Morgan Stanley and Bank of America were the latest major banks to report solid earnings on Wednesday, although both firms reported a smaller increase in spending than peers like JPMorgan Chase and Goldman Sachs, which faced rising compensation costs.
Unlike many of its peers, Morgan Stanley kept compensation expenses largely under control, which came in below analysts’ estimates and were flat from a year earlier at $5.49 billion.
Bank of America, meanwhile, saw noninterest expenses rise slightly to $14.7 billion — up 6% from a year ago — on higher pay for employees.
Both firms bucked the trend somewhat with their fourth-quarter earnings on Wednesday, with spending slower than rival banks, some of which announced skyrocketing compensation costs.
Goldman Sachs said Tuesday that total operating expenses rose to $7.27 billion in the most recent quarter, up 23% from a year ago, thanks to “significantly higher” pay for bank employees — with compensation costs rising solely due to “wage inflation.” Up 31% to $3.25 billion.
JPMorgan Chase reported last Friday that spending rose 11% to $17.9 billion.
Citigroup, meanwhile, saw profits fall sharply — net income fell 26% in the fourth quarter while operating expenses rose 18% year over year to $13.5 billion amid “competitive pressures” on wages.