Morgan Stanley reported an 11.6% year-over-year increase in Q3 revenue to $20.338 billion, beating Fiscal AI’s estimate of $20.1096 billion.
- Equity revenue jumped 41% year-over-year to $5.799 billion, while investment banking revenue increased 2%.
- Wealth Management posted record revenue of $9.1 billion, up 10% year over year, and attracted $232 billion in net new assets during the quarter.
- The firm reported a $141 million provision for credit losses, while Investment Management revenue fell 12% to $1.5 billion.
Morgan Stanley (MS) on Wednesday reported higher third-quarter revenue and earnings, supported by a 41% jump in equity revenue and record revenue at its Wealth Management business.
Morgan Stanley reported third-quarter net revenues of $20.338 billion, up 11.6% year over year, beating Fiscal AI’s $20.1096 billion estimate. Earnings per diluted share rose to $3.03 from $2.80 a year earlier, topping Fiscal AI’s $2.91 estimate.
Net interest income (NII), the difference between interest earned and interest expense, rose 30% year over year to $3.25 billion, while non-interest revenue increased 9% to $17.088 billion.
Net income applicable to Morgan Stanley increased to $4.9 billion from $4.6 billion a year earlier.
The provision for credit losses was $141 million, compared with zero in the year-ago quarter. The company said the provision was primarily driven by growth in its corporate and secured-lending portfolios. The quarter also included $105 million in charge-offs related to certain corporate and commercial real estate loans that had largely been provisioned for in prior quarters.
Equity Trading Leads Institutional Securities Growth
Institutional Securities reported net revenues of $10.0 billion, compared with $8.5 billion a year earlier. Equity revenue jumped 41% to $5.799 billion, reflecting strong performance across businesses and regions.
Investment banking net revenues increased 2%. Advisory revenues benefited from higher completed M&A activity in the Americas, while equity underwriting revenues declined amid lower IPOs and blocks, partially offset by higher follow-on offerings.
Fixed-income net revenues fell 7% to $2.011 billion, primarily reflecting lower performance in securitized products and reduced structured activity in commodities.
Wealth Management Posts Record Revenue
Wealth Management reported record net revenues of $9.1 billion, up 10% year over year, and a pre-tax margin of 30.4%. The business attracted $232 billion in net new assets and $80 billion in fee-based flows during the quarter, with just over half of net new assets associated with IPO-related flows.
The bank attributed the revenue performance to record asset-management revenues, higher market levels, strong fee-based flows, continued client engagement and higher net interest income.
The Investment Management segment reported net revenues of $1.5 billion, down 12% year over year. Asset management and related fees increased due to higher average assets under management, but performance-based income and other revenues declined, driven by a reversal of accrued carried interest, primarily related to certain investments in one of the firm’s private funds.
How Retail Views MS
Retail sentiment on Stocktwits shifted to ‘Extremely Bullish’ territory, with message volume at ‘High’ levels over the past 24 hours.
MS shares have gained over 3% year-to-date.
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