US investment banks have benefited from a healthy cycle. Low interest rates boosted M&A activity and sustained the dynamism of the financial markets.

Morgan Stanley has doubled its sales - from $26 billion to $53 billion - between 2012 and 2022. Net income is now in double-digit territory, and in terms of profitability the bank is on a par with Goldman and JPMorgan.

This track record owes much to James Gorman's strategy, which is largely focused on developing the asset management business. More profitable than the investment banking business, it now accounts for half of Morgan Stanley's profit, compared with less than a quarter when Gorman took the helm in 2010.

Appointed last autumn, his successor Ted Pick - a Morgan veteran with 33 years at the helm - will no doubt find it difficult to repeat such a performance. The markets are at the top of the cycle, and it's a safe bet that rates will be higher over the next decade than they have been over the last.

In this respect, Gorman's ambitions to reach $20 trillion in assets under management in ten years' time - compared with $6.5 trillion today - seem quite audacious. As for the investment banking business, there are already clear signs of a downturn, both at Morgan Stanley and among its peers.

Over the past two years, the bank has returned more capital to shareholders - over $15 billion a year, mainly through share buy-backs - than its nemesis Goldman Sachs, and more than its actual profits. Some suggest that Gorman intends to bow out on a high note.

However, it is not certain that such largesse is sustainable. That's what the market seems to think: after a record year in 2023, share valuation multiples are heading back towards their historical averages for the years 2024 and 2025.