MORGAN STANLEY Quarterly Report for Q1 Ended Mar 31, 2010

Summary

Morgan Stanley's (MS) first quarter 2010 results show a significant turnaround from the prior year, driven by a substantial increase in net revenues and a return to profitability. The firm reported a net income applicable to Morgan Stanley of $1.78 billion, a stark contrast to a net loss of $177 million in Q1 2009. This improvement was largely fueled by a strong performance in the Institutional Securities segment, which saw net revenues surge to $5.34 billion from $1.60 billion year-over-year. The Global Wealth Management Group also showed robust growth, with net revenues increasing to $3.11 billion, benefiting significantly from the consolidation of Morgan Stanley Smith Barney (MSSB). Overall, the firm's return to profitability and substantial revenue growth indicate a strengthening operational performance and recovery from the challenging market conditions of the previous year.

Key Highlights

• 1Morgan Stanley reported a net income of $1.78 billion for Q1 2010, a substantial improvement from a net loss of $177 million in Q1 2009.
• 2Net revenues increased significantly to $9.08 billion from $2.90 billion in the prior year quarter, driven by strong performance across all segments.
• 3The Institutional Securities segment was the primary driver of revenue growth, with net revenues increasing to $5.34 billion, up from $1.60 billion in Q1 2009.
• 4The Global Wealth Management Group's net revenues rose to $3.11 billion, benefiting from the consolidation of MSSB and increased client asset balances.
• 5Diluted Earnings Per Share (EPS) improved to $0.99 from a loss of $(0.57) in the prior year quarter.
• 6The firm's capital ratios remained strong, with a Tier 1 capital ratio of 15.1% and a Tier 1 leverage ratio of 6.1% at March 31, 2010.
• 7The company announced the planned disposition of Revel Entertainment Group, LLC, recording a loss of $932 million in discontinued operations.

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