Early Access

10-QPeriod: Q2 FY2020

MORGAN STANLEY Quarterly Report for Q2 Ended Jun 30, 2020

Filed August 4, 2020For Securities:MSMS-PKMS-POMS-PQMS-PAMS-PFMS-PIMS-PLMS-PPMS-PEMSTLW

Summary

Morgan Stanley reported strong financial results for the second quarter of 2020, driven by a significant surge in its Institutional Securities segment. Net revenues reached $13.41 billion, a 31% increase year-over-year, with net income attributable to Morgan Stanley growing by 45% to $3.20 billion. This performance was largely fueled by robust client engagement in sales and trading, which saw a 68% increase in net revenues. The Wealth Management segment demonstrated resilience, delivering $1.14 billion in income before taxes with a 24% pre-tax margin, despite a challenging interest rate environment. The Investment Management segment also saw revenue growth of 6%, driven by higher average assets under management. The Firm maintained strong capital and liquidity positions, with a Common Equity Tier 1 capital ratio of 16.1% and a Liquidity Coverage Ratio of 147%. The firm also provided an update on its planned acquisition of E*TRADE, expecting to close in Q4 2020, subject to regulatory approvals.

Financial Highlights

35 data points
Beta

Net Income

$3.20B

EPS (Diluted)

$1.96

Total Assets

$975.36B

Cash & Equivalents

$106.28B

Free Cash Flow

-$16.81B

Financial Statements
Beta
Interest Expense$758.00M
Net Income$3.20B
EPS (Basic)$1.98
EPS (Diluted)$1.96
Shares Outstanding (Basic)1.54B
Shares Outstanding (Diluted)1.56B

Key Highlights

  • 1Institutional Securities net revenues increased 56% year-over-year to $7.98 billion, driven by strong performance in trading and investment banking.
  • 2Wealth Management reported pre-tax income of $1.14 billion with a 24% pre-tax margin, demonstrating stability.
  • 3Investment Management net revenues increased 6% year-over-year to $886 million, supported by higher average Assets Under Management (AUM).
  • 4Diluted earnings per common share were $1.96, a significant increase from $1.23 in the prior year quarter.
  • 5The Firm maintained robust capital and liquidity ratios, with a Common Equity Tier 1 capital ratio of 16.1% and a Liquidity Coverage Ratio (LCR) of 147%.
  • 6The provision for credit losses on loans and lending commitments was $239 million, reflecting economic conditions, an increase from the prior year.
  • 7The planned acquisition of E*TRADE is on track for expected closing in Q4 2020, with E*TRADE shareholders having approved the transaction.

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