Morgan Stanley Reports Net Revenues of $15.0 Billion, EPS of
$1.82 and ROTCE of 17.5%
Morgan Stanley (NYSE: MS) today reported net revenues of
$15.0 billion for the second quarter ended June 30, 2024 compared
with $13.5 billion a year ago. Net income applicable to Morgan
Stanley was $3.1 billion, or $1.82 per diluted share,1 compared
with net income of $2.2 billion, or $1.24 per diluted share,1 for
the same period a year ago.
Ted Pick, Chief Executive Officer,
said, “The Firm delivered another strong quarter in an improving
capital markets environment, resulting in first half 2024 revenues
of $30.2 billion, EPS of $3.85 and an ROTCE of 18.6%. Total client
assets grew to $7.2 trillion on our road to $10+ trillion. We
announced an increase of our quarterly common stock dividend to
$0.925 per share while maintaining robust capital levels with a
CET1 ratio of 15.2%, reflecting the durability of our business
model. We continue to execute on our strategy and remain well
positioned to deliver growth and long-term value for our
shareholders.”
Financial Summary2,3
Firm ($ millions, except
per share data)
2Q
2024
2Q
2023
Highlights
- Net revenues for the second quarter were $15.0 billion,
balanced across Wealth Management and Institutional
Securities.
- The Firm delivered ROTCE of 17.5%.2,4
- The Firm expense efficiency ratio was 72% for both the second
quarter and the first half of the year benefiting from our scale
and intentional expense management.3,8
- During the quarter, the Firm accreted $1.5 billion of Common
Equity Tier 1 capital while supporting our clients and executing
capital actions, and ended the quarter with a Standardized Common
Equity Tier 1 capital ratio of 15.2%.16
Net revenues
$15,019
$13,457
Provision for credit losses
$76
$161
Compensation expense
$6,460
$6,262
Non-compensation expenses
$4,409
$4,222
Pre-tax income6
$4,074
$2,812
Net income app. to MS
$3,076
$2,182
Expense efficiency ratio8
72%
78%
Earnings per diluted share1
$1.82
$1.24
Book value per share
$56.80
$55.24
Tangible book value per
share4
$42.30
$40.79
Return on equity
13.0%
8.9%
Return on tangible common
equity4
17.5%
12.1%
Institutional
Securities
- Institutional Securities net revenues of $7.0 billion reflect
strong performance across the franchise, with notable strength in
Equity, driven by higher client activity, and in Investment Banking
on robust debt underwriting results.
Net revenues
$6,982
$5,654
Investment Banking
$1,619
$1,075
Equity
$3,018
$2,548
Fixed Income
$1,999
$1,716
Wealth Management
- Wealth Management delivered a pre-tax margin of 26.8% for the
quarter.7 Net revenues were $6.8 billion on record asset management
revenues driven by cumulative fee-based asset flows and a positive
market environment. Fee-based asset flows were $26 billion for the
quarter and $52 billion for the first half of the year.10 The
business added net new assets of $36 billion in the quarter and
$131 billion in the first half of the year.11
Net revenues
$6,792
$6,660
Fee-based client assets ($
billions)9
$2,188
$1,856
Fee-based asset flows ($
billions)10
$26.0
$22.7
Net new assets ($ billions)11
$36.4
$89.5
Loans ($ billions)
$150.9
$144.7
Investment Management
- Investment Management results reflect net revenues of $1.4
billion, primarily driven by increased asset management revenues on
higher long-term average AUM.12
Net revenues
$1,386
$1,281
AUM ($ billions)12
$1,518
$1,412
Long-term net flows ($
billions)13
$(1.2)
$1.1
Second Quarter Results
Institutional Securities
Institutional Securities reported net revenues for the current
quarter of $7.0 billion compared with $5.7 billion a year ago.
Pre-tax income was $2.0 billion compared with $1.0 billion a year
ago.6
Investment Banking revenues up 51% from
a year ago:
- Advisory revenues increased from a year ago on higher completed
M&A transactions.
- Equity underwriting revenues increased from a year ago driven
by private placements and higher revenues in IPOs and convertible
offerings.
- Fixed income underwriting revenues increased significantly from
a year ago primarily driven by higher non-investment grade
issuances.
Equity net revenues up 18% from a year
ago:
- Equity net revenues increased from a year ago reflecting strong
performance across business lines and regions, particularly in
Asia, on stronger client engagement and a constructive market
environment.
Fixed Income net revenues up 16% from a
year ago:
- Fixed Income net revenues increased from a year ago driven by
higher results in credit reflecting strong financing revenues and
in foreign exchange on higher client engagement.
Other:
- Other revenues for the quarter increased from a year ago
primarily driven by higher net interest income and fees and lower
mark-to-market losses on corporate loans, inclusive of loan
hedges.
($ millions)
2Q
2024
2Q
2023
Net Revenues
$6,982
$5,654
Investment Banking
$1,619
$1,075
Advisory
$592
$455
Equity underwriting
$352
$225
Fixed income underwriting
$675
$395
Equity
$3,018
$2,548
Fixed Income
$1,999
$1,716
Other
$346
$315
Provision for credit
losses
$54
$97
Total Expenses
$4,882
$4,580
Compensation
$2,291
$2,215
Non-compensation
$2,591
$2,365
Provision for credit losses:
- Provision for credit losses decreased on lower provisions on
corporate loans compared to the prior year quarter.
Total Expenses:
- Compensation expense increased from a year ago on higher
revenues, partially offset by lower severance costs.
- Non-compensation expenses increased from a year ago on higher
execution-related expenses.
Wealth Management
Wealth Management reported net revenues of $6.8 billion in the
current quarter compared with $6.7 billion a year ago. Pre-tax
income of $1.8 billion6 in the current quarter resulted in a
pre-tax margin of 26.8%.7
Net revenues up 2% from a year
ago:
- Record asset management revenues reflect higher asset levels
from a year ago and the cumulative impact of positive fee-based
flows.
- Transactional revenues increased 5% excluding the impact of
mark-to-market on investments associated with DCP.5,14 The increase
was primarily driven by higher equity related transactions.
- Net interest income decreased from a year ago on lower average
sweep deposits reflecting the cumulative effect of cash
redeployments by clients in a higher interest rate
environment.
Provision for credit losses:
- Provision for credit losses decreased on lower provisions in
the commercial real estate sector compared to the prior year
quarter.
Total Expenses:
- Compensation expense increased from a year ago on higher
compensable revenues, partially offset by lower expenses related to
DCP and lower severance costs.
- Non-compensation expenses decreased from a year ago on lower
professional services and the absence of integration-related
expenses in the current quarter.
($ millions)
2Q
2024
2Q
2023
Net Revenues
$6,792
$6,660
Asset management
$3,989
$3,452
Transactional14
$782
$869
Net interest
$1,798
$2,156
Other
$223
$183
Provision for credit
losses
$22
$64
Total Expenses
$4,949
$4,915
Compensation
$3,601
$3,503
Non-compensation
$1,348
$1,412
Investment Management
Investment Management net revenues were $1.4 billion compared
with $1.3 billion a year ago. Pre-tax income was $222 million
compared with $170 million a year ago.6
Net revenues up 8% from a year
ago:
- Asset management and related fees increased from a year ago on
higher average AUM driven by higher market levels.
- Performance-based income and other revenues increased from a
year ago primarily due to higher accrued carried interest in our
private funds, partially offset by mark-to-market losses on
investments associated with DCP versus gains in the prior
year.
Total Expenses:
- Compensation expense increased from a year ago on higher
compensation associated with carried interest.
- Non-compensation expenses increased from a year ago, primarily
driven by continued investments in technology and infrastructure to
support business growth.
($ millions)
2Q
2024
2Q
2023
Net Revenues
$1,386
$1,281
Asset management and related
fees
$1,342
$1,268
Performance-based income and
other
$44
$13
Total Expenses
$1,164
$1,111
Compensation
$568
$544
Non-compensation
$596
$567
Other Matters
- The Firm repurchased $0.8 billion of its outstanding common
stock during the quarter as part of its Share Repurchase
Program.
- The Firm reauthorized a multi-year repurchase program of up to
$20 billion of outstanding common stock without a set expiration
date.
- The Board of Directors declared a $0.925 quarterly dividend per
share, an increase of 7.5 cents, payable on August 15, 2024 to
common shareholders of record on July 31, 2024.
- The effective tax rate for the current quarter was 23.5%.
2Q
2024
2Q
2023
Common Stock
Repurchases
Repurchases ($MM)
$750
$1,000
Number of Shares (MM)
8
12
Average Price
$95.96
$83.86
Period End Shares (MM)
1,619
1,659
Tax Rate
23.5%
21.0%
Capital15
Standardized Approach
CET1 capital16
15.2%
15.5%
Tier 1 capital16
17.0%
17.4%
Advanced Approach
CET1 capital16
15.3%
15.8%
Tier 1 capital16
17.1%
17.8%
Leverage-based capital
Tier 1 leverage17
6.8%
6.7%
SLR18
5.5%
5.5%
Morgan Stanley (NYSE: MS) is a leading global financial services
firm providing a wide range of investment banking, securities,
wealth management and investment management services. With offices
in 42 countries, the Firm’s employees serve clients worldwide
including corporations, governments, institutions and individuals.
For further information about Morgan Stanley, please visit
www.morganstanley.com.
A financial summary follows. Financial, statistical and
business-related information, as well as information regarding
business and segment trends, is included in the financial
supplement. Both the earnings release and the financial supplement
are available online in the Investor Relations section at
www.morganstanley.com.
NOTICE:
The information provided herein and in the financial supplement,
including information provided on the Firm’s earnings conference
calls, may include certain non-GAAP financial measures. The
definition of such measures or reconciliation of such measures to
the comparable U.S. GAAP figures are included in this earnings
release and the financial supplement, both of which are available
on www.morganstanley.com.
This earnings release may contain forward-looking statements,
including the attainment of certain financial and other targets,
objectives and goals. Readers are cautioned not to place undue
reliance on forward-looking statements, which speak only as of the
date on which they are made, which reflect management’s current
estimates, projections, expectations, assumptions, interpretations
or beliefs and which are subject to risks and uncertainties that
may cause actual results to differ materially. For a discussion of
risks and uncertainties that may affect the future results of the
Firm, please see “Forward-Looking Statements” preceding Part I,
Item 1, “Competition” and “Supervision and Regulation” in Part I,
Item 1, “Risk Factors” in Part I, Item 1A, “Legal Proceedings” in
Part I, Item 3, “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” in Part II, Item 7 and
“Quantitative and Qualitative Disclosures about Risk” in Part II,
Item 7A in the Firm’s Annual Report on Form 10-K for the year ended
December 31, 2023 and other items throughout the Form 10-K, the
Firm’s Quarterly Reports on Form 10-Q and the Firm’s Current
Reports on Form 8-K, including any amendments thereto.
1 Includes preferred dividends related to the calculation of
earnings per share for the second quarter of 2024 and 2023 of
approximately $134 million and $133 million, respectively.
2 The Firm prepares its Consolidated Financial Statements using
accounting principles generally accepted in the United States (U.S.
GAAP). From time to time, Morgan Stanley may disclose certain
“non-GAAP financial measures” in the course of its earnings
releases, earnings conference calls, financial presentations and
otherwise. The Securities and Exchange Commission defines a
“non-GAAP financial measure” as a numerical measure of historical
or future financial performance, financial position, or cash flows
that is subject to adjustments that effectively exclude, or include
amounts from the most directly comparable measure calculated and
presented in accordance with U.S. GAAP. Non-GAAP financial measures
disclosed by Morgan Stanley are provided as additional information
to analysts, investors and other stakeholders in order to provide
them with greater transparency about, or an alternative method for
assessing our financial condition, operating results, or capital
adequacy. These measures are not in accordance with, or a
substitute for U.S. GAAP, and may be different from or inconsistent
with non-GAAP financial measures used by other companies. Whenever
we refer to a non-GAAP financial measure, we will also generally
define it or present the most directly comparable financial measure
calculated and presented in accordance with U.S. GAAP, along with a
reconciliation of the differences between the non-GAAP financial
measure we reference and such comparable U.S. GAAP financial
measure.
3 Our earnings releases, earnings conference calls, financial
presentations and other communications may also include certain
metrics which we believe to be useful to us, analysts, investors,
and other stakeholders by providing further transparency about, or
an additional means of assessing, our financial condition and
operating results.
4 Tangible common equity is a non-GAAP financial measure that
the Firm considers useful for analysts, investors and other
stakeholders to allow comparability of period-to-period operating
performance and capital adequacy. Tangible common equity represents
common equity less goodwill and intangible assets net of allowable
mortgage servicing rights deduction. The calculation of return on
average tangible common equity, also a non-GAAP financial measure,
represents full year or annualized net income applicable to Morgan
Stanley less preferred dividends as a percentage of average
tangible common equity. The calculation of tangible book value per
common share, also a non-GAAP financial measure, represents
tangible common shareholder’s equity divided by common shares
outstanding.
5 “DCP” refers to certain employee deferred cash-based
compensation programs. Please refer to "Management’s Discussion and
Analysis of Financial Condition and Results of Operations – Other
Matters – Deferred Cash-Based Compensation” in the Firm’s Annual
Report on Form 10-K for the year ended December 31, 2023.
6 Pre-tax income represents income before provision for income
taxes.
7 Pre-tax margin represents income before provision for income
taxes divided by net revenues.
8 The expense efficiency ratio represents total non-interest
expenses as a percentage of net revenues.
9 Wealth Management fee-based client assets represent the amount
of assets in client accounts where the basis of payment for
services is a fee calculated on those assets.
10 Wealth Management fee-based asset flows include net new
fee-based assets (including asset acquisitions), net account
transfers, dividends, interest, and client fees, and exclude
institutional cash management related activity.
11 Wealth Management net new assets represent client asset
inflows, inclusive of interest, dividends and asset acquisitions,
less client asset outflows, and exclude the impact of business
combinations/divestitures and the impact of fees and
commissions.
12 AUM is defined as assets under management or supervision.
13 Long-term net flows include the Equity, Fixed Income and
Alternative and Solutions asset classes and excludes the Liquidity
and Overlay Services asset class.
14 Transactional revenues include investment banking, trading,
and commissions and fee revenues.
15 Capital ratios are estimates as of the press release date,
July 16, 2024.
16 CET1 capital is defined as Common Equity Tier 1 capital. The
Firm’s risk-based capital ratios are computed under each of the (i)
standardized approaches for calculating credit risk and market risk
risk-weighted assets (RWAs) (the “Standardized Approach”) and (ii)
applicable advanced approaches for calculating credit risk, market
risk and operational risk RWAs (the “Advanced Approach”). For
information on the calculation of regulatory capital and ratios,
and associated regulatory requirements, please refer to
"Management’s Discussion and Analysis of Financial Condition and
Results of Operations – Liquidity and Capital Resources –
Regulatory Requirements" in the Firm’s Annual Report on Form 10-K
for the year ended December 31, 2023.
17 The Tier 1 leverage ratio is a leverage-based capital
requirement that measures the Firm’s leverage. Tier 1 leverage
ratio utilizes Tier 1 capital as the numerator and average adjusted
assets as the denominator.
18 The Firm’s supplementary leverage ratio (SLR) utilizes a Tier
1 capital numerator of approximately $80.5 billion and $78.4
billion, and supplementary leverage exposure denominator of
approximately $1.47 trillion and $1.42 trillion, for the second
quarter of 2024 and 2023, respectively.
Consolidated Income Statement
Information
(unaudited, dollars in
millions)
Quarter Ended
Percentage Change
From:
Six Months Ended
Percentage
Change
Jun 30, 2024
Mar 31, 2024
Jun 30, 2023
Mar 31, 2024
Jun 30, 2023
Jun 30, 2024
Jun 30, 2023
Revenues:
Investment banking
$
1,735
$
1,589
$
1,155
9
%
50
%
$
3,324
$
2,485
34
%
Trading
4,131
4,852
3,802
(15
%)
9
%
8,983
8,279
9
%
Investments
157
137
95
15
%
65
%
294
240
23
%
Commissions and fees
1,183
1,227
1,090
(4
%)
9
%
2,410
2,329
3
%
Asset management
5,424
5,269
4,817
3
%
13
%
10,693
9,545
12
%
Other
322
266
488
21
%
(34
%)
588
740
(21
%)
Total non-interest revenues
12,952
13,340
11,447
(3
%)
13
%
26,292
23,618
11
%
Interest income
13,529
12,930
10,913
5
%
24
%
26,459
20,893
27
%
Interest expense
11,462
11,134
8,903
3
%
29
%
22,596
16,537
37
%
Net interest
2,067
1,796
2,010
15
%
3
%
3,863
4,356
(11
%)
Net revenues
15,019
15,136
13,457
(1
%)
12
%
30,155
27,974
8
%
Provision for credit losses
76
(6
)
161
*
(53
%)
70
395
(82
%)
Non-interest expenses:
Compensation and benefits
6,460
6,696
6,262
(4
%)
3
%
13,156
12,672
4
%
Non-compensation expenses:
Brokerage, clearing and exchange fees
995
921
875
8
%
14
%
1,916
1,756
9
%
Information processing and
communications
1,011
976
926
4
%
9
%
1,987
1,841
8
%
Professional services
753
639
767
18
%
(2
%)
1,392
1,477
(6
%)
Occupancy and equipment
464
441
471
5
%
(1
%)
905
911
(1
%)
Marketing and business development
245
217
236
13
%
4
%
462
483
(4
%)
Other
941
857
947
10
%
(1
%)
1,798
1,867
(4
%)
Total non-compensation expenses
4,409
4,051
4,222
9
%
4
%
8,460
8,335
1
%
Total non-interest expenses
10,869
10,747
10,484
1
%
4
%
21,616
21,007
3
%
Income before provision for income
taxes
4,074
4,395
2,812
(7
%)
45
%
8,469
6,572
29
%
Provision for income taxes
957
933
591
3
%
62
%
1,890
1,318
43
%
Net income
$
3,117
$
3,462
$
2,221
(10
%)
40
%
$
6,579
$
5,254
25
%
Net income applicable to nonredeemable
noncontrolling interests
41
50
39
(18
%)
5
%
91
92
(1
%)
Net income applicable to Morgan
Stanley
3,076
3,412
2,182
(10
%)
41
%
6,488
5,162
26
%
Preferred stock dividend
134
146
133
(8
%)
1
%
280
277
1
%
Earnings applicable to Morgan Stanley
common shareholders
$
2,942
$
3,266
$
2,049
(10
%)
44
%
$
6,208
$
4,885
27
%
Notes:
–
In the first quarter of 2024, the
Firm implemented certain presentation changes that impacted
interest income and interest expense but had no effect on net
interest income. These changes were made to align the accounting
treatment between the balance sheet and the related interest income
or expense, primarily by offsetting interest income and expense for
certain prime brokerage-related customer receivables and payables
that are currently accounted for as a single unit of account on the
balance sheet. The current and previous presentation of these
interest income and interest expense amounts are acceptable and the
change does not represent a change in accounting principle. These
changes were applied retrospectively to the income statement in
2023 and accordingly, prior period amounts were adjusted to conform
with the current presentation.
–
Firm net revenues excluding
mark-to-market gains and losses on deferred cash-based compensation
plans (DCP) were: 2Q24: $15,073 million, 1Q24: $14,949 million,
2Q23: $13,343 million, 2Q24 YTD: $30,022 million, 2Q23 YTD: $27,707
million.
–
Firm compensation expenses
excluding DCP were: 2Q24: $6,405 million, 1Q24: $6,447 million,
2Q23: $6,084 million, 2Q24 YTD: $12,852 million, 2Q23 YTD: $12,301
million.
–
The End Notes are an integral
part of this presentation. Refer to pages 12 - 17 of the Financial
Supplement for Definition of U.S. GAAP to Non-GAAP Measures,
Definitions of Performance Metrics and Terms, Supplemental
Quantitative Details and Calculations, and Legal Notice.
Consolidated Financial Metrics, Ratios
and Statistical Data
(unaudited)
Quarter Ended
Percentage Change
From:
Six Months Ended
Percentage Change
Jun 30, 2024
Mar 31, 2024
Jun 30, 2023
Mar 31, 2024
Jun 30, 2023
Jun 30, 2024
Jun 30, 2023
Financial Metrics:
Earnings per basic share
$
1.85
$
2.04
$
1.25
(9
%)
48
%
$
3.89
$
2.98
31
%
Earnings per diluted share
$
1.82
$
2.02
$
1.24
(10
%)
47
%
$
3.85
$
2.95
31
%
Return on average common equity
13.0
%
14.5
%
8.9
%
13.8
%
10.7
%
Return on average tangible common
equity
17.5
%
19.7
%
12.1
%
18.6
%
14.5
%
Book value per common share
$
56.80
$
55.60
$
55.24
$
56.80
$
55.24
Tangible book value per common share
$
42.30
$
41.07
$
40.79
$
42.30
$
40.79
Financial Ratios:
Pre-tax margin
27
%
29
%
21
%
28
%
23
%
Compensation and benefits as a % of net
revenues
43
%
44
%
47
%
44
%
45
%
Non-compensation expenses as a % of net
revenues
29
%
27
%
31
%
28
%
30
%
Firm expense efficiency ratio
72
%
71
%
78
%
72
%
75
%
Effective tax rate
23.5
%
21.2
%
21.0
%
22.3
%
20.1
%
Statistical Data:
Period end common shares outstanding
(millions)
1,619
1,627
1,659
—
%
(2
%)
Average common shares outstanding
(millions)
Basic
1,594
1,601
1,635
—
%
(3
%)
1,597
1,640
(3
%)
Diluted
1,611
1,616
1,651
—
%
(2
%)
1,614
1,657
(3
%)
Worldwide employees
79,066
79,610
82,006
(1
%)
(4
%)
The End Notes are an integral part of this
presentation. Refer to pages 12 - 17 of the Financial Supplement
for Definition of U.S. GAAP to Non-GAAP Measures, Definitions of
Performance Metrics and Terms, Supplemental Quantitative Details
and Calculations, and Legal Notice.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240715048014/en/
Media Relations: Wesley McDade 212-761-2430
Investor Relations: Leslie Bazos 212-761-5352
Morgan Stanley (NYSE:MS)
과거 데이터 주식 차트
부터 10월(10) 2024 으로 10월(10) 2024
Morgan Stanley (NYSE:MS)
과거 데이터 주식 차트
부터 10월(10) 2023 으로 10월(10) 2024
