Financial Summary2,3 | ||||||||
Firm ($ millions, except per share data)
| 2Q 2022 |
2Q 2021 | ||||||
Net revenues
|
$
|
13,132
|
$
|
14,759
| ||||
Provision for credit losses
|
$
|
101
|
$
|
73
| ||||
Compensation expense
|
$
|
5,550
|
$
|
6,423
| ||||
Non-compensation expenses
|
$
|
4,162
|
$
|
3,697
| ||||
Pre-tax income8 |
$
|
3,319
|
$
|
4,566
| ||||
Net income app. to MS
|
$
|
2,495
|
$
|
3,511
| ||||
Expense efficiency ratio6 |
74
|
%
|
69
|
%
| ||||
Earnings per diluted share
|
$
|
1.39
|
$
|
1.85
| ||||
Book value per share
|
$
|
54.46
|
$
|
54.04
| ||||
Tangible book value per share
|
$
|
40.07
|
$
|
40.12
| ||||
Return on equity
|
10.1
|
%
|
13.8
|
%
| ||||
Return on tangible equity4 |
13.8
|
%
|
18.6
|
%
| ||||
Institutional Securities
| ||||||||
Net revenues
|
$
|
6,119
|
$
|
7,092
| ||||
Investment Banking
|
$
|
1,072
|
$
|
2,376
| ||||
Equity
|
$
|
2,960
|
$
|
2,827
| ||||
Fixed Income
|
$
|
2,500
|
$
|
1,682
| ||||
Wealth Management
| ||||||||
Net revenues
|
$
|
5,736
|
$
|
6,095
| ||||
Fee-based client assets ($ billions)9 |
$
|
1,717
|
$
|
1,680
| ||||
Fee-based asset flows ($ billions)10 |
$
|
28.5
|
$
|
33.7
| ||||
Net new assets ($ billions)
|
$
|
52.9
|
$
|
71.2
| ||||
Loans ($ billions)
|
$
|
143.6
|
$
|
114.7
| ||||
Investment Management
| ||||||||
Net revenues
|
$
|
1,411
|
$
|
1,702
| ||||
AUM ($ billions)11 |
$
|
1,351
|
$
|
1,524
| ||||
Long-term net flows ($ billions)12 |
$
|
(3.5
|
)
|
$
|
13.5
|
•
|
The Firm reported solid results with net revenues of $13.1 billion demonstrating the strength of our diversified franchise as the businesses navigated a challenging market environment.
|
•
|
The Firm delivered ROTCE of 13.8%, or 14.3% excluding the impact of integration-related expenses.4,5 |
•
|
The Firm's expense efficiency ratio was 74%, impacted by $200 million related to a specific regulatory matter concerning the use of unapproved personal devices and the Firm's record-keeping requirements. In the first half of the year, the expense efficiency ratio was 71%, or 70% excluding the impact of integration-related expenses.5,6 |
•
|
The Firm remains in a strong capital position with a Standardized Common Equity Tier 1 capital ratio of 15.2%.
|
•
|
Institutional Securities net revenues of $6.1 billion reflect strong performance in Fixed Income and Equity as clients remained engaged in volatile markets, while limited activity in Investment Banking was impacted by the uncertain macroeconomic environment. |
•
|
Wealth Management delivered a pre-tax margin of 26.5% or 28.2% excluding integration-related expenses.5,7Net revenues were $5.7 billion, negatively impacted by mark-to-market losses on investments associated with certain employee deferred compensation plans. The business added net new assets of $53 billion in the quarter and $195 billion in the first half of 2022. The quarter also saw continued growth in bank lending and $29 billion of fee-based flows.
|
•
|
Investment Management net revenues were $1.4 billion. The diversified business delivered solid results despite lower equity markets.
|
Media Relations: Wesley McDade 212-761-2430 | Investor Relations: Leslie Bazos 212-761-5352 |
•
|
Advisory revenues decreased from a year ago driven by lower levels of completed M&A transactions.
|
•
|
Equity underwriting revenues significantly decreased from a year ago on lower issuances given uncertainty in the markets.
|
•
|
Fixed income underwriting revenues decreased from a year ago as macroeconomic conditions contributed to lower issuances.
|
•
|
Equity net revenues increased from a year ago on continued strong client engagement and elevated market volatility, with particular strength in derivatives products and prime brokerage.
|
•
|
Fixed Income net revenues increased substantially from a year ago reflecting strength in our macro businesses and in commodities on increased client activity and volatility in the markets.
|
•
|
Other revenues decreased from a year ago driven by mark-to-market losses on corporate loans held for sale, net of hedges, reflecting the widening of credit spreads in the quarter. Mark-to-market losses on investments associated with certain employee deferred compensation plans also contributed to the decline.
|
($ millions)
| 2Q 2022 |
2Q 2021 | ||||||
Net Revenues
|
$
|
6,119
|
$
|
7,092
| ||||
Investment Banking
|
$
|
1,072
|
$
|
2,376
| ||||
Advisory
|
$
|
598
|
$
|
664
| ||||
Equity underwriting
|
$
|
148
|
$
|
1,072
| ||||
Fixed income underwriting
|
$
|
326
|
$
|
640
| ||||
Equity
|
$
|
2,960
|
$
|
2,827
| ||||
Fixed Income
|
$
|
2,500
|
$
|
1,682
| ||||
Other
|
$
|
(413
|
)
|
$
|
207
| |||
Provision for credit losses
|
$
|
82
|
$
|
70
| ||||
Total Expenses
|
$
|
4,483
|
$
|
4,524
| ||||
Compensation
|
$
|
2,050
|
$
|
2,433
| ||||
Non-compensation
|
$
|
2,433
|
$
|
2,091
|
•
|
Compensation expense decreased from a year ago primarily driven by a decline related to certain deferred compensation plans linked to investment performance and the impact of lower revenues.
|
•
|
Non-compensation expenses increased from a year ago primarily driven by higher litigation costs, including $200 million related to a specific regulatory matter concerning the use of unapproved personal devices and the Firm's record-keeping requirements, and higher volume-related expenses.
|
•
|
Asset management revenues increased 2% reflecting higher asset levels driven by continued positive fee-based flows, partially offset by lower market levels compared to a year ago.
|
•
|
Transactional revenues13 decreased 17% excluding the impact of mark-to-market losses on investments associated with certain employee deferred compensation plans. The decrease was driven by lower client activity from a strong prior year period.
|
•
|
Net interest income increased from a year ago on higher interest rates and continued bank lending growth.
|
•
|
Compensation expense decreased driven by a decline primarily related to certain deferred compensation plans linked to investment performance.
|
($ millions)
| 2Q 2022 |
2Q 2021 | ||||||
Net Revenues
|
$
|
5,736
|
$
|
6,095
| ||||
Asset management
|
$
|
3,510
|
$
|
3,447
| ||||
Transactional13 |
$
|
291
|
$
|
1,172
| ||||
Net interest income
|
$
|
1,747
|
$
|
1,255
| ||||
Other
|
$
|
188
|
$
|
221
| ||||
Provision for credit losses
|
$
|
19
|
$
|
3
| ||||
Total Expenses
|
$
|
4,196
|
$
|
4,456
| ||||
Compensation
|
$
|
2,895
|
$
|
3,275
| ||||
Non-compensation
|
$
|
1,301
|
$
|
1,181
|
•
|
Non-compensation expenses increased from a year ago primarily driven by investments in technology, as well as higher marketing and business development costs and integration-related expenses.
|
•
|
Asset management and related fees decreased from a year ago driven by lower AUM, primarily due to the decline in equity markets.
|
•
|
Performance-based income and other revenues decreased from a year ago primarily reflecting mark-to-market losses on investments associated with certain employee deferred compensation plans and lower marks on public investments reflecting the decline in the equity markets.
|
($ millions)
| 2Q 2022 |
2Q 2021 | ||||||
Net Revenues
|
$
|
1,411
|
$
|
1,702
| ||||
Asset management and related fees
|
$
|
1,304
|
$
|
1,418
| ||||
Performance-based income and other
|
$
|
107
|
$
|
284
| ||||
Total Expenses
|
$
|
1,162
|
$
|
1,272
| ||||
Compensation
|
$
|
605
|
$
|
715
| ||||
Non-compensation
|
$
|
557
|
$
|
557
|
•
|
Compensation expense decreased from a year ago primarily driven by a decline related to certain deferred compensation plans linked to investment performance.
|
•
|
The Firm repurchased $2.7 billion of its outstanding common stock during the quarter, completing our $12 billion buyback plan that we announced last year.
|
•
|
The Firm also announced a multi-year repurchase authorization of up to $20 billion of outstanding common stock without a set expiration date.
|
•
|
The Board of Directors declared a $0.775 quarterly dividend per share, an 11% increase from the current $0.70 per share dividend, payable on August 15, 2022 to common shareholders of record on July 29, 2022.
|
•
|
The Standardized Common Equity Tier 1 capital ratio was 15.2%, 190 basis points above the new aggregate standardized approach CET1 requirement beginning October 1, 2022.
|
Capital14 | 2Q 2022 |
2Q 2021 | ||||||
Standardized Approach
| ||||||||
CET1 capital15 |
15.2
|
%
|
16.6
|
%
| ||||
Tier 1 capital15 |
16.9
|
%
|
18.3
|
%
| ||||
Advanced Approach
| ||||||||
CET1 capital15 |
15.4
|
%
|
17.7
|
%
| ||||
Tier 1 capital15 |
17.1
|
%
|
19.5
|
%
| ||||
Leverage-based capital
| ||||||||
Tier 1 leverage16 |
6.6
|
%
|
7.5
|
%
| ||||
SLR17 |
5.4
|
%
|
5.9
|
%
| ||||
Common Stock Repurchases
| ||||||||
Repurchases ($ millions)
|
$
|
2,738
|
$
|
2,939
| ||||
Number of Shares (millions)
|
33
|
34
| ||||||
Average Price
|
$
|
82.05
|
$
|
86.21
| ||||
Period End Shares (millions)
|
1,723
|
1,834
| ||||||
Tax Rate
|
23.6
|
%
|
23.1
|
%
|
2Q 2022 |
2Q 2021 | |||||||
Firm | ||||||||
Compensation
|
$
|
11
|
$
|
25
| ||||
Non-compensation
|
109
|
65
| ||||||
Total non-interest expenses
|
$
|
120
|
$
|
90
| ||||
Total non-interest expenses (after-tax)
|
$
|
92
|
$
|
69
| ||||
Wealth Management | ||||||||
Compensation
|
$
|
4
|
$
|
9
| ||||
Non-compensation
|
92
|
51
| ||||||
Total non-interest expenses
|
$
|
96
|
$
|
60
| ||||
Total non-interest expenses (after-tax)
|
$
|
74
|
$
|
46
| ||||
Investment Management | ||||||||
Compensation
|
$
|
7
|
$
|
16
| ||||
Non-compensation
|
17
|
14
| ||||||
Total non-interest expenses
|
$
|
24
|
$
|
30
| ||||
Total non-interest expenses (after-tax)
|
$
|
18
|
$
|
23
|
Consolidated Income Statement Information
| ||||||||||||||||||||||||||||||||
(unaudited, dollars in millions)
| ||||||||||||||||||||||||||||||||
Quarter Ended
|
Percentage Change From:
|
Six Months Ended
|
Percentage
| |||||||||||||||||||||||||||||
Jun 30, 2022
|
Mar 31, 2022
|
Jun 30, 2021
|
Mar 31, 2022
|
Jun 30, 2021
|
Jun 30, 2022
|
Jun 30, 2021
|
Change
| |||||||||||||||||||||||||
Revenues:
| ||||||||||||||||||||||||||||||||
Investment banking
|
$
|
1,150
|
$
|
1,758
|
$
|
2,560
|
(35
|
%)
|
(55
|
%)
|
$
|
2,908
|
$
|
5,400
|
(46
|
%)
| ||||||||||||||||
Trading
|
3,597
|
3,983
|
3,330
|
(10
|
%)
|
8
|
%
|
7,580
|
7,555
|
--
| ||||||||||||||||||||||
Investments
|
23
|
75
|
381
|
(69
|
%)
|
(94
|
%)
|
98
|
699
|
(86
|
%)
| |||||||||||||||||||||
Commissions and fees
|
1,220
|
1,416
|
1,308
|
(14
|
%)
|
(7
|
%)
|
2,636
|
2,934
|
(10
|
%)
| |||||||||||||||||||||
Asset management
|
4,912
|
5,119
|
4,973
|
(4
|
%)
|
(1
|
%)
|
10,031
|
9,371
|
7
|
%
| |||||||||||||||||||||
Other
|
(52
|
)
|
234
|
342
|
*
|
*
|
182
|
626
|
(71
|
%)
| ||||||||||||||||||||||
Total non-interest revenues
|
10,850
|
12,585
|
12,894
|
(14
|
%)
|
(16
|
%)
|
23,435
|
26,585
|
(12
|
%)
| |||||||||||||||||||||
Interest income
|
3,612
|
2,650
|
2,212
|
36
|
%
|
63
|
%
|
6,262
|
4,649
|
35
|
%
| |||||||||||||||||||||
Interest expense
|
1,330
|
434
|
347
|
*
|
*
|
1,764
|
756
|
133
|
%
| |||||||||||||||||||||||
Net interest
|
2,282
|
2,216
|
1,865
|
3
|
%
|
22
|
%
|
4,498
|
3,893
|
16
|
%
| |||||||||||||||||||||
Net revenues
|
13,132
|
14,801
|
14,759
|
(11
|
%)
|
(11
|
%)
|
27,933
|
30,478
|
(8
|
%)
| |||||||||||||||||||||
Provision for credit losses
|
101
|
57
|
73
|
77
|
%
|
38
|
%
|
158
|
(25
|
)
|
*
| |||||||||||||||||||||
Non-interest expenses:
| ||||||||||||||||||||||||||||||||
Compensation and benefits
|
5,550
|
6,274
|
6,423
|
(12
|
%)
|
(14
|
%)
|
11,824
|
13,221
|
(11
|
%)
| |||||||||||||||||||||
Non-compensation expenses:
| ||||||||||||||||||||||||||||||||
Brokerage, clearing and exchange fees
|
878
|
882
|
795
|
--
|
10
|
%
|
1,760
|
1,705
|
3
|
%
| ||||||||||||||||||||||
Information processing and communications
|
857
|
829
|
765
|
3
|
%
|
12
|
%
|
1,686
|
1,498
|
13
|
%
| |||||||||||||||||||||
Professional services
|
757
|
705
|
746
|
7
|
%
|
1
|
%
|
1,462
|
1,370
|
7
|
%
| |||||||||||||||||||||
Occupancy and equipment
|
430
|
427
|
414
|
1
|
%
|
4
|
%
|
857
|
819
|
5
|
%
| |||||||||||||||||||||
Marketing and business development
|
220
|
175
|
146
|
26
|
%
|
51
|
%
|
395
|
292
|
35
|
%
| |||||||||||||||||||||
Other
|
1,020
|
864
|
831
|
18
|
%
|
23
|
%
|
1,884
|
1,688
|
12
|
%
| |||||||||||||||||||||
Total non-compensation expenses
|
4,162
|
3,882
|
3,697
|
7
|
%
|
13
|
%
|
8,044
|
7,372
|
9
|
%
| |||||||||||||||||||||
Total non-interest expenses
|
9,712
|
10,156
|
10,120
|
(4
|
%)
|
(4
|
%)
|
19,868
|
20,593
|
(4
|
%)
| |||||||||||||||||||||
Income before provision for income taxes
|
3,319
|
4,588
|
4,566
|
(28
|
%)
|
(27
|
%)
|
7,907
|
9,910
|
(20
|
%)
| |||||||||||||||||||||
Provision for income taxes
|
783
|
873
|
1,054
|
(10
|
%)
|
(26
|
%)
|
1,656
|
2,230
|
(26
|
%)
| |||||||||||||||||||||
Net income
|
$
|
2,536
|
$
|
3,715
|
$
|
3,512
|
(32
|
%)
|
(28
|
%)
|
$
|
6,251
|
$
|
7,680
|
(19
|
%)
| ||||||||||||||||
Net income applicable to nonredeemable noncontrolling interests
|
41
|
49
|
1
|
(16
|
%)
|
*
|
90
|
49
|
84
|
%
| ||||||||||||||||||||||
Net income applicable to Morgan Stanley
|
2,495
|
3,666
|
3,511
|
(32
|
%)
|
(29
|
%)
|
6,161
|
7,631
|
(19
|
%)
| |||||||||||||||||||||
Preferred stock dividend
|
104
|
124
|
103
|
(16
|
%)
|
1
|
%
|
228
|
241
|
(5
|
%)
| |||||||||||||||||||||
Earnings applicable to Morgan Stanley common shareholders
|
$
|
2,391
|
$
|
3,542
|
$
|
3,408
|
(32
|
%)
|
(30
|
%)
|
$
|
5,933
|
$
|
7,390
|
(20
|
%)
| ||||||||||||||||
The End Notes are an integral part of this presentation. Refer to the Financial Supplement on pages 12 - 17 for Definition of U.S. GAAP to Non-GAAP Measures, Definitions of Performance Metrics and Terms, Supplemental Quantitative Details and Calculations, and Legal Notice for additional information.
|
Consolidated Financial Metrics, Ratios and Statistical Data
| ||||||||||||||||||||||||||||||||
(unaudited)
| ||||||||||||||||||||||||||||||||
Quarter Ended
|
Percentage Change From:
|
Six Months Ended
|
Percentage
| |||||||||||||||||||||||||||||
Jun 30, 2022
|
Mar 31, 2022
|
Jun 30, 2021
|
Mar 31, 2022
|
Jun 30, 2021
|
Jun 30, 2022
|
Jun 30, 2021
|
Change
| |||||||||||||||||||||||||
Financial Metrics:
| ||||||||||||||||||||||||||||||||
Earnings per basic share
|
$
|
1.40
|
$
|
2.04
|
$
|
1.88
|
(31
|
%)
|
(26
|
%)
|
$
|
3.45
|
$
|
4.10
|
(16
|
%)
| ||||||||||||||||
Earnings per diluted share
|
$
|
1.39
|
$
|
2.02
|
$
|
1.85
|
(31
|
%)
|
(25
|
%)
|
$
|
3.41
|
$
|
4.04
|
(16
|
%)
| ||||||||||||||||
Return on average common equity
|
10.1
|
%
|
14.7
|
%
|
13.8
|
%
|
12.4
|
%
|
15.3
|
%
| ||||||||||||||||||||||
Return on average tangible common equity
|
13.8
|
%
|
19.8
|
%
|
18.6
|
%
|
16.8
|
%
|
19.8
|
%
| ||||||||||||||||||||||
Book value per common share
|
$
|
54.46
|
$
|
54.18
|
$
|
54.04
|
$
|
54.46
|
$
|
54.04
| ||||||||||||||||||||||
Tangible book value per common share
|
$
|
40.07
|
$
|
39.91
|
$
|
40.12
|
$
|
40.07
|
$
|
40.12
| ||||||||||||||||||||||
Excluding integration-related expenses
| ||||||||||||||||||||||||||||||||
Adjusted earnings per diluted share
|
$
|
1.44
|
$
|
2.06
|
$
|
1.89
|
(30
|
%)
|
(24
|
%)
|
$
|
3.51
|
$
|
4.11
|
(15
|
%)
| ||||||||||||||||
Adjusted return on average common equity
|
10.5
|
%
|
15.0
|
%
|
14.1
|
%
|
12.8
|
%
|
15.6
|
%
| ||||||||||||||||||||||
Adjusted return on average tangible common equity
|
14.3
|
%
|
20.3
|
%
|
19.0
|
%
|
17.3
|
%
|
20.1
|
%
| ||||||||||||||||||||||
Financial Ratios:
| ||||||||||||||||||||||||||||||||
Pre-tax profit margin
|
25
|
%
|
31
|
%
|
31
|
%
|
28
|
%
|
33
|
%
| ||||||||||||||||||||||
Compensation and benefits as a % of net revenues
|
42
|
%
|
42
|
%
|
44
|
%
|
42
|
%
|
43
|
%
| ||||||||||||||||||||||
Non-compensation expenses as a % of net revenues
|
32
|
%
|
26
|
%
|
25
|
%
|
29
|
%
|
24
|
%
| ||||||||||||||||||||||
Firm expense efficiency ratio
|
74
|
%
|
69
|
%
|
69
|
%
|
71
|
%
|
68
|
%
| ||||||||||||||||||||||
Firm expense efficiency ratio excluding integration-related expenses
|
73
|
%
|
68
|
%
|
68
|
%
|
70
|
%
|
67
|
%
| ||||||||||||||||||||||
Effective tax rate
|
23.6
|
%
|
19.0
|
%
|
23.1
|
%
|
20.9
|
%
|
22.5
|
%
| ||||||||||||||||||||||
Statistical Data:
| ||||||||||||||||||||||||||||||||
Period end common shares outstanding (millions)
|
1,723
|
1,756
|
1,834
|
(2
|
%)
|
(6
|
%)
| |||||||||||||||||||||||||
Average common shares outstanding (millions)
| ||||||||||||||||||||||||||||||||
Basic
|
1,704
|
1,733
|
1,814
|
(2
|
%)
|
(6
|
%)
|
1,718
|
1,804
|
(5
|
%)
| |||||||||||||||||||||
Diluted
|
1,723
|
1,755
|
1,841
|
(2
|
%)
|
(6
|
%)
|
1,739
|
1,829
|
(5
|
%)
| |||||||||||||||||||||
Worldwide employees
|
78,386
|
76,541
|
71,826
|
2
|
%
|
9
|
%
| |||||||||||||||||||||||||
Notes: | |
- | For the quarters ended June 30, 2022, March 31, 2022 and June 30, 2021, Firm results include pre-tax integration-related expenses of $120 million, $107 million and $90 million ($92 million, $82 million and $69 million after-tax) respectively, reported in the Wealth Management and Investment Management business segments. The six months ended June 30, 2022 and 2021 results include pre-tax integration-related expenses of $227 million and $165 million ($174 million and $127 million after-tax), respectively. |
- | The End Notes are an integral part of this presentation. Refer to the Financial Supplement on pages 12 - 17 for Definition of U.S. GAAP to Non-GAAP Measures, Definitions of Performance Metrics and Terms, Supplemental Quantitative Details and Calculations, and Legal Notice for additional information. |
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Morgan Stanley published this content on 14 July 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 14 July 2022 11:33:00 UTC.