Financial Summary2,3 | ||||||||
Firm ($ millions, except per share data)
| 1Q 2022 |
1Q 2021 | ||||||
Net revenues
|
$
|
14,801
|
$
|
15,719
| ||||
Provision for credit losses
|
$
|
57
|
$
|
(98
|
)
| |||
Compensation expense
|
$
|
6,274
|
$
|
6,798
| ||||
Non-compensation expenses
|
$
|
3,882
|
$
|
3,675
| ||||
Pre-tax income10 |
$
|
4,588
|
$
|
5,344
| ||||
Net income app. to MS
|
$
|
3,666
|
$
|
4,120
| ||||
Expense efficiency ratio7 |
69
|
%
|
67
|
%
| ||||
Earnings per diluted share
|
$
|
2.02
|
$
|
2.19
| ||||
Book value per share
|
$
|
54.18
|
$
|
52.71
| ||||
Tangible book value per share
|
$
|
39.91
|
$
|
38.97
| ||||
Return on equity
|
14.7
|
%
|
16.9
|
%
| ||||
Return on tangible equity5 |
19.8
|
%
|
21.1
|
%
| ||||
Institutional Securities
| ||||||||
Net revenues
|
$
|
7,657
|
$
|
8,577
| ||||
Investment Banking
|
$
|
1,634
|
$
|
2,613
| ||||
Equity
|
$
|
3,174
|
$
|
2,875
| ||||
Fixed Income
|
$
|
2,923
|
$
|
2,966
| ||||
Wealth Management
| ||||||||
Net revenues
|
$
|
5,935
|
$
|
5,959
| ||||
Fee-based client assets ($ billions)11 |
$
|
1,873
|
$
|
1,574
| ||||
Fee-based asset flows ($ billions)12 |
$
|
97.2
|
$
|
37.2
| ||||
Net new assets ($ billions)9 |
$
|
142.0
|
$
|
104.9
| ||||
Loans ($ billions)
|
$
|
136.7
|
$
|
104.9
| ||||
Investment Management
| ||||||||
Net revenues
|
$
|
1,335
|
$
|
1,314
| ||||
AUM ($ billions)13 |
$
|
1,447
|
$
|
1,419
| ||||
Long-term net flows ($ billions)14 |
$
|
(14.4
|
)
|
$
|
16.3
|
•
|
The Firm delivered its second highest quarterly net revenues4 of $14.8 billion on continued strong performance and contributions across our businesses.
|
•
|
The Firm delivered ROTCE of 19.8%5,6 in a volatile and uncertain market environment.
|
•
|
The Firm maintained expense discipline and delivered an efficiency ratio of 69%6,7 while continuing to invest in our businesses.
|
•
|
Common Equity Tier 1 capital standardized ratio was 14.5%.
|
•
|
Institutional Securities net revenues of $7.7 billion reflect strong performance in Equity and Fixed Income on continued strong client engagement in volatile markets and in Advisory on higher completed M&A transactions.
|
•
|
Wealth Management delivered a pre-tax margin of 26.5% or 27.8% excluding integration-related expenses.6,8 Results reflect higher asset management fees and continued growth in bank lending. The business added net new assets of $142 billion, including an asset acquisition.9 |
•
|
Investment Management results reflect incremental fee-based asset management revenues and higher average AUM as a result of the acquisition of Eaton Vance.
|
Media Relations: Wesley McDade 212-761-2430
|
Investor Relations: Leslie Bazos 212-761-5352
|
•
|
Advisory revenues nearly doubled from a year ago driven by higher levels of completed M&A transactions.
|
•
|
Equity underwriting revenues significantly decreased from a year ago on lower issuances in line with market volumes in an uncertain market environment.
|
•
|
Fixed income underwriting revenues decreased from a year ago as macroeconomic conditions contributed to lower bond issuances.
|
•
|
Equity net revenues increased from a year ago reflecting strong performance across businesses and geographies, particularly in EMEA, as a result of continued client engagement and the absence of a single client credit event a year ago.
|
•
|
Fixed Income net revenues were in line with a strong quarter a year ago reflecting higher revenues in commodities and foreign exchange which benefitted from elevated levels of client activity and market volatility in the current quarter, offset by lower revenues in credit products.
|
•
|
Other revenues decreased from a year ago driven by mark-to-market losses on investments associated with certain employee deferred compensation plans and corporate loans held for sale, net of related hedges.
|
($ millions)
| 1Q 2022 |
1Q 2021 | ||||||
Net Revenues
|
$
|
7,657
|
$
|
8,577
| ||||
Investment Banking
|
$
|
1,634
|
$
|
2,613
| ||||
Advisory
|
$
|
944
|
$
|
480
| ||||
Equity underwriting
|
$
|
258
|
$
|
1,502
| ||||
Fixed income underwriting
|
$
|
432
|
$
|
631
| ||||
Equity
|
$
|
3,174
|
$
|
2,875
| ||||
Fixed Income
|
$
|
2,923
|
$
|
2,966
| ||||
Other
|
$
|
(74
|
)
|
$
|
123
| |||
Provision for credit losses
|
$
|
44
|
$
|
(93
|
)
| |||
Total Expenses
|
$
|
4,826
|
$
|
5,299
| ||||
Compensation
|
$
|
2,604
|
$
|
3,114
| ||||
Non-compensation
|
$
|
2,222
|
$
|
2,185
|
•
|
Provision for credit losses increased from a year ago due to portfolio growth and the prior year quarter reflecting a release in the allowance for credit losses.
|
•
|
Compensation expense decreased from a year ago primarily driven by reduced discretionary compensation on lower revenues and a decline related to certain deferred compensation plans linked to investment performance.
|
•
|
Asset management revenues increased 14% reflecting higher asset levels driven by positive fee-based flows and market appreciation from a year ago.
|
•
|
Transactional revenues15 decreased 20% excluding the impact of mark-to-market losses on investments associated with certain employee deferred compensation plans. Results reflect a decrease in client activity from significantly elevated levels a year ago.
|
•
|
Net interest income increased from a year ago on continued bank lending growth.
|
•
|
Compensation expense decreased driven by a decline related to certain deferred compensation plans linked to investment performance, partially offset by higher compensable revenues.
|
($ millions)
| 1Q 2022 |
1Q 2021 | ||||||
Net Revenues
|
$
|
5,935
|
$
|
5,959
| ||||
Asset management
|
$
|
3,626
|
$
|
3,191
| ||||
Transactional15 |
$
|
635
|
$
|
1,228
| ||||
Net interest income
|
$
|
1,540
|
$
|
1,385
| ||||
Other
|
$
|
134
|
$
|
155
| ||||
Provision for credit losses
|
$
|
13
|
$
|
(5
|
)
| |||
Total Expenses
|
$
|
4,349
|
$
|
4,364
| ||||
Compensation
|
$
|
3,125
|
$
|
3,170
| ||||
Non-compensation
|
$
|
1,224
|
$
|
1,194
|
•
|
Non-compensation expenses increased from a year ago primarily driven by higher professional services expenses and investments in technology, partially offset by lower brokerage and clearing costs.
|
•
|
Asset management and related fees increased from a year ago driven by incremental revenues as a result of the timing of the Eaton Vance acquisition. AUM were impacted by market volatility and outflows in the current period.
|
•
|
Performance-based income and other revenues decreased from a year ago reflecting lower revenues from carried interest and mark downs on investments due to a decline in global asset prices and mark-to-market losses on investments associated with certain employee deferred compensation plans.
|
($ millions)
| 1Q 2022 |
1Q 2021 | ||||||
Net Revenues
|
$
|
1,335
|
$
|
1,314
| ||||
Asset management and related fees
|
$
|
1,388
|
$
|
1,103
| ||||
Performance-based income and other
|
$
|
(53
|
)
|
$
|
211
| |||
Total Expenses
|
$
|
1,107
|
$
|
944
| ||||
Compensation
|
$
|
545
|
$
|
514
| ||||
Non-compensation
|
$
|
562
|
$
|
430
|
•
|
Compensation expense increased from a year ago primarily driven by the Eaton Vance acquisition,6 partially offset by a decline related to certain deferred compensation plans linked to investment performance and lower compensation associated with carried interest.
|
•
|
Non-compensation expenses increased from a year ago primarily driven by incremental expenses as a result of the Eaton Vance acquisition.6 |
•
|
The Firm repurchased $2.9 billion of its outstanding common stock during the quarter as part of its Share Repurchase Program.
|
•
|
The Board of Directors declared a $0.70 quarterly dividend per share, payable on May 13, 2022 to common shareholders of record on April 29, 2022.
|
•
|
Common Equity Tier 1 capital standardized ratio was 14.5%, down from a year ago, largely reflecting higher RWAs, the change in Other comprehensive income (loss) and the Firm's capital actions.
|
•
|
The effective tax rate for the quarter was 19.0%,20 which reflected a higher benefit associated with employee share-based payments from a year ago.
|
1Q 2022 |
1Q 2021 | |||||||
Capital16 | ||||||||
Standardized Approach
| ||||||||
CET1 capital17 |
14.5
|
%
|
16.7
|
%
| ||||
Tier 1 capital17 |
16.0
|
%
|
18.5
|
%
| ||||
Advanced Approach
| ||||||||
CET1 capital17 |
15.9
|
%
|
17.4
|
%
| ||||
Tier 1 capital17 |
17.6
|
%
|
19.2
|
%
| ||||
Leverage-based capital
| ||||||||
Tier 1 leverage18 |
6.8
|
%
|
7.5
|
%
| ||||
SLR19 |
5.5
|
%
|
6.7
|
%
| ||||
Common Stock Repurchases
| ||||||||
Repurchases ($ millions)
|
$
|
2,872
|
$
|
2,135
| ||||
Number of Shares (millions)
|
30
|
28
| ||||||
Average Price
|
$
|
95.20
|
$
|
77.47
| ||||
Period End Shares (millions)
|
1,756
|
1,869
| ||||||
Tax Rate20 |
19.0
|
%
|
22.0
|
%
|
1Q 2022 |
1Q 2021 | |||||||
Firm | ||||||||
Compensation
|
$
|
10
|
$
|
33
| ||||
Non-compensation
|
97
|
42
| ||||||
Total non-interest expenses
|
$
|
107
|
$
|
75
| ||||
Total non-interest expenses (after-tax)
|
$
|
82
|
$
|
58
| ||||
Wealth Management | ||||||||
Compensation
|
$
|
1
|
$
|
30
| ||||
Non-compensation
|
74
|
34
| ||||||
Total non-interest expenses
|
$
|
75
|
$
|
64
| ||||
Total non-interest expenses (after-tax)
|
$
|
57
|
$
|
49
| ||||
Investment Management | ||||||||
Compensation
|
$
|
9
|
$
|
3
| ||||
Non-compensation
|
23
|
8
| ||||||
Total non-interest expenses
|
$
|
32
|
$
|
11
| ||||
Total non-interest expenses (after-tax)
|
$
|
25
|
$
|
9
|
Consolidated Income Statement Information
| ||||||||||||||||||||
(unaudited, dollars in millions)
| ||||||||||||||||||||
Quarter Ended
|
Percentage Change From:
| |||||||||||||||||||
Mar 31, 2022
|
Dec 31, 2021
|
Mar 31, 2021
|
Dec 31, 2021
|
Mar 31, 2021
| ||||||||||||||||
Revenues:
| ||||||||||||||||||||
Investment banking
|
$
|
1,758
|
$
|
2,581
|
$
|
2,840
|
(32
|
%)
|
(38
|
%)
| ||||||||||
Trading
|
3,983
|
2,394
|
4,225
|
66
|
%
|
(6
|
%)
| |||||||||||||
Investments
|
75
|
632
|
318
|
(88
|
%)
|
(76
|
%)
| |||||||||||||
Commissions and fees
|
1,416
|
1,307
|
1,626
|
8
|
%
|
(13
|
%)
| |||||||||||||
Asset management
|
5,119
|
5,395
|
4,398
|
(5
|
%)
|
16
|
%
| |||||||||||||
Other
|
234
|
126
|
284
|
86
|
%
|
(18
|
%)
| |||||||||||||
Total non-interest revenues
|
12,585
|
12,435
|
13,691
|
1
|
%
|
(8
|
%)
| |||||||||||||
Interest income
|
2,650
|
2,411
|
2,437
|
10
|
%
|
9
|
%
| |||||||||||||
Interest expense
|
434
|
322
|
409
|
35
|
%
|
6
|
%
| |||||||||||||
Net interest
|
2,216
|
2,089
|
2,028
|
6
|
%
|
9
|
%
| |||||||||||||
Net revenues
|
14,801
|
14,524
|
15,719
|
2
|
%
|
(6
|
%)
| |||||||||||||
Provision for credit losses
|
57
|
5
|
(98
|
)
|
*
|
*
| ||||||||||||||
Non-interest expenses:
| ||||||||||||||||||||
Compensation and benefits
|
6,274
|
5,487
|
6,798
|
14
|
%
|
(8
|
%)
| |||||||||||||
Non-compensation expenses:
| ||||||||||||||||||||
Brokerage, clearing and exchange fees
|
882
|
811
|
910
|
9
|
%
|
(3
|
%)
| |||||||||||||
Information processing and communications
|
829
|
833
|
733
|
--
|
13
|
%
| ||||||||||||||
Professional services
|
705
|
829
|
624
|
(15
|
%)
|
13
|
%
| |||||||||||||
Occupancy and equipment
|
427
|
479
|
405
|
(11
|
%)
|
5
|
%
| |||||||||||||
Marketing and business development
|
175
|
205
|
146
|
(15
|
%)
|
20
|
%
| |||||||||||||
Other
|
864
|
991
|
857
|
(13
|
%)
|
1
|
%
| |||||||||||||
Total non-compensation expenses
|
3,882
|
4,148
|
3,675
|
(6
|
%)
|
6
|
%
| |||||||||||||
Total non-interest expenses
|
10,156
|
9,635
|
10,473
|
5
|
%
|
(3
|
%)
| |||||||||||||
Income before provision for income taxes
|
4,588
|
4,884
|
5,344
|
(6
|
%)
|
(14
|
%)
| |||||||||||||
Provision for income taxes
|
873
|
1,168
|
1,176
|
(25
|
%)
|
(26
|
%)
| |||||||||||||
Net income
|
$
|
3,715
|
$
|
3,716
|
$
|
4,168
|
--
|
(11
|
%)
| |||||||||||
Net income applicable to nonredeemable noncontrolling interests
|
49
|
20
|
48
|
145
|
%
|
2
|
%
| |||||||||||||
Net income applicable to Morgan Stanley
|
3,666
|
3,696
|
4,120
|
(1
|
%)
|
(11
|
%)
| |||||||||||||
Preferred stock dividend
|
124
|
104
|
138
|
19
|
%
|
(10
|
%)
| |||||||||||||
Earnings applicable to Morgan Stanley common shareholders
|
$
|
3,542
|
$
|
3,592
|
$
|
3,982
|
(1
|
%)
|
(11
|
%)
| ||||||||||
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:
| |||||||||||||||||||
Mar 31, 2022
|
Dec 31, 2021
|
Mar 31, 2021
|
Dec 31, 2021
|
Mar 31, 2021
| ||||||||||||||||
Financial Metrics:
| ||||||||||||||||||||
Earnings per basic share
|
$
|
2.04
|
$
|
2.05
|
$
|
2.22
|
--
|
(8
|
%)
| |||||||||||
Earnings per diluted share
|
$
|
2.02
|
$
|
2.01
|
$
|
2.19
|
--
|
(8
|
%)
| |||||||||||
Return on average common equity
|
14.7
|
%
|
14.7
|
%
|
16.9
|
%
| ||||||||||||||
Return on average tangible common equity
|
19.8
|
%
|
19.8
|
%
|
21.1
|
%
| ||||||||||||||
Book value per common share
|
$
|
54.18
|
$
|
55.12
|
$
|
52.71
| ||||||||||||||
Tangible book value per common share
|
$
|
39.91
|
$
|
40.91
|
$
|
38.97
| ||||||||||||||
Excluding integration-related expenses
| ||||||||||||||||||||
Adjusted earnings per diluted share
|
$
|
2.06
|
$
|
2.08
|
$
|
2.22
|
(1
|
%)
|
(7
|
%)
| ||||||||||
Adjusted return on average common equity
|
15.0
|
%
|
15.2
|
%
|
17.1
|
%
| ||||||||||||||
Adjusted return on average tangible common equity
|
20.3
|
%
|
20.4
|
%
|
21.4
|
%
| ||||||||||||||
Financial Ratios:
| ||||||||||||||||||||
Pre-tax profit margin
|
31
|
%
|
34
|
%
|
34
|
%
| ||||||||||||||
Compensation and benefits as a % of net revenues
|
42
|
%
|
38
|
%
|
43
|
%
| ||||||||||||||
Non-compensation expenses as a % of net revenues
|
26
|
%
|
29
|
%
|
23
|
%
| ||||||||||||||
Firm expense efficiency ratio
|
69
|
%
|
66
|
%
|
67
|
%
| ||||||||||||||
Firm expense efficiency ratio excluding integration-related expenses
|
68
|
%
|
65
|
%
|
66
|
%
| ||||||||||||||
Effective tax rate
|
19.0
|
%
|
23.9
|
%
|
22.0
|
%
| ||||||||||||||
Statistical Data:
| ||||||||||||||||||||
Period end common shares outstanding (millions)
|
1,756
|
1,772
|
1,869
|
(1
|
%)
|
(6
|
%)
| |||||||||||||
Average common shares outstanding (millions)
| ||||||||||||||||||||
Basic
|
1,733
|
1,751
|
1,795
|
(1
|
%)
|
(3
|
%)
| |||||||||||||
Diluted
|
1,755
|
1,785
|
1,818
|
(2
|
%)
|
(3
|
%)
| |||||||||||||
Worldwide employees
|
76,541
|
74,814
|
70,975
|
2
|
%
|
8
|
%
| |||||||||||||
Notes: | |
- |
For the quarters ended March 31, 2022, December 31, 2021 and March 31, 2021, Firm results include pre-tax integration-related expenses of $107 million, $146 million and $75 million ($82 million, $114 million and $58 million after-tax) respectively, reported in the Wealth Management and Investment Management business segments.
|
- |
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 April 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 14 April 2022 11:34:08 UTC.