NEW YORK (AP) — Investment bank Morgan Stanley said its fourth-quarter profits rose 9% from a year ago, helped by a big jump in fee revenue from its growing asset and wealth management business. The investment banking division also boosted results, as deal-making on Wall Street continued at a frenzied pace.

The New York-based firm said Wednesday that it earned $3.7 billion in the quarter, or $2.01 a share, up from a profit of $3.39 billion, or $1.81 a share, in the same period a year ago. The results topped analysts’ expectations.

Like nearly every other big bank that’s reported its quarterly results so far, Morgan Stanley faced higher wage and benefit expenses in the quarter. The major banks are all competing for talent, particularly young bankers who can lead the next generation of trading and deal-making, and the banks have been willing to pay handsomely for these employees.

In a call with investors on Tuesday, the CEO of Morgan Stanley’s chief rival Goldman Sachs said that “wage inflation is everywhere” and it would have to keep paying employees higher salaries to keep them in house.

For the full year, Morgan Stanley set aside $24.6 billion to pay its well-compensated employees, an increase of 18% from a year earlier.

Morgan had a similar performance to its competition in the quarter. Investment banking revenues rose as companies turned to Wall Street to do deals as well as go public, while trading revenues were down, reflecting a quieter trading environment in the last months of 2021 compared to 2020.

The big growth in Morgan’s profits came in its wealth and asset management business. Asset management brought in $5.39 billion in revenue last quarter, up 37% from a year earlier. Morgan did a couple large acquisitions in wealth and asset management in the past two years. The bank bought the online brokerage firm E-Trade in 2020 and purchased wealth management firm Eaton Vance in 2021.

The acquisitions brought hundreds of billions of dollars of new assets and client wealth under the Morgan Stanley brand. Morgan CEO James Gorman set out several years ago to expand the bank’s businesses into more steady forms of income instead of focusing on trading and investment banking, which can be seasonal and impacted by uncontrollable economic forces.

“Combined with Investment Management, we now have $6.5 trillion in client assets. We have a sustainable business model with scale, capital flexibility, momentum and growth,” Gorman said in a statement.