The US firm continued a series of Q3 reports from large financial organizations, with results reflecting market gains and rising inflows. Provisions for credit losses increased in the quarter from the year before, however.

Morgan Stanley has reported a rise in group net revenues of $13.3 billion for the third quarter ended September 30, rising from around $13.0 billion a year ago.

Net income applicable to Morgan Stanley was $2.4 billion, or $1.38 per diluted share, compared with net income of $2.6 billion, or $1.47 per diluted share, the Wall Street-listed firm said in a statement yesterday. 

Compensation costs rose to $5.935 billion from $5.614 billion. The firm provided more for potential credit losses, rising to $134 million from $35 million in the same quarter of 2022. Return on tangible equity dipped to 13.5 per cent from 14.6 per cent. 

“Our equity and fixed income businesses navigated markets well, and both wealth and investment management produced higher revenues and profits year-over-year,” James Gorman, chief executive, said.

Wealth management delivered a pre-tax margin of 26.7 per cent, the firm said. Its net revenues stood at $6.404 billion, reflecting increased asset management revenues on higher average asset levels compared with a year ago. The quarter included fee-based flows of $22.5 billion, rising from $16.7 billion.

Wealth management net revenues rose to $6.404 billion in the quarter from $6.12 billion a year earlier. Net new assets stood at $35.7 billion, falling from $64.8 billion. Total fee-based client assets were $1.857 billion at the end of the quarter, it said.

Within the investment management arm, Morgan Stanley logged net revenues of $1.336 billion, up from $1.168 billion. Assets under management rose to $1.388 trillion at the end of the quarter, up from $1.279 trillion at the end of September 2022.

The firm said its Common Equity Tier 1 ratio – a standard international measure of a bank’s capital buffer to deal with shocks – was 15.5 per cent, on a “standardized approach,” up from 14.8 per cent a year earlier. Its Tier 1 leverage ratio was 6.7 per cent.