Wealth Revenues, Group Net Income Rises At Morgan Stanley

Editorial Staff

17 October 2024

Morgan Stanley said yesterday that revenues in the third quarter of 2024 rose 14 per cent to $7.3 billion from $6.4 billion a year ago. The figure was boosted by the positive effect of deferred compensation plans, the Wall Street firm said.

Record pre-tax income of $2.1 billion in the quarter resulted in a pre-tax margin of 28.3 per cent.

Asset management revenues rose from a year ago on higher asset levels and the cumulative impact of positive fee-based flows.

Transactional revenues rose by 10 per cent, excluding the impact of mark-to-market on investments associated with deferred compensation plans. The rise in transactional revenues was buoyed by higher levels of client activity across products, particularly in Morgan Stanley’s advisor-led channel.

Net interest income fell from a year earlier. The main factor was lower average sweep deposits partially offset by higher yields on the investment portfolio and lending growth.

Total expenses rose to $5.199 billion from $4.654 billion; provision for credit losses narrowed to $11 million from $41 million.

Group results
At the group level, Morgan Stanley said net income was $3.2 billion, up from $2.4 billion.

“The firm reported a strong third quarter in a constructive environment across our global footprint. Total client assets have surpassed $7.5 trillion across wealth and investment management supported by buoyant equity markets and net asset inflows. Our business model is delivering strong returns while accreting capital, producing an ROTCE of 18.2 per cent through the first three quarters of 2024,” Ted Pick, CEO, said.

Net revenue rose to $15.383 billion from $13.273 billion; provision for credit losses dropped to $79 million from $134 million; compensation expenses rose to $6.733 billion from $5.935 billion.

At the end of September, Morgan Stanley had a Common Equity Tier 1 ratio – a standard international yardstick of a bank’s shock absorber capital – of 15.1 per cent. The bank’s cost/efficiency ratio was 72 per cent for the quarter and the year so far.

Shares in the US firm closed up 6.5 per cent yesterday. Quarterly results reportedly beat estimates.