting the firm to increase the overall bonus pool for its regional bankers by approximately 20%, according to informed sources. The revenue surge was primarily driven by better-than-expected performance in equity trading, prime brokerage, and wealth management operations, the sources indicated. The investment banking and capital markets division also regained growth momentum, with fees from equity issuance and mergers & acquisitions businesses nearing $1 billion, reaching their highest level in years. The record-breaking performance in Asia translated into substantial bonus rewards for traders and bankers. Overall, employees in the investment banking division saw their bonuses increase by 15% to 20% last year, while traders and product specialists in the institutional equities unit received even larger hikes, with top performers seeing bonuses rise by at least 30%. Managing directors who excelled in high-growth areas such as country-specific banking and technology are expected to receive total compensation, including bonuses, ranging from $2 million to $2.5 million, the sources said. This stands in stark contrast to 2024, when approximately one-fifth of managing directors received no bonus at all, whereas average compensation now reaches $1 million to $1.5 million. Morgan Stanley's Asian revenue for 2024 was $7.64 billion, accounting for about 12% of the firm's global total revenue. This marks the third consecutive year the company has outperformed its long-time rival, Goldman Sachs Group, in Asian results. Gokul Laroia, CEO of Morgan Stanley Asia Pacific, stated in a rare interview last year that the goal was to achieve $10 billion in revenue within five years. Buoyed by strong trading momentum in the fourth quarter, this target is now significantly closer to being achieved ahead of schedule. Revenue from Asian operations, including Japan and Australia, grew 29% to $7.27 billion in the nine months ending last September. This growth mirrors a global revenue surge, as equity traders significantly outperformed expectations against a backdrop of ongoing market volatility fueled by Trump administration policies. The bank is scheduled to report its full-year 2025 results on Thursday, making it one of several Wall Street institutions releasing earnings this week. Despite the record performance in Asia, Morgan Stanley has maintained a cautious approach towards significantly raising bonuses, aiming to smooth out compensation expenses. Other sources noted that factors such as a rising stock price and a large cohort of junior employees have tempered the overall growth of the bonus pool. Reportedly, around 26 bankers and employees in Morgan Stanley's Asia Pacific region were promoted to managing director this year, spanning departments including equities, investment banking, and fixed income.
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