Morgan Stanley First Quarter 2024 Earnings Results
Morgan Stanley Reports Net Revenues of $15.1 Billion, EPS of $2.02 and ROTCE of 19.7%
April 16, 2024--
Morgan Stanley (NYSE: MS) today reported net revenues of $15.1 billion for the first quarter ended March 31, 2024 compared with $14.5 billion a year ago. Net income applicable to Morgan Stanley was $3.4 billion, or $2.02 per diluted share,(1) compared with net income of $3.0 billion, or $1.70 per diluted share,(1) for the same period a year ago.
Ted Pick, Chief Executive Officer, said, "In the first quarter of 2024 Morgan
Stanley generated net revenues of $15 billion and earnings of $2.02 per share
for a 20% return on tangible equity. As a result of strong net new asset
growth, the Firm has reached $7 trillion of client assets across Wealth and
Investment Management. Institutional Securities also saw strength across the
markets and underwriting businesses. The Morgan Stanley Integrated Firm model
is delivering durable results."
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Financial Summary(2,3) Highlights
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The Firm reported net
revenues of $15.1 billion
and net income of $3.4
billion with contributions
across each of our
businesses. The Firm
delivered strong ROTCE of
19.7%.(2,4) The Firm
expense efficiency ratio
was 71% demonstrating
operating leverage in an
improving market
environment.(3,8)
Standardized Common Equity
Tier 1 capital ratio was
15.1%.(17) Institutional
Securities net revenues of
$7.0 billion reflect strong
performance across the
broad franchise, with
particular strength in
Equity as well as
underwriting revenues,
partially offset by lower
results in Advisory. Wealth
Management delivered a
pre-tax margin of 26.3% for
the quarter.(7) Net
revenues were $6.9 billion,
on record asset management
revenues driven by the
positive market
environment. Net new assets
for the quarter were $95
billion.(11) Investment
Management results reflect
net revenues of $1.4
billion on higher average
AUM of $1.5 trillion.(12)
The quarter included
Firm ($ millions, except per positive long-term net
share data) 1Q 2024 1Q 2023 flows of $7.6 billion.(13)
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Net revenues $15,136 $14,517
Provision for credit losses $(6) $234
Compensation expense $6,696 $6,410
Non-compensation expenses $4,051 $4,113
Pre-tax income(6) $4,395 $3,760
Net income app. to MS $3,412 $2,980
Expense efficiency ratio(8) 71% 72%
Earnings per diluted share(1) $2.02 $1.70
Book value per share $55.60 $55.13
Tangible book value per
share(4) $41.07 $40.68
Return on equity 14.5% 12.4%
Return on tangible common
equity(4) 19.7% 16.9%
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Institutional Securities
Net revenues $7,016 $6,797
Investment Banking $1,447 $1,247
Equity $2,842 $2,729
Fixed Income $2,485 $2,576
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Wealth Management
Net revenues $6,880 $6,559
Fee-based client assets ($
billions)(9) $2,124 $1,769
Fee-based asset flows ($
billions)(10) $26.2 $22.4
Net new assets ($
billions)(11) $94.9 $109.6
Loans ($ billions) $147.4 $143.7
----------------------------- ------- -------
Investment Management
Net revenues $1,377 $1,289
AUM ($ billions)(12) $1,505 $1,362
Long-term net flows ($
billions)(13) $7.6 $(2.4)
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First Quarter Results
Institutional Securities
Institutional Securities reported net revenues for the current quarter of $7.0 billion compared with $6.8 billion a year ago. Pre-tax income was $2.4 billion compared with $1.9 billion a year ago.(6)
Investment Banking
revenues up 16% from a
year ago: Advisory
revenues decreased from a
year ago on lower
completed M&A
transactions. Equity
underwriting revenues
increased significantly
from a year ago reflecting
higher revenues from IPOs
and follow-ons. Fixed
income underwriting
revenues increased from a
year ago primarily driven
by higher bond issuances.
Equity net revenues up 4%
from a year ago: Equity
net revenues increased
from a year ago reflecting
solid results across
business lines and
regions, with notable
strength in derivatives
against a constructive
market backdrop. Fixed
Income net revenues down
4% from a year ago: Fixed
Income net revenues
decreased from a year ago
on lower client activity
in macro and credit,
partially offset by higher
revenues in commodities.
Other: Other revenues for
the quarter were
relatively unchanged from
a year ago. Results were
primarily driven by
revenues from corporate
loans net of the impact of
hedges and our Japanese
securities joint venture.
Provision for credit
losses: Provision for
credit losses decreased on
improvements in the
macroeconomic outlook from
a year ago. ($ millions) 1Q 2024 1Q 2023
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Net Revenues $7,016 $6,797
Investment Banking $1,447 $1,247
Advisory $461 $638
Equity underwriting $430 $202
Fixed income underwriting $556 $407
Equity $2,842 $2,729
Fixed Income $2,485 $2,576
Other $242 $245
Provision for credit losses $2 $189
Total Expenses $4,663 $4,716
Compensation $2,343 $2,365
Non-compensation $2,320 $2,351
Total Expenses:
-- Compensation expense was relatively unchanged from a year ago on lower
expenses related to stock-based compensation and reduced headcount,
offset by increased discretionary compensation on higher revenues.
-- Non-compensation expenses were relatively unchanged from a year ago
primarily driven by lower legal expenses, partially offset by higher
transaction-related expenses and technology costs.
Wealth Management
Wealth Management reported net revenues of $6.9 billion in the current quarter compared with $6.6 billion a year ago. Pre-tax income of $1.8 billion(6) in the current quarter resulted in a pre-tax margin of 26.3%.(7) Net new assets for the quarter were $95 billion of which a little more than half represented inflows from our family office offering.(11)
Net revenues up 5% from a year ago: Asset management revenues increased from a year ago reflecting higher asset levels and the cumulative impact of positive fee-based flows. Transactional revenues increased 9% excluding the impact of mark-to-market on investments associated with DCP.(5,15) The increase was driven by increased volumes in structured products commensurate with equity markets. Net interest income decreased from a year ago driven by changes in deposit mix, partially offset by the impact of interest rates. Provision for credit losses: Provision for credit losses decreased on improvements in the macroeconomic outlook from a year ago. Total Expenses: Compensation expense increased from a year ago on higher compensable revenues and higher expenses related to outstanding deferred