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Morgan Stanley's Q3 Revenues, Net Income Rise

Tom Burroughes, Group Editor , October 16, 2020


The results came out a few days after Morgan Stanley said it had agreed to buy Eaton Vance, the asset manager, and after completing its purchase of discount brokerage E*TRADE. Wealth management AuM increased in the third quarter.

Morgan Stanley’s net revenues were $11.7 billion in the third quarter – rising from $10 billion a year before. The organization chalked up net income in Q3 of $2.7 billion, up from $2.2 billion a year before.

The Wall Street firm, which last week announced that it is buying asset management house Eaton Vance, said that its wealth management arm delivered pre-tax income of $1.1 billion with a reported pre-tax margin of 24.0 per cent. It said the results “reflect strong fee-based flows and significant increases in bank lending and deposits."

Net revenues in Q3, 2020 stood at $4.657 billion in the wealth management side, up from $4.358 billion a year earlier. Fee-based client assets in wealth management reached $1.333 trillion at the end of September this year, up from $1.186 trillion a year before. Wealth management total compensation rose to $2.684 billion from $2.34 billion a year ago.

Morgan Stanley said that its provision for credit losses on loans and lending commitments was $111 million for Q3, compared with $51 million a year earlier, but down from Q2 this year. A number of banks have had to increase provisions in recent months to allow for the likely disruptions caused by COVID-19.

Besides its recently-announced Eaton Vance purchase, Morgan Stanley has completed its acquisition of discount brokerage E*TRADE, part of a consolidation play in the space.

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