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October 17, 2022

Morgan Stanley registers nearly 30% dip in Q3 profits

Morgan Stanley has posted a net income of $2.6bn for the third quarter of 2022, a decline of nearly 30% compared with $3.7bn in the year ago quarter.

The bank’s net revenues declined 12% to $13bn from $14.8bn in the third quarter of 2021.

For the third quarter ended 30 September 2022, the group’s pre-tax income was $3.3bn as against $4.9bn a year ago.

Net revenues at the bank’s wealth management unit rose 3% to $6.1bn from $5.9bn in the year ago period.

The division’s pre-tax margin stood at 26.9% or 28.4% excluding integration-related costs.

The wealth management arm added net new assets of $65bn, increasing the overall net new assets year-to-date to $260bn.

Net quarterly revenues at the bank’s investment management arm slipped to $1.1bn from $1.4bn in the third quarter of last year.

Morgan Stanley noted that its investment management arm posted quarterly net revenues of $1.2bn on $1.3tn assets under management (AUM) ‘in a challenging market environment’.

The firm’s institutional securities division reported net revenues of $5.8bn for the third quarter versus $7.5bn in the year ago period.

Morgan Stanley CEO James Gorman said: “Firm performance was resilient and balanced in an uncertain and difficult environment, delivering a 15% return on tangible common equity.

“Wealth Management added an additional $65bn in net new assets and produced a pre-tax margin of 28%, excluding integration-related expenses, demonstrating scale and stability despite declining asset values.

“While Investment Banking and Investment Management were impacted by the market environment, Fixed Income and Equity navigated challenging markets well. We continue to maintain our strong capital position while repurchasing $2.6bn of shares and distributing a healthy dividend.”

Furthermore, Gorman indicated that the investment bank might carry out layoffs amid workforce assessment by senior executives at the firm, according to Bloomberg.

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