Morgan Stanley Posts Its Second Highest Quarterly Net Revenues of $14.8bn for Q1 2022

Morgan Stanley (NYSE: MS) today reported financial results for the first quarter 2022. The result shows net revenues of $14.8 billion for the first quarter ended March 31, 2022 compared with $15.7 billion a year ago. Net income applicable to Morgan Stanley was $3.7 billion, or $2.02 per diluted share, compared with net income of $4.1 billion, or $2.19 per diluted share, for the same period a year ago.

James P. Gorman, Chairman and Chief Executive Officer, said, "The Firm delivered a strong ROTCE of 20% in the face of market volatility and economic uncertainty, demonstrating the resilience of our global diversified business. Institutional Securities navigated volatility on behalf of clients extraordinarily well, Wealth Management's margin proved resilient and the business added $142 billion net new assets in the quarter, and Investment Management benefited from its diversification. The quarter's results affirm our sustainable business model is well positioned to drive growth over the long term."

Financial Highlights for the First Quarter 2022

• The Firm delivered its second highest quarterly net revenues of $14.8 billion on continued strong performance and contributions across its businesses.

• The Firm delivered ROTCE of 19.8% in a volatile and uncertain market environment.

• The Firm maintained expense discipline and delivered an efficiency ratio of 69% while continuing to invest in its businesses.

• Common Equity Tier 1 capital standardized ratio was 14.5%.

• Institutional Securities reported net revenues for the current quarter of $7.7 billion compared with $8.6 billion a year ago. Pre-tax income was $2.8 billion compared with $3.4 billion a year ago. This reflects strong performance in Equity and Fixed Income on continued strong client engagement in volatile markets and in Advisory on higher completed M&A transactions.

• Wealth Management reported net revenues of $5.9 billion and pre-tax income of $1.6 billion in the current quarter, in line with a year ago, resulting in a reported pre-tax margin of 26.5% or 27.8% excluding the impact of integration-related expenses. Results reflect higher asset management fees and continued growth in bank lending.The business added net new assets of $142 billion, including an asset acquisition.

• Investment Management reported net revenues of $1.3 billion and pre-tax income was $228 million compared with $370 million a year ago. Results reflect incremental fee-based asset management revenues and higher average AUM as a result of the acquisition of Eaton Vance.

• Provision for credit losses increased from a year ago due to portfolio growth and the prior year quarter reflecting a release in the allowance for credit losses.

• Compensation expense decreased from a year ago primarily driven by reduced discretionary compensation on lower revenues and a decline related to certain deferred compensation plans linked to investment performance.