10-QPeriod: Q3 FY2022

MORGAN STANLEY Quarterly Report for Q3 Ended Sep 30, 2022

Filed November 3, 2022For Securities:MSMS-PKMS-POMS-PQMS-PAMS-PFMS-PIMS-PLMS-PPMS-PEMSTLW

Summary

Morgan Stanley's third quarter of 2022 report shows net revenues of $13.0 billion, a decrease from $14.8 billion in the prior year quarter, reflecting a volatile market backdrop. Net income applicable to Morgan Stanley was $2.6 billion, or $1.47 per diluted share, down from $3.7 billion, or $1.98 per diluted share, in the prior year quarter. The firm's ROTCE (Return on Tangible Common Equity) was 14.6%, or 15.2% excluding integration-related expenses. The Institutional Securities segment experienced a 22% decline in net revenues, primarily due to lower investment banking and equity results, though fixed income performance was strong. Wealth Management demonstrated resilience with a 3% increase in net revenues, driven by higher net interest income, and added $65 billion in net new assets for the quarter. Investment Management saw a 20% decrease in net revenues amidst a challenging market environment. Total assets remained relatively stable at $1.16 trillion. The firm maintained strong capital ratios, with a Common Equity Tier 1 capital ratio of 14.8% under the standardized approach. Liquidity resources were robust, with total liquidity resources of $308 billion, and the firm remained compliant with regulatory liquidity requirements. The company also announced a quarterly dividend of $0.775 per share and a significant new share repurchase authorization of up to $20 billion.

Financial Highlights

35 data points
Beta

Net Income

$2.63B

EPS (Diluted)

$1.47

Total Assets

$1.16T

Cash & Equivalents

$111.70B

Free Cash Flow

-$7.55B

Financial Statements
Beta
Interest Expense$3.59B
Net Income$2.63B
EPS (Basic)$1.49
EPS (Diluted)$1.47
Shares Outstanding (Basic)1.67B
Shares Outstanding (Diluted)1.70B

Key Highlights

  • 1Net revenues of $13.0 billion for Q3 2022, down from $14.8 billion in Q3 2021.
  • 2Net income applicable to Morgan Stanley of $2.6 billion, or $1.47 per diluted share, down from $3.7 billion, or $1.98 per diluted share, in the prior year quarter.
  • 3ROTCE of 14.6% (15.2% excluding integration costs), reflecting a challenging market.
  • 4Institutional Securities net revenues decreased 22% year-over-year, driven by lower investment banking and equity trading.
  • 5Wealth Management net revenues increased 3% year-over-year, boosted by higher net interest income, and added $65 billion in net new assets.
  • 6Common Equity Tier 1 capital ratio stood at 14.8% (Standardized approach) at quarter-end.
  • 7Total liquidity resources remained strong at $308 billion.

Frequently Asked Questions

Morgan Stanley reported net revenues of $13.0 billion and net income applicable to Morgan Stanley of $2.6 billion, or $1.47 per diluted share, for the third quarter of 2022. This represents a decrease compared to the prior year quarter, reflecting a challenging market environment.

The Institutional Securities segment saw a significant decline in net revenues (down 22%) due to lower investment banking and equity trading activity, although fixed income performed well. Wealth Management showed resilience with a 3% increase in net revenues, driven by higher net interest income, and substantial net new asset inflows of $65 billion. The Investment Management segment experienced a 20% decrease in net revenues due to market conditions.

Morgan Stanley maintained a strong capital position with a Common Equity Tier 1 capital ratio of 14.8% (Standardized approach) at September 30, 2022. Liquidity resources were robust, totaling $308 billion, and the firm remained compliant with regulatory liquidity requirements.

The company announced a quarterly common stock dividend of $0.775 per share. Additionally, a new multi-year share repurchase authorization of up to $20 billion was approved, to be exercised from time to time as conditions warrant.