Revenues and net attributable income dipped at the US firm in the first quarter. Like its peers, it made larger provisions for credit losses.

Morgan Stanley yesterday reported it made net revenues of $14.5 billion for Q1 2023, down from $14.8 billion a year ago. Net income applicable to shareholders was $3 billion, down from $3.7 billion a year before.

At its wealth management business, net revenues rose in Q1 to $6.6 billion from $5.9 billion a year before, it said in a statement yesterday. On the asset management side, revenues were hit by falling asset levels. Net interest income rose as central bank interest rates rose.

Fee-based asset flows decelerated sharply to $22.4 billion in the first quarter from $97.2 billion a year before. Net new assets also fell, at $109.6 billion in Q1, from $142 billion.

“The investments we have made in our wealth management business continue to bear fruit as we added a robust $110 billion in net new assets this quarter.

Equity and fixed Income revenues were strong, although investment banking activity continued to be constrained,” James P Gorman, chairman and chief executive, said.

At the overall group level, provision for credit losses rose to $234 million, up from $57 million – continuing a pattern of banks increasing their provisions this year. Compensation costs rose to $6.41 billion, from $6.274 billion. Non-compensation costs rose to $4.113 billion from $3.882 billion.

Return on equity fell to 12.4 per cent from 14.7 per cent.

The firm had a Common Equity Tier 1 capital ratio of 15.1 per cent.