Morgan Stanley Reports Fourth Quarter Net Revenues of $10.9
Billion and EPS of $1.30; Full Year Net Revenues of $41.4 Billion
and EPS of $5.19
Morgan Stanley (NYSE: MS) today reported net revenues of
$10.9 billion for the fourth quarter ended December 31, 2019
compared with $8.5 billion a year ago. Net income applicable to
Morgan Stanley was $2.2 billion, or $1.30 per diluted share,1
compared with net income of $1.5 billion, or $0.80 per diluted
share,1 for the same period a year ago. The current quarter
included an intermittent net discrete tax benefit of $158 million
or $0.10 per diluted share compared with an intermittent net
discrete tax benefit of $111 million or $0.07 per diluted share a
year ago.2 The fourth quarter of 2019 was also impacted by
severance costs of $172 million associated with a December employee
action.3
Full year net revenues were a record $41.4 billion compared with
$40.1 billion a year ago. Net income applicable to Morgan Stanley
for the current year was $9.0 billion, or $5.19 per diluted share,1
compared with net income of $8.7 billion, or $4.73 per diluted
share,1 a year ago. The current year included an intermittent net
discrete tax benefit of $348 million, or $0.21 per diluted share
compared with an intermittent net discrete tax benefit of $203
million or $0.12 per diluted share a year ago.2
James P. Gorman, Chairman and Chief Executive Officer,
said, “We delivered strong quarterly earnings across all of our
businesses. Firmwide revenues were over $10 billion for the fourth
consecutive quarter, resulting in record full year revenues and net
income. This consistent performance met all of our stated
performance targets.”
Financial Summary4
Highlights
Firm ($MM, except per share
data)
4Q
2019
4Q
2018
FY
2019
FY
2018
- Fourth quarter net revenues 27% increase helped deliver record
full year net revenues of $41.4 billion.
- Achieved record full year net income reflecting the strength
and balance of the franchise.
- Full year ROE of 11.7%5 and ROTCE of 13.4% 5 in line with our
target ranges.
- Institutional Securities reflects the fourth consecutive
quarter of net revenues over $5 billion. Results for the full year
reflect solid performance across products despite a mixed market
backdrop.
- Wealth Management delivered a pre-tax margin of 27.2% for the
full year reflecting record net revenues and pre-tax income.6,
7
- Investment Management results reflect both a strong quarter and
full year on accrued carried interest and higher fee revenues. AUM
up 19% reflecting continued strong positive net flows.
Net revenues
$10,857
$8,548
$41,419
$40,107
Compensation expense
$5,228
$3,787
$18,837
$17,632
Non-compensation expenses
$2,896
$2,904
$11,281
$11,238
Pre-tax income7
$2,733
$1,857
$11,301
$11,237
Net income app. to MS
$2,239
$1,531
$9,042
$8,748
Expense efficiency ratio8
75%
78%
73%
72%
Earnings per diluted share
$1.30
$0.80
$5.19
$4.73
Book value per share
$45.82
$42.20
$45.82
$42.20
Tangible book value per share
$40.01
$36.99
$40.01
$36.99
Return on equity5
11.3%
7.7%
11.7%
11.8%
Return on tangible equity5
13.0%
8.8%
13.4%
13.5%
Institutional Securities
Net revenues
$5,054
$3,839
$20,386
$20,582
Investment Banking
$1,576
$1,417
$5,734
$6,088
Sales & Trading
$3,194
$2,487
$13,695
$13,777
Wealth Management
Net revenues
$4,582
$4,144
$17,737
$17,242
Fee-based client assets ($Bn)9
$1,267
$1,046
$1,267
$1,046
Fee-based asset flows ($Bn)10
$24.9
$16.2
$64.9
$65.9
Loans ($Bn)
$80.1
$72.2
$80.1
$72.2
Investment Management
Net revenues
$1,356
$684
$3,763
$2,746
AUM ($Bn)11
$552
$463
$552
$463
Long-term net flows ($Bn)12
$6.7
$(3.2)
$15.4
$4.8
Fourth Quarter Results
Institutional Securities
Institutional Securities reported net revenues for the current
quarter of $5.1 billion compared with $3.8 billion a year ago.
Pre-tax income was $1.1 billion compared with $780 million a year
ago.7
Investment Banking revenues up 11% from
a year ago:
($ millions)
4Q
2019
4Q
2018
- Advisory revenues decreased from a year ago driven by lower
levels of completed M&A activity.
Net Revenues
$5,054
$3,839
- Equity underwriting revenues increased from a year ago driven
by higher revenues on IPOs, particularly in Asia, and follow-on
offerings.
Investment Banking
$1,576
$1,417
- Fixed income underwriting revenues increased from a year ago
primarily driven by higher investment grade and non-investment
grade bond fees.
Advisory
$654
$734
Equity underwriting
$422
$323
Fixed income underwriting
$500
$360
Sales and Trading net revenues up 28%
from a year ago:
- Equity sales and trading net revenues were in line with a year
ago reflecting continued strength in prime brokerage and solid
results in cash equities, partially offset by declines in
derivatives on lower volatility.
Sales and Trading
$3,194
$2,487
Equity
$1,920
$1,929
- Fixed Income sales and trading net revenues increased from a
year ago reflecting improvement across all businesses with
particular strength in credit products.
Fixed Income
$1,273
$564
Other
$1
$(6)
- Other sales and trading net revenues compared with a year ago
reflect gains on investments associated with certain employee
deferred compensation plans, offset by losses on economic hedges
associated with corporate lending activity.
Investments and Other
$284
$(65)
Investments and Other:
Investments
$68
$(52)
- Investment revenues increased from a year ago driven by
mark-to-market net gains on holdings of publicly traded investments
compared with net losses in the prior year.
Other
$216
$(13)
- Other revenues increased from a year ago primarily related to
mark-to-market gains associated with corporate lending activity and
a gain on sale of a commodities related intangible asset.
Total Expenses
$3,929
$3,059
Compensation
$2,057
$1,179
Total Expenses:
Non-compensation
$1,872
$1,880
- Compensation expense increased from a year ago driven by higher
revenues, increases in the fair value of deferred compensation plan
referenced investments and severance costs associated with the
December employee action of $124 million. 3
Wealth Management
Wealth Management reported net revenues for the current quarter
of $4.6 billion compared with $4.1 billion a year ago. Pre-tax
income of $1.2 billion7 in the current quarter resulted in a
pre-tax margin of 25.4%.6
Net revenues up 11% from a year
ago:
- Asset management revenues increased from a year ago reflecting
higher asset levels with record positive flows.
($ millions)
4Q
2019
4Q
2018
Net Revenues
$4,582
$4,144
- Transactional revenues13 increased from a year ago primarily
driven by gains on investments associated with certain employee
deferred compensation plans and increases in investment banking
activity.
Asset management
$2,655
$2,576
Transactional13
$829
$422
- Net interest income decreased 6% compared with a year ago
primarily driven by changes in funding mix. Wealth Management
client liabilities14 were $90 billion at quarter end compared with
$83 billion a year ago.
Net interest
$1,033
$1,095
Other
$65
$51
Total Expenses:
Total Expenses
$3,419
$3,134
- Compensation expense increased from a year ago primarily driven
by increases in the fair value of deferred compensation plan
referenced investments and severance costs associated with the
December employee action 3 partially offset by decreases in
retention note expense.
Compensation
$2,590
$2,286
Non-compensation
$829
$848
Investment Management
Investment Management reported net revenues of $1.4 billion
compared with $684 million a year ago. Pre-tax income was $447
million compared with $74 million a year ago.7
Net revenues up 98% from a year
ago:
($ millions)
4Q
2019
4Q
2018
- Asset management revenues increased from a year ago driven by
higher levels of AUM on strong net flows and higher performance
fees.
Net Revenues
$1,356
$684
Asset management
$736
$628
- Investment revenues increased from a year ago on accrued
carried interest related to an underlying investment’s initial
public offering, subject to sales restrictions, within an Asia
private equity fund managed on behalf of clients.
Investments
$670
$82
Other
$(50)
$(26)
- Other revenues were negative $50 million compared with negative
$26 million in the prior year. Results include impairments of two
distinct equity method investments in third party asset managers,
one in each year.
Total Expenses
$909
$610
Total Expenses:
Compensation
$581
$322
- Compensation expense increased from a year ago principally due
to an increase in carried interest and severance costs associated
with the December employee action. 3
Non-compensation
$328
$288
- Non-compensation expenses increased from a year ago driven by
higher brokerage and clearing costs, relating to higher fee revenue
and client capital raising.
Full Year Results
Institutional Securities
- Institutional Securities net revenues reflect a strong
performance across all businesses which resulted in pre-tax income
of $5.5 billion compared with $6.3 billion in the prior year.
7
($ millions)
FY
2019
FY
2018
Net Revenues
$20,386
$20,582
- Investment Banking net revenues declined from a year ago.
Results reflect solid underwriting revenues which were essentially
unchanged from a strong prior year, offset by declines in advisory
revenues on lower completed M&A volumes.
Investment Banking
$5,734
$6,088
Sales and Trading
$13,695
$13,777
- Sales and Trading net revenues were in line with the prior
year. Fixed Income sales and trading increased 11% from a year ago
on strong client engagement while Equity sales and trading net
revenues decreased in an environment characterized by lower cash
market volumes and lower volatility in derivatives.
Investments
$325
$182
Other
$632
$535
- Investment revenues increased from a year ago reflecting
mark-to-market net gains on publicly traded investments.
- Other revenues increased from a year ago reflecting
mark-to-market gains on corporate lending activity partially offset
by lower results in our Japanese joint venture Mitsubishi UFJ
Morgan Stanley Securities Co., Ltd.
Total Expenses
$14,896
$14,322
Compensation
$7,433
$6,958
- Compensation expense increased from a year ago driven by
increases in the fair value of deferred compensation plan
referenced investments, higher salaries and severance costs
associated with the December employee action, 3 partially offset by
lower discretionary incentive compensation.
Non-compensation
$7,463
$7,364
- Non-compensation expenses increased from a year ago reflecting
higher technology costs, partially offset by lower professional
services.
Wealth Management
- Wealth Management’s record pre-tax income of $4.8 billion
delivered a pre-tax margin of 27.2%. 6,7
($ millions)
FY
2019
FY
2018
Net Revenues
$17,737
$17,242
- Asset management revenues increased modestly from a year ago as
the impact of higher asset levels during the year were offset by
lower fee based client asset levels at the beginning of the year
due to significant market declines in the fourth quarter of
2018.
Asset management
$10,199
$10,158
Transactional13
$2,969
$2,558
- Transactional revenues 13 increased from a year ago primarily
driven by gains on investments associated with certain employee
deferred compensation plans.
Net interest
$4,222
$4,277
Other
$347
$249
- Net interest income remained essentially unchanged from a year
ago reflecting higher costs due to changes in funding mix and
increases in mortgage securities prepayment amortization expense
partially offset by the impact of higher average rates and growth
in bank lending.
Total Expenses
$12,905
$12,721
- Other revenues increased from a year ago driven by higher
realized gains on available for sale securities.
Compensation
$9,774
$9,507
Non-compensation
$3,131
$3,214
- Compensation expense increased from a year ago primarily driven
by increases in the fair value of deferred compensation plan
referenced investments and higher salaries, partially offset by
decreases in retention note expense.
- Non-compensation expenses decreased 3% from a year ago
reflecting continued focus on expense discipline.
Investment Management
- Investment Management net revenues increased 37% from a year
ago, resulting in pre-tax income of $985 million compared with $464
million in the prior year. 7
($ millions)
FY
2019
FY
2018
Net Revenues
$3,763
$2,746
- Asset management revenues increased from a year ago driven by
higher levels of AUM on strong net flows and higher performance
fees.
Asset management
$2,629
$2,468
Investments
$1,213
$254
- Investment revenues increased from a year ago on accrued
carried interest primarily in Asia private equity.
Other
$(79)
$24
- Other revenues were negative $79 million compared with positive
revenues a year ago, driven by the deconsolidation of a fund and
impairments on equity method investments.
Total Expenses
$2,778
$2,282
Compensation
$1,630
$1,167
- Compensation expense increased from a year ago principally due
to an increase in carried interest.
Non-compensation
$1,148
$1,115
- Non-compensation expenses increased from a year ago driven by
higher brokerage and clearing costs, relating to higher fee revenue
and client capital raising.
Other Matters
4Q
2019
4Q
2018
FY
2019
FY
2018
- The Firm repurchased $1.5 billion of its outstanding common
stock during the quarter as part of its Share Repurchase Program.
During the year ended December 31, 2019, the Firm repurchased $5.4
billion of its common stock or approximately 121 million
shares.
Common Stock
Repurchases
Repurchases ($MM)
$1,500
$1,180
$5,360
$4,860
- The Board of Directors declared a $0.35 quarterly dividend per
share, payable on February 14, 2020 to common shareholders of
record on January 31, 2020.
Number of Shares (MM)
31
27
121
97
Average Price
$48.49
$43.77
$44.23
$50.08
- The effective tax rate for the current quarter was 15.7% and
the full year was 18.3% which included intermittent net discrete
tax benefits of $158 million and $348 million, respectively. The
effective tax rate in the prior year quarter was 16.2% and the full
year was 20.9%, which included intermittent net discrete tax
benefits of $111 million and $203 million, respectively. The
intermittent net discrete tax benefits in the current and prior
year periods were primarily associated with remeasurement of
reserves as a result of new information pertaining to the
resolution of multi-jurisdiction tax examinations and other tax
matters.
Period End Shares (MM)
1,594
1,700
1,594
1,700
Tax Rate
15.7%
16.2%
18.3%
20.9%
Capital15
Common Equity Tier 1
capital16
16.4%
16.9%
Tier 1 capital16
18.6%
19.2%
Tier 1 leverage17
8.2%
8.4%
SLR18
6.3%
6.5%
Morgan Stanley is a leading global financial services firm
providing a wide range of investment banking, securities, wealth
management and investment management services. With offices in more
than 41 countries, the Firm’s employees serve clients worldwide
including corporations, governments, institutions and individuals.
For further information about Morgan Stanley, please visit
www.morganstanley.com.
A financial summary follows. Financial, statistical and
business-related information, as well as information regarding
business and segment trends, is included in the Financial
Supplement. Both the earnings release and the Financial Supplement
are available online in the Investor Relations section at
www.morganstanley.com.
NOTICE:
The information provided herein and in the financial supplement
may include certain non-GAAP financial measures. The definition of
such measures or reconciliation of such metrics to the comparable
U.S. GAAP figures are included in this earnings release and the
Financial Supplement, both of which are available on
www.morganstanley.com.
This earnings release may contain forward-looking statements,
including the attainment of certain financial and other targets,
objectives and goals. Readers are cautioned not to place undue
reliance on forward-looking statements, which speak only as of the
date on which they are made, which reflect management’s current
estimates, projections, expectations, assumptions, interpretations
or beliefs and which are subject to risks and uncertainties that
may cause actual results to differ materially. The Firm does not
undertake to update the forward-looking statements to reflect the
impact of circumstances or events that may arise after the date
such forward-looking statements were made. For a discussion of
risks and uncertainties that may affect the future results of the
Firm, please see “Forward-Looking Statements” immediately preceding
Part I, Item 1, “Competition” and “Supervision and Regulation” in
Part I, Item 1, “Risk Factors” in Part I, Item 1A, “Legal
Proceedings” in Part I, Item 3, “Management’s Discussion and
Analysis of Financial Condition and Results of Operations” in Part
II, Item 7 and “Quantitative and Qualitative Disclosures about
Risk” in Part II, Item 7A in the Firm’s Annual Report on Form 10-K
for the year ended December 31, 2018 and other items throughout the
Form 10-K, the Firm’s Quarterly Reports on Form 10-Q and the Firm’s
Current Reports on Form 8-K, including any amendments thereto.
1 Includes preferred dividends related to the calculation of
earnings per share for the fourth quarter of 2019 and 2018 of
approximately $154 million and $170 million, respectively. Includes
preferred dividends related to the calculation of earnings per
share for the years ended 2019 and 2018 of approximately $530
million and $526 million, respectively.
2 The intermittent net discrete tax benefits in the current and
prior year periods were primarily associated with remeasurement of
reserves as a result of new information pertaining to the
resolution of multi-jurisdiction tax examinations and other tax
matters.
3 The Firm recorded severance costs of $172 million in the
fourth quarter of 2019, associated with a business unit and
infrastructure December employee action, which were reported in the
business segments’ results as follows: Institutional Securities
$124 million, Wealth Management $37 million and Investment
Management $11 million.
4 The Firm prepares its Consolidated Financial Statements using
accounting principles generally accepted in the United States (U.S.
GAAP). From time to time, Morgan Stanley may disclose certain
“non-GAAP financial measures” in the course of its earnings
releases, earnings conference calls, financial presentations and
otherwise. The Securities and Exchange Commission defines a
“non-GAAP financial measure” as a numerical measure of historical
or future financial performance, financial positions, or cash flows
that is subject to adjustments that effectively exclude, or include
amounts from the most directly comparable measure calculated and
presented in accordance with U.S. GAAP. Non-GAAP financial measures
disclosed by Morgan Stanley are provided as additional information
to analysts, investors and other stakeholders in order to provide
them with greater transparency about, or an alternative method for
assessing our financial condition, operating results, or
prospective regulatory capital requirements. These measures are not
in accordance with, or a substitute for U.S. GAAP, and may be
different from or inconsistent with non-GAAP financial measures
used by other companies. Whenever we refer to a non-GAAP financial
measure, we will also generally define it or present the most
directly comparable financial measure calculated and presented in
accordance with U.S. GAAP, along with a reconciliation of the
differences between the non-GAAP financial measure we reference and
such comparable U.S. GAAP financial measure.
5 Return on average common equity and return on average tangible
common equity are non-GAAP financial measures that the Firm
considers useful for analysts, investors and other stakeholders to
allow better comparability of period-to-period operating
performance and capital adequacy. The calculation of return on
average common equity and return on average tangible common equity
represents full year net income or annualized net income applicable
for the quarter applicable to Morgan Stanley less preferred
dividends as a percentage of average common equity and average
tangible common equity, respectively. Tangible common equity, also
a non-GAAP financial measure, represents common equity less
goodwill and intangible assets net of allowable mortgage servicing
rights deduction.
6 Pre-tax margin is a non-GAAP financial measure that the Firm
considers useful for analysts, investors and other stakeholders to
assess operating performance. Pre-tax margin represents income
(loss) before taxes divided by net revenues.
7 Pre-tax income is a non-GAAP financial measure that the Firm
considers useful for analysts, investors and other stakeholders to
assess operating performance. Pre-tax income represents income
(loss) before taxes.
8 The Firm expense efficiency ratio represents total
non-interest expenses as a percentage of net revenues.
9 Wealth Management fee-based client assets represent the amount
of assets in client accounts where the basis of payment for
services is a fee calculated on those assets.
10 Wealth Management fee-based asset flows include net new
fee-based assets, net account transfers, dividends, interest, and
client fees and exclude institutional cash management related
activity.
11 AUM is defined as assets under management.
12 Long-term net flows include the Equity, Fixed Income and
Alternative/Other asset classes and exclude the Liquidity asset
class.
13 Transactional revenues include investment banking, trading,
and commissions and fee revenues.
14 Wealth Management client liabilities reflect U.S. Bank
Subsidiaries’ lending and broker-dealer margin activity. U.S. Bank
refers to the Firm’s U.S. Bank operating subsidiaries Morgan
Stanley Bank, N.A. and Morgan Stanley Private Bank, National
Association.
15 Capital ratios are estimates as of the press release date,
January 16, 2020.
16 The Firm’s risk-based capital ratios for purposes of
determining regulatory compliance are the lower of the capital
ratios computed under the (i) standardized approaches for
calculating credit risk and market risk risk-weighted assets
(“RWAs”) (the “Standardized Approach”); and (ii) applicable
advanced approaches for calculating credit risk, market risk and
operational risk RWAs (the “Advanced Approach”). At December 31,
2019 and December 31, 2018, the Firm’s ratios are based on the
Standardized Approach. For information on the calculation of
regulatory capital and ratios for prior periods, please refer to
the Firm’s Annual Report on Form 10-K for the year ended December
31, 2018.
17 The Tier 1 leverage ratio is a non-risk based capital
requirement that measures the Firm’s leverage. Tier 1 leverage
ratio utilizes Tier 1 capital as the numerator and average adjusted
assets as the denominator.
18 The Firm must maintain a Tier 1 supplementary leverage ratio
of 5% inclusive of a capital buffer of at least 2% in order to
avoid limitations on capital distributions, including dividends and
stock repurchases, and discretionary bonus payments to executive
officers. The Firm’s Supplementary Leverage Ratio utilizes a Tier 1
capital numerator of approximately $73.3 billion and $70.6 billion,
and supplementary leverage exposure denominator of approximately
$1.16 trillion and $1.09 trillion, for the fourth quarter of 2019
and 2018, respectively.
Morgan Stanley Consolidated Income Statement
Information (unaudited, dollars in millions)
Quarter Ended Percentage Change From: Twelve
Months Ended Percentage Dec 31, 2019 Sep 30,
2019 Dec 31, 2018 Sep 30, 2019 Dec 31,
2018 Dec 31, 2019 Dec 31, 2018 Change
Revenues: Investment banking
$ 1,696
$ 1,635
$ 1,488
4%
14%
$ 6,163
$ 6,482
(5%)
Trading
2,314
2,608
1,736
(11%)
33%
11,095
11,551
(4%)
Investments
739
87
28
* *
1,540
437
* Commissions and fees
984
990
1,046
(1%)
(6%)
3,919
4,190
(6%)
Asset management
3,451
3,363
3,266
3%
6%
13,083
12,898
1%
Other
240
131
(5)
83%
*
925
743
24%
Total non-interest revenues
9,424
8,814
7,559
7%
25%
36,725
36,301
1%
Interest income
3,952
4,350
4,111
(9%)
(4%)
17,098
13,892
23%
Interest expense
2,519
3,132
3,122
(20%)
(19%)
12,404
10,086
23%
Net interest
1,433
1,218
989
18%
45%
4,694
3,806
23%
Net revenues
10,857
10,032
8,548
8%
27%
41,419
40,107
3%
Non-interest expenses: Compensation and benefits
5,228
4,427
3,787
18%
38%
18,837
17,632
7%
Non-compensation expenses: Occupancy and equipment
375
353
358
6%
5%
1,428
1,391
3%
Brokerage, clearing and exchange fees
633
637
598
(1%)
6%
2,493
2,393
4%
Information processing and communications
567
557
529
2%
7%
2,194
2,016
9%
Marketing and business development
200
157
220
27%
(9%)
660
691
(4%)
Professional services
555
531
605
5%
(8%)
2,137
2,265
(6%)
Other
566
660
594
(14%)
(5%)
2,369
2,482
(5%)
Total non-compensation expenses
2,896
2,895
2,904
--
--
11,281
11,238
--
Total non-interest expenses
8,124
7,322
6,691
11%
21%
30,118
28,870
4%
Income (loss) from continuing operations before taxes
2,733
2,710
1,857
1%
47%
11,301
11,237
1%
Income tax provision / (benefit) from continuing operations
428
492
300
(13%)
43%
2,064
2,350
(12%)
Income (loss) from continuing operations
2,305
2,218
1,557
4%
48%
9,237
8,887
4%
Gain (loss) from discontinued operations after tax
0
0
1
--
*
0
(4)
* Net income (loss)
$ 2,305
$ 2,218
$ 1,558
4%
48%
$ 9,237
$ 8,883
4%
Net income applicable to nonredeemable noncontrolling interests
66
45
27
47%
144%
195
135
44%
Net income (loss) applicable to Morgan Stanley
2,239
2,173
1,531
3%
46%
9,042
8,748
3%
Preferred stock dividend / Other
154
113
170
36%
(9%)
530
526
1%
Earnings (loss) applicable to Morgan Stanley common shareholders
$ 2,085
$ 2,060
$ 1,361
1%
53%
$ 8,512
$ 8,222
4%
____________________________ The End Notes are an integral part of
this presentation. Refer to the Financial Supplement on pages 12 -
17 for Definition of U.S. GAAP to Non-GAAP Measures, Definition of
Performance Metrics and Terms, Supplemental Quantitative Details
and Calculations and Legal Notice for additional information.
10
Morgan Stanley Consolidated Financial Metrics, Ratios and
Statistical Data (unaudited) Quarter Ended
Percentage Change From: Twelve Months Ended
Percentage Dec 31, 2019 Sep 30, 2019 Dec
31, 2018 Sep 30, 2019 Dec 31, 2018 Dec 31,
2019 Dec 31, 2018 Change Financial
Metrics: Earnings per basic share
$ 1.33
$ 1.28
$ 0.81
4%
64%
$ 5.26
$ 4.81
9%
Earnings per diluted share
$ 1.30
$ 1.27
$ 0.80
2%
63%
$ 5.19
$ 4.73
10%
Return on average common equity
11.3%
11.2%
7.7%
11.7%
11.8%
Return on average tangible common equity
13.0%
12.9%
8.8%
13.4%
13.5%
Book value per common share
$ 45.82
$ 45.49
$ 42.20
$ 45.82
$ 42.20
Tangible book value per common share
$ 40.01
$ 39.73
$ 36.99
$ 40.01
$ 36.99
Excluding intermittent net discrete tax provision / benefit
Adjusted earnings per diluted share
$ 1.20
$ 1.21
$ 0.73
(1%)
64%
$ 4.98
$ 4.61
8%
Adjusted return on average common equity
10.5%
10.7%
7.1%
11.2%
11.5%
Adjusted return on average tangible common equity
12.0%
12.3%
8.1%
12.9%
13.2%
Financial Ratios: Pre-tax profit margin
25%
27%
22%
27%
28%
Compensation and benefits as a % of net revenues
48%
44%
44%
45%
44%
Non-compensation expenses as a % of net revenues
27%
29%
34%
27%
28%
Firm expense efficiency ratio
75%
73%
78%
73%
72%
Effective tax rate from continuing operations
15.7%
18.2%
16.2%
18.3%
20.9%
Statistical Data: Period end common
shares outstanding (millions)
1,594
1,624
1,700
(2%)
(6%)
Average common shares outstanding (millions) Basic
1,573
1,604
1,674
(2%)
(6%)
1,617
1,708
(5%)
Diluted
1,602
1,627
1,705
(2%)
(6%)
1,640
1,738
(6%)
Worldwide employees
60,431
60,532
60,348
--
--
____________________________ The End Notes are an integral part of
this presentation. Refer to the Financial Supplement on pages 12 -
17 for Definition of U.S. GAAP to Non-GAAP Measures, Definition of
Performance Metrics and Terms, Supplemental Quantitative Details
and Calculations and Legal Notice for additional information.
11
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