By Morgan Stanley's standards it was a fairly unremarkable third quarter: revenues up 3 per cent from a year earlier, net profits up 11 per cent.
But, in one respect, the numbers were striking: yet another bigger haul from trading during the period ($3.1bn) than Goldman Sachs ($2.7bn).
Last year, Morgan Stanley overtook its downtown rival in the business of moving stocks and bonds for the first time since at least 2004, according to net revenue figures tallied by Oppenheimer & Co. And over the first nine months of 2017 it has stretched away further, widening the gap to $1.9bn.
Much of the credit for the revival goes to Ted Pick, a former equities sales and trading head who was appointed to an enhanced role spanning equities and debt just over two years ago.
Since then he has focused on the troubled fixed-income unit, cutting about one-quarter of traders, combining sales teams with equities, shaking up incentive pay structures and trimming product lines such as commodities, European credit and foreign exchange.
In January 2016, the bank told investors that they could expect about $1bn of revenues a quarter from the radically pared-down unit, which had been squeezed by a combination of tighter regulation, a shift to electronic trading and patchy activity among clients.
But now fixed-income has blown through that threshold for six quarters in a row, helping to push the bank's return on equity to within its targeted range of 9-11 per cent.
According to insiders, it is an effort that has put Mr Pick in a strong position to succeed James Gorman, chairman and chief executive of the 82-year-old bank.
That day may not be imminent; Mr Gorman, 59, plans to stay for at least four to five more years, according to people familiar with his plans.
If anything were to happen to him within that timeframe, Colm Kelleher, 60-year-old president and head of the institutional securities and wealth businesses, would be the obvious successor.
But over the longer term, Mr Pick heads a list that includes Jonathan Pruzan, chief financial officer; Dan Simkowitz, investment management head; Andy Saperstein, wealth co-head; and Rob Rooney, head of international.
Rivals have noticed. "He's being groomed, and he's delivering," says one senior trader in New York.
"He's the future CEO, no doubt about it," says another top banker in London. "Unless he shoots himself in the foot."
Mr Pick, 48, joined Morgan Stanley fresh out of liberal arts college in 1990, and spent his formative years in the equity capital-markets division.
Strong influences were Mr Kelleher, a former capital markets chief; Vikram Pandit, the cerebral securities head who went on to run Citigroup; and John Havens, the flashily-tailored, cigar-chomping head of equities.
Sharp and engaging, Mr Pick played a lead role in arranging injections of capital during the crisis from China Investment Corporation and from Mitsubishi UFJ Financial Group. That brought him even closer to Mr Kelleher, who was CFO at the time.
"It's like if Harold Stanley and Henry Morgan had a baby," says one former colleague, alluding to the founders of the bank who split from JPMorgan in 1935. "Ted just epitomises all the things we love about the place; very smart, very client-focused, fiercely loyal, but a fun guy to have around."
In 2009, Mr Pick was assigned to run the equities trading division, which puts buyers and sellers together in the $88tn global stock market, while also handling derivatives, big blocks of shares and relationships with hedge funds.
It was there that he became known for automating processes, says Ian McDonald, Denver-based equity analyst at Janus Henderson, the $345bn-in-assets fund manager.
He notes that Mr Pick is now applying similar skills to a FIC unit which "had been in the doghouse", carrying too much cost and consuming too much capital.
Moving on from stocks is not easy. The list of former equities people in big jobs on Wall Street is short, and includes Garth Ritchie, who runs investment banking at Deutsche Bank, and Tim O'Hara, who ran Credit Suisse's markets business before joining BlackRock as co-head of global credit.
But Mr Pick has already shown versatility in heading a division that accounts for just over a third of group revenues, says George James, a former Morgan Stanley fixed-income head now at Glasshouse Capital in Greenwich, Connecticut.
"If you can master fixed-income and equity, that is a real accomplishment on Wall Street," he says.
Morgan Stanley is not punching the air just yet. After the third-quarter results presentation this week, CFO Mr Pruzan struck a note of caution, telling the Financial Times that the bank wanted to stay "critically and credibly sized" in fixed income, so it can weather even the most subdued conditions.
But for now, at least, edging out Goldman is probably reason enough to cheer.
"You're a rock star, if you pick the right areas to focus on," says one fixed-income head at another big bank. "But if you pick the wrong ones you're at the back of the bus."
Copyright The Financial Times Limited 2017
