Morgan Stanley’s wealth management unit has reported pre-tax income of US$655 million for the second quarter of 2013, a 60% increase from US$410 million in the corresponding year ago period.
The wealth unit’s pretax profit margin was 18.5% in the quarter, up from 12% a year earlier. Morgan Stanley’s wealth management business, which recently took 100% ownership of Smith Barney, had set a target of 20% pretax margin when the merger was first announced, but later said 15% was a reasonable goal until markets fully recovered.
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Net revenues for the current quarter increased 9% to US$3.5 billion from US$3.2 billion in the corresponding quarter of 2012.
As of 30 June 2013, total client assets were US$1.8 trillion. Client assets in fee based accounts were US$629 billion, or 35% of total client assets. Fee based asset flows for the quarter were US$10 billion.
Wealth Management representatives of 16,321 declined from 16,478 as of June 30, 2012. Average annualized revenue per representative of $866,000 and total client assets per representative of US$109 million increased 12% and 10%, respectively, compared with the prior year quarter.
"We look forward to the full benefits of the recently completed wealth management acquisition," Morgan Stanley chief executive James Gorman said in a statement.
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By GlobalDataThe banks’ investment management division reported pre-tax income of US$160 million for the second quarter of 2013, compared with pretax income of US$43 million in last year’s second quarter. The quarter’s pre-tax margin was 24%.
Overall, Morgan Stanley’s net income rose to US$980 million, or 41 cents a share, from $591 million, or 29 cents, a year earlier, an increase of 66%.
