Morgan Stanley (MS.US) reported record revenue in Japan, driven by growth in stock and bond trading. According to filings, revenue at Morgan Stanley MUFG Securities rose 13% to 135.8 billion yen ($923 million) in the year ending March 2024, the highest level since the company was founded in 2010 and the second consecutive year of record revenue performance.

Alberto Tamura, chief executive of Morgan Stanley MUFG Securities, said in response to a query about the results that the bank was “committed to helping global and Japanese investors” expand its activities in Japan. He said the end of deflation, corporate governance reforms and structural changes were “finally bearing fruit” to boost the Japanese economy.

The bank's net profit rose 0.4% to 32.7 billion yen, the highest in 11 years, outperforming other major global banks that also ended their fiscal year in March. BNP Paribas' brokerage profit in Japan fell 33% to 21.2 billion yen due to rising costs. JPMorgan's Japanese securities profit fell 32% to 18.8 billion yen. Representatives for JPMorgan and BNP Paribas declined to comment on the results.

Until earlier this year, record gains in stocks had boosted financial institutions trading, while the Bank of Japan's shift to tightening policy largely benefited its bond market operations. Japanese stocks are showing signs of recovery after a sharp sell-off earlier this month, partly due to concerns about more hawkish policies, and bulls are also focusing on improving corporate profits.

In addition, among the foreign banks' securities subsidiaries in Tokyo in the fiscal year ending December 31 last year, Goldman Sachs Group had the highest profit due to its better returns from fixed-income trading.

Hideyasu Ban, an analyst at Bloomberg Intelligence, said earnings among foreign banks may be uneven, in part because individual banks have some power to decide how much of their global business profits to book in each geographic region.

Morgan Stanley MUFG Securities is one of two securities joint ventures formed by Mitsubishi UFJ Financial Group after it invested $9 billion in the U.S. bank at the height of the global financial crisis. The company reorganized parts of its securities business this year with the goal of surpassing Nomura Holdings, Japan's largest brokerage. However, that goal recently suffered a setback when the bank was fined by regulators for violating client confidentiality.

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