Summary
Morgan Stanley reported net revenues of $14.5 billion and net income of $3.0 billion for the first quarter of 2023, a slight decrease from the prior year's $14.8 billion in net revenues and $3.7 billion in net income. The firm's Return on Tangible Common Equity (ROTCE) was 16.9%, and its expense efficiency ratio was 72%. The Institutional Securities segment saw a 11% decline in net revenues due to lower Investment Banking and Equity/Fixed Income results, partially offset by higher 'Other' revenues. Wealth Management, however, experienced an 11% increase in net revenues, driven by positive mark-to-market gains on deferred compensation plan investments and higher net interest income, despite increased expenses and provisions for credit losses. Investment Management's net revenues decreased by 3%, reflecting lower average assets under management due to market declines. For the quarter, the firm repurchased $1.5 billion of its common stock and announced a quarterly dividend of $0.775 per share. The firm's capital position remains strong, with a Common Equity Tier 1 capital ratio of 15.1% under the standardized approach. The provision for credit losses significantly increased to $234 million, primarily due to a deteriorating macroeconomic outlook and expectations for commercial real estate borrowers. Management highlighted that recent stresses in the banking sector have not significantly impacted Morgan Stanley's results or financial condition.
Financial Highlights
34 data points| Interest Expense | $7.63B |
| Net Income | $2.98B |
| EPS (Basic) | $1.72 |
| EPS (Diluted) | $1.70 |
| Shares Outstanding (Basic) | 1.65B |
| Shares Outstanding (Diluted) | 1.66B |
Key Highlights
- 1Net revenues were $14.5 billion, a slight decrease from $14.8 billion in the prior year quarter.
- 2Net income applicable to Morgan Stanley common shareholders was $2.8 billion, down from $3.5 billion in the prior year quarter.
- 3Institutional Securities net revenues declined 11% to $6.8 billion, impacted by lower Investment Banking and Equity/Fixed Income results.
- 4Wealth Management net revenues increased 11% to $6.6 billion, driven by mark-to-market gains on deferred compensation plan investments and higher net interest income.
- 5Investment Management net revenues decreased 3% to $1.3 billion, reflecting lower average assets under management.
- 6Provision for credit losses rose significantly to $234 million from $57 million in the prior year quarter, primarily due to macroeconomic outlook and commercial real estate concerns.
- 7The firm's Common Equity Tier 1 capital ratio was strong at 15.1% (standardized approach).