Morgan Stanley Posts Yearly Decline in Net revenues and Income in Q2 2022

Morgan Stanley (NYSE: MS) reported net revenues of $13.1 billion for the second quarter ended June 30, 2022 compared with $14.8 billion a year ago. Net income applicable to Morgan Stanley was $2.5 billion, or $1.39 per diluted share, compared with net income of $3.5 billion, or $1.85 per diluted share, for the same period a year ago. 

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Highlights

• The Firm reported solid results with net revenues of $13.1 billion demonstrating the strength of its diversified franchise as the businesses navigated a challenging market environment.

• The Firm delivered ROTCE of 13.8%, or 14.3% excluding the impact of integration-related expenses.

• The Firm's expense efficiency ratio was 74%, impacted by $200 million related to a specific regulatory matter concerning the use of unapproved personal devices and the Firm's record-keeping requirements. In the first half of the year, the expense efficiency ratio was 71%, or 70% excluding the impact of integration-related expenses.

• The Firm remains in a strong capital position with a Standardized Common Equity Tier 1 capital ratio of 15.2%.

• Institutional Securities net revenues of $6.1 billion reflect strong performance in Fixed Income and Equity as clients remained engaged in volatile markets, while limited activity in Investment Banking was impacted by the uncertain macroeconomic environment.

• Wealth Management delivered a pre-tax margin of 26.5% or 28.2% excluding integration-related expenses. Net revenues were $5.7 billion, negatively impacted by mark-tomarket losses on investments associated with certain employee deferred compensation plans. The business added net new assets of $53 billion in the quarter and $195 billion in the first half of 2022. The quarter also saw continued growth in bank lending and $29 billion of fee-based flows.

• Investment Management net revenues were $1.4 billion. The diversified business delivered solid results despite lower equity markets.