Spinoff Set by Summer for Discover
He built it. Now he is taking it apart.
John J. Mack, in his boldest strategic move since he became chief executive last year, said yesterday that Morgan Stanley would spin off its slow-growing credit card unit, Discover.
For Mr. Mack, a mastermind behind the 1997 merger with Dean Witter, Discover & Company that brought Discover into the Morgan Stanley fold, the decision is a tacit recognition that the firm’s future success lies with its traditional heart, its lucrative trading and investment banking business.
The results the firm released yesterday underscored that reality. Propelled by trading and banking, Morgan Stanley’s operating earnings rose 26 percent in the fourth quarter, which ended Nov. 30. For the year, earnings rose 44 percent.
Yet while the 2006 profit of just under $7.5 billion was a record for Morgan Stanley, it lagged the $9.5 billion generated by its archrival, Goldman Sachs, whose profit rose 76 percent for the year.
John J. Mack, in his boldest strategic move since he became chief executive last year, said yesterday that Morgan Stanley would spin off its slow-growing credit card unit, Discover.
For Mr. Mack, a mastermind behind the 1997 merger with Dean Witter, Discover & Company that brought Discover into the Morgan Stanley fold, the decision is a tacit recognition that the firm’s future success lies with its traditional heart, its lucrative trading and investment banking business.
The results the firm released yesterday underscored that reality. Propelled by trading and banking, Morgan Stanley’s operating earnings rose 26 percent in the fourth quarter, which ended Nov. 30. For the year, earnings rose 44 percent.
Yet while the 2006 profit of just under $7.5 billion was a record for Morgan Stanley, it lagged the $9.5 billion generated by its archrival, Goldman Sachs, whose profit rose 76 percent for the year.
Read more at: Spinoff Set by Summer for Discover
posted by e-borneo.com @ 7:21 PM
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