MORGAN STANLEY Quarterly Report for Q3 Ended Sep 30, 2018

Summary

Morgan Stanley reported a strong third quarter and first nine months of 2018, with significant year-over-year growth in net revenues and net income. Net revenues increased to $9.87 billion for the quarter and $31.56 billion year-to-date, while net income applicable to Morgan Stanley rose to $2.11 billion for the quarter and $7.22 billion year-to-date. Diluted earnings per share also saw a substantial increase, reaching $1.17 for the quarter and $3.92 year-to-date. The Institutional Securities segment was a key driver of this growth, with net revenues up 13% for the quarter and 17% year-to-date, primarily due to higher revenues from both sales and trading and investment banking activities. The Wealth Management segment also demonstrated resilience, with net revenues up 4% for the quarter and 5% year-to-date, driven by asset management revenues. The Investment Management segment showed mixed results, with a slight decrease in quarterly net revenues but an increase year-to-date. The firm maintained robust capital ratios, with its Common Equity Tier 1 capital ratio at 16.7% and Tier 1 capital ratio at 19.0% as of September 30, 2018, comfortably exceeding regulatory requirements. The firm also continued its capital return initiatives, repurchasing $1.18 billion of common stock in the quarter and announcing a quarterly dividend of $0.30 per share.

Key Highlights

• 1Morgan Stanley reported a 7% increase in quarterly net revenues to $9.87 billion and a 10% increase in year-to-date net revenues to $31.56 billion compared to the prior year periods.
• 2Net income applicable to Morgan Stanley surged by 18% to $2.11 billion for the quarter and by 32% to $7.22 billion year-to-date, demonstrating strong profitability.
• 3Diluted earnings per share (EPS) increased to $1.17 for the quarter, up from $0.93 in the prior year quarter, and to $3.92 year-to-date, up from $2.79 in the prior year period.
• 4The Institutional Securities segment was a significant contributor, with net revenues up 13% for the quarter and 17% year-to-date, driven by strong performance in investment banking and sales & trading.
• 5Wealth Management showed steady growth with net revenues up 4% for the quarter and 5% year-to-date, primarily due to increased asset management revenues.
• 6Capital ratios remained strong and well above regulatory minimums, with the Common Equity Tier 1 capital ratio at 16.7% and Tier 1 capital ratio at 19.0% as of September 30, 2018.
• 7The company returned capital to shareholders through $1.18 billion in common stock repurchases during the quarter and declared a $0.30 per share dividend.

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