Morgan Stanley Second Quarter 2021 Earnings Results

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Algemeen advies 15/07/2021 14:24
Morgan Stanley Reports Net Revenues of $14.8 Billion, EPS of $1.85 and ROTCE of 18.6%
NEW YORK, July 15, 2021 – Morgan Stanley (NYSE: MS) today reported net revenues of $14.8 billion for the second quarter ended June 30, 2021 compared with $13.7 billion a year ago. Net income applicable to Morgan
Stanley was $3.5 billion, or $1.85 per diluted share,1 compared with net income of $3.2 billion, or $1.96 per diluted share,1
for the same period a year ago. The comparisons of current year results to prior periods were impacted by the acquisitions of E*TRADE Financial Corporation (“E*TRADE”), reported in the Wealth Management segment, and Eaton Vance Corp. (“Eaton Vance”), reported in the Investment Management segment.
James P. Gorman, Chairman and Chief Executive Officer, said, “The Firm delivered another very strong quarter, with
contributions from all of our businesses. Our Wealth and Investment Management businesses attracted $120 billion in flows and Institutional Securities generated over $7 billion in revenues. With our transformed business model providing more stable and durable earnings, we have doubled our dividend and announced a $12 billion buyback as we move to return our excess capital to shareholders. Our global franchise is very well positioned to drive further growth.”


• Firm net revenues of $14.8 billion and net income of $3.5
billion reflect strong performance with contributions across
each of our business segments and geographies.
• The Firm delivered ROTCE of 18.6% or 19.0% excluding the
impact of integration-related expenses.5,6
• The Firm expense efficiency ratio was 69% or 68% excluding
the impact of integration-related expenses.6,7
• Common Equity Tier 1 capital standardized ratio was 16.7%.
• The Firm doubled its quarterly common stock dividend to
$0.70 per share and increased its share repurchase
authorization of outstanding common stock up to $12 billion,
over the next 12 months.
• Institutional Securities net revenues of $7.1 billion reflect
strong results as clients remained active across Investment
Banking and Equity.
• Wealth Management delivered a pre-tax margin of 26.8% or
27.8% excluding integration-related expenses.6,8 Results
reflect higher asset management fees, growth in bank
lending, as well as net new assets and fee-based flows of
$71 billion and $34 billion, respectively.
• Investment Management results reflect strong asset
management fees on AUM of $1.5 trillion which includes
$13.5 billion of positive long-term net flows across all asset

Financial Summary2,3,4
Firm ($ millions, except per share data) 2Q 2021 2Q 2020
Net revenues $14,759 $13,660
Provision for credit losses $73 $239
Compensation expense $6,423 $6,035
Non-compensation expenses $3,697 $3,031
Pre-tax income9 $4,566 $4,355
Net income app. to MS $3,511 $3,196
Expense efficiency ratio7 69% 66%
Earnings per diluted share $1.85 $1.96
Book value per share $54.04 $49.57
Tangible book value per share $40.12 $43.68
Return on equity 13.8% 15.7%
Return on tangible equity5 18.6% 17.8%
Institutional Securities
Net revenues $7,092 $8,199
Investment Banking $2,376 $2,051
Equity $2,827 $2,627
Fixed Income $1,682 $3,041
Wealth Management
Net revenues $6,095 $4,704
Fee-based client assets ($ billions)10 $1,680 $1,236
Fee-based asset flows ($ billions)11 $33.7 $11.1
Net new assets ($ billions)12 $71.2 $20.4
Loans ($ billions) $114.7 $85.2
Investment Management
Net revenues $1,702 $886
AUM ($ billions)13 $1,524 $665
Long-term net flows ($ billions)14 $13.5 $15.4

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