Summary
Morgan Stanley's first quarter 2016 results showed a significant year-over-year decline in net revenues and net income, primarily driven by weaker performance in its Institutional Securities segment. Net revenues decreased to $7.79 billion from $9.91 billion in the prior year quarter, while net income applicable to Morgan Stanley fell to $1.13 billion, or $0.55 per diluted share, compared to $2.39 billion, or $1.18 per diluted share, in Q1 2015. The decline in Institutional Securities was largely attributed to challenging market conditions in fixed income and commodities trading and underwriting, though equity trading and M&A advisory showed resilience. Wealth Management experienced a modest revenue decrease, impacted by lower transactional revenues, partially offset by growth in net interest income. Investment Management revenues also declined due to losses in private equity and real estate funds. Despite the revenue challenges, Morgan Stanley demonstrated expense control, with total non-interest expenses decreasing by 6% year-over-year, largely due to lower litigation costs and a reduction in compensation and benefits expenses reflecting lower revenues and headcount. The firm maintained strong regulatory capital ratios, with its Common Equity Tier 1 capital ratio at 15.6%, well above regulatory requirements.
Financial Highlights
35 data points| Interest Expense | $848.00M |
| Net Income | $1.13B |
| EPS (Basic) | $0.56 |
| EPS (Diluted) | $0.55 |
| Shares Outstanding (Basic) | 1.88B |
| Shares Outstanding (Diluted) | 1.92B |
Key Highlights
- 1Net revenues decreased by 21.4% to $7.79 billion compared to $9.91 billion in the prior year quarter.
- 2Net income applicable to Morgan Stanley decreased by 52.6% to $1.13 billion, or $0.55 per diluted share, from $2.39 billion, or $1.18 per diluted share, in Q1 2015.
- 3Institutional Securities segment net revenues declined 32% to $3.71 billion, impacted by weaker trading and underwriting performance, partially offset by strength in equity trading and M&A advisory.
- 4Wealth Management net revenues decreased 4% to $3.67 billion, reflecting lower transactional revenues but supported by growth in net interest income.
- 5Investment Management net revenues fell 29% to $477 million due to losses in private equity and real estate funds.
- 6Total non-interest expenses decreased by 6% to $6.05 billion, driven by lower compensation and benefits and reduced litigation costs.
- 7The firm's Common Equity Tier 1 capital ratio remained strong at 15.6%, exceeding regulatory requirements.