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October 18, 2019

Morgan Stanley wealth revenues remain flat in Q3

The wealth management arm of Morgan Stanley has reported net revenues of $4.39bn for the third quarter (Q3) of 2019, nearly stable compared to the previous year.

The unit registered a pre-tax income of $1.2bn in the quarter ended 30 September 2019, while pre-tax margin was 28.4%.

The division’s asset management revenue in Q3 of 2019 was $2.64bn, up 3% from $2.57bn in the same quarter last year.

However, the unit’s transactional revenues dropped 14% to $595m on a year-on-year basis. The fall was said to be due to investment losses on certain employee deferred compensations plans.

Furthermore, the unit’s net interest income slipped 3%. According to Morgan Stanley, the fall was the result of higher costs related to funding mix changes.

Morgan Stanley wealth management client liabilities stood at $86bn at the end of September 2019, rising nearly 4% from $83bn a year ago.

Net revenues at the bank’s Investment Management arm jumped 17% year-on-year to $764m, while pre-tax income surged 62% to $165m from $102m.

Overall, the banking group reported net revenues of $10bn for the Q3 of 2019, up 1% from $9.9bn a year ago.

Morgan Stanley chairman and CEO James Gorman said: “We delivered strong quarterly earnings despite the typical summer slowdown and volatile markets.

“Firmwide revenues were over $10bn for the third consecutive quarter, and we produced an ROE within our target range.

“Our consistent performance shows the stability of our business model. We remain committed to controlling our expenses and are well positioned to pursue our growth initiatives.”

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