What were the main drivers of the revenue decline in the Institutional Securities segment?

The decline in Institutional Securities' net revenues was primarily driven by lower sales and trading revenues, affected by macroeconomic uncertainties that impacted market sentiment and trading performance, as well as lower investment banking revenues due to reduced underwriting and advisory activity.

How did the Wealth Management segment perform compared to the previous year?

The Wealth Management segment showed growth, with net revenues increasing by 2% year-over-year. This was mainly due to higher transactional revenues, particularly from increased gains related to investments tied to employee deferred compensation plans.

What is the firm's capital position and what capital actions were taken?

Morgan Stanley maintained a strong capital position, with its Common Equity Tier 1 capital ratio at 16.3%, exceeding regulatory requirements. During the quarter, the firm repurchased approximately $1.2 billion of its common stock and announced an increased quarterly common stock dividend of $0.35 per share, signaling confidence in its financial strength.

Are there any significant upcoming accounting changes impacting the firm?

Yes, Morgan Stanley is preparing for the adoption of the Current Expected Credit Losses (CECL) methodology for financial instruments, expected to be adopted on January 1, 2020. While preliminary analyses suggest no significant impact, the ultimate effect will depend on macroeconomic conditions and portfolio composition at adoption.

MORGAN STANLEY 10-Q Quarterly Report Q2 FY2019

Summary

Morgan Stanley's 10-Q filing for the period ending June 29, 2019, indicates a slight decrease in net revenues and net income compared to the prior year's second quarter and the first half of the year. This decline is primarily attributed to weaker performance in the Institutional Securities segment, specifically in sales and trading, and investment banking, influenced by macroeconomic uncertainties. Conversely, the Wealth Management and Investment Management segments demonstrated resilience, with net revenues increasing, driven by factors like higher transactional revenues in Wealth Management and investment gains in Investment Management. The firm maintained strong capital ratios, exceeding regulatory requirements. During the quarter, Morgan Stanley repurchased approximately $1.2 billion of its common stock as part of its ongoing share repurchase program. The company also announced an increase in its quarterly common stock dividend to $0.35 per share, reflecting confidence in its financial position and capital management strategy. Investors should note the ongoing investments in technology, which are impacting non-compensation expenses, and the company's preparation for evolving regulatory changes, such as the adoption of CECL.

Financial Highlights

34 data points

Beta

Net Income

$2.20B

EPS (Diluted)

$1.23

Total Assets

$891.96B

Cash & Equivalents

$79.58B

Free Cash Flow

$10.53B

Financial Statements

Beta

Interest Expense	$3.48B
Net Income	$2.20B
EPS (Basic)	$1.24
EPS (Diluted)	$1.23
Shares Outstanding (Basic)	1.63B
Shares Outstanding (Diluted)	1.66B

Key Highlights

1Net revenues for the second quarter of 2019 were $10.24 billion, a decrease from $10.61 billion in the prior year quarter.
2Net income applicable to Morgan Stanley for the second quarter of 2019 was $2.20 billion, or $1.23 per diluted share, down from $2.44 billion, or $1.30 per diluted share, in the prior year quarter.
3Institutional Securities segment net revenues decreased by 11% year-over-year, primarily due to lower sales and trading and investment banking revenues.
4Wealth Management segment net revenues increased by 2% year-over-year, driven by higher transactional revenues.
5Investment Management segment net revenues increased by 21% year-over-year, primarily due to higher gains from investments.
6The firm's Common Equity Tier 1 capital ratio remained strong at 16.3%, well above regulatory minimums.
7Morgan Stanley repurchased approximately $1.2 billion of common stock during the quarter and announced a common stock dividend of $0.35 per share.

MORGAN STANLEY Quarterly Report for Q2 Ended Jun 30, 2019

Summary

Financial Highlights

Key Highlights

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