Morgan Stanley Fourth Quarter and Full Year 2023 Earnings Results

Rhea-AI Summary

Morgan Stanley (MS) reported net revenues of $12.9 billion for Q4 2023, with an EPS of $0.85 and ROTCE of 8.4%. Full year net revenues were $54.1 billion with an EPS of $5.18 and ROTCE of 12.8%. The firm delivered full year ROTCE of 12.8%, but faced headwinds including $353 million in severance costs, $286 million for an FDIC special assessment, and $249 million for a legal charge.

Positive

• Morgan Stanley reported a solid ROTCE of 12.8% for the full year.
• The firm's full year was negatively impacted by expenses related to severance costs, an FDIC special assessment, and a legal charge.

Negative

• The firm's net income applicable to Morgan Stanley was $1.5 billion for Q4 2023, compared to $2.2 billion a year ago.
• Pre-tax income for Q4 includes $535 million of charges, impacting the firm's financials.

Insights

Financial Analyst

Morgan Stanley's financial results for the fourth quarter and full year indicate a mix of stability and challenges. The slight increase in net revenues year-over-year, from $53.7 billion to $54.1 billion, suggests resilience in the face of market headwinds. However, a closer look reveals a decline in net income from $11.0 billion to $9.1 billion, which is significant and reflects increased costs, including legal charges and FDIC assessments.

The reported ROTCE (Return on Tangible Common Equity) of 12.8% for the full year, although solid, marks a decrease from the previous year's 15.3%. This decline in profitability metrics is noteworthy as ROTCE is a key measure of how effectively a financial institution is using its capital to generate profits. A lower ROTCE can impact investor perception of the firm's efficiency and could potentially influence the stock price.

Expense efficiency ratios have increased year-over-year, from 73% to 77%, indicating that expenses are taking up a larger portion of revenues. This could be a concern for cost management and profitability going forward. Additionally, the full-year results were negatively impacted by one-time charges, which may be viewed as non-recurring but still affect the bottom line.

Market Research Analyst

Morgan Stanley's performance in different segments reflects broader market trends and the firm's strategic positioning. The Institutional Securities segment, which includes Investment Banking, Equity and Fixed Income, showed a decline in net revenues and pre-tax income year-over-year. This may be attributed to reduced client activity and a less favorable market environment, which are indicative of wider economic uncertainty and could signal cautious investor sentiment.

On the other hand, Wealth Management's increase in net revenues, driven by higher net interest income and mark-to-market gains, demonstrates the segment's resilience and the effectiveness of Morgan Stanley's diversified business model. The significant addition of $282 billion in net new assets reflects the firm's strong client acquisition and retention strategies, which are crucial in a competitive landscape.

Investment Management's stable net revenues and a slight increase in pre-tax income suggest steady performance in a fluctuating market. The increase in AUM to $1.5 trillion is a positive sign of growth and client trust in the firm's asset management capabilities.

Economist

The financial results of Morgan Stanley provide insights into the broader economic environment. The firm's performance in various segments can be seen as a reflection of economic trends such as interest rate fluctuations, investor confidence and market volatility. The mixed results, with some segments outperforming others, indicate a complex economic landscape where financial services firms must navigate various challenges.

The higher provisions for credit losses, particularly in the commercial real estate sector, suggest potential economic softening in certain areas. This could be an early indicator of stress in the real estate market, which often precedes broader economic downturns. Economists would monitor such trends closely, as they can have far-reaching implications for the financial sector and the economy at large.

Furthermore, the increased non-compensation expenses, including technology investments, reflect the ongoing need for financial institutions to innovate and adapt to a rapidly changing digital landscape. This is essential for maintaining competitiveness but also adds to the cost structure, which can impact profitability in the short term.

Morgan Stanley Reports Fourth Quarter Net Revenues of $12.9 Billion, EPS of $0.85 and ROTCE of 8.4%; Full Year Net Revenues of $54.1 Billion, EPS of $5.18 and ROTCE of 12.8%

NEW YORK--(BUSINESS WIRE)-- Morgan Stanley (NYSE: MS) today reported net revenues of $12.9 billion for the fourth quarter ended December 31, 2023 compared with $12.7 billion a year ago. Net income applicable to Morgan Stanley was $1.5 billion, or $0.85 per diluted share,¹ compared with $2.2 billion, or $1.26 per diluted share,¹ for the same period a year ago.

Pre-tax income for the fourth quarter includes $535 million of charges or $0.28 per diluted share^1,2: $286 million related to an FDIC special assessment and a $249 million legal charge related to a specific matter.

Full year net revenues were $54.1 billion compared with $53.7 billion a year ago. Net income applicable to Morgan Stanley was $9.1 billion, or $5.18 per diluted share,¹ compared with $11.0 billion, or $6.15 per diluted share,¹ a year ago.

Ted Pick, Chief Executive Officer, said, “In 2023, the Firm reported a solid ROTCE against a mixed market backdrop and a number of headwinds. We begin 2024 with a clear and consistent business strategy and a unified leadership team. We are focused on achieving our long-term financial goals and continuing to deliver for shareholders.”

Financial Summary3,4						Full Year Highlights
Firm ($MM, except per share data)	4Q 2023	4Q 2022		FY 2023	FY 2022
						The Firm reported full year net revenues of $54.1 billion and net income of $9.1 billion. The Firm delivered full year ROTCE of 12.8%.5 The full year Firm expense efficiency ratio was 77%.9 The full year was negatively impacted by expenses related to severance costs of $353 million, an FDIC special assessment of $286 million, a $249 million legal charge related to a specific matter, and integration-related expenses of $293 million. Standardized Common Equity Tier 1 capital ratio was 15.2%.18 Institutional Securities reported full year net revenues of $23.1 billion reflecting lower completed activity in Investment Banking and lower results in Equity and Fixed Income on reduced client activity and a less favorable market environment compared to a year ago. Wealth Management delivered full year net revenues of $26.3 billion, reflecting mark-to-market gains on investments associated with DCP versus losses a year ago and higher net interest income.6 The pre-tax margin was 24.9%.7,8 The business added net new assets of $282 billion, representing a full-year 7% annualized growth rate from beginning period assets.12 Investment Management reported full year net revenues of $5.4 billion and AUM increased to $1.5 trillion.13
Net revenues	$12,896	$12,749		$54,143	$53,668
Provision for credit losses	$3	$87		$532	$280
Compensation expense	$5,951	$5,615		$24,558	$23,053
Non-compensation expenses	$4,846	$4,253		$ 17,240	$16,246
Pre-tax income7	$2,096	$2,794		$11,813	$14,089
Net income app. to MS	$1,517	$2,236		$9,087	$11,029
Expense efficiency ratio9	84%	77%		77%	73%
Earnings per diluted share1	$0.85	$1.26		$5.18	$6.15
Book value per share	$55.50	$54.55		$ 55.50	$54.55
Tangible book value per share	$40.89	$40.06		$ 40.89	$40.06
Return on equity	6.2%	9.2%		9.4%	11.2%
Return on tangible equity5	8.4%	12.6%		12.8%	15.3%
Institutional Securities
Net revenues	$4,940	$4,800		$23,060	$24,393
Investment Banking	$1,318	$1,252		$4,578	$5,235
Equity	$2,202	$2,176		$9,986	$10,769
Fixed Income	$1,434	$1,418		$7,673	$9,022
Wealth Management
Net revenues	$6,645	$6,626		$26,268	$24,417
Fee-based client assets ($Bn)10	$1,983	$1,678		$1,983	$1,678
Fee-based asset flows ($Bn)11	$41.6	$20.4		$109.2	$162.8
Net new assets ($Bn)12	$47.5	$51.6		$282.3	$311.3
Loans ($Bn)	$146.5	$146.1		$146.5	$146.1
Investment Management
Net revenues	$1,464	$1,461		$5,370	$5,375
AUM ($Bn)13	$1,459	$1,305		$1,459	$1,305
Long-term net flows ($Bn)14	$(7.1)	$(6.0)		$(15.2)	$(25.8)

Fourth Quarter Results

Institutional Securities

Institutional Securities reported net revenues for the current quarter of $4.9 billion compared with $4.8 billion a year ago. Pre-tax income was $408 million compared with $748 million a year ago.⁷

Investment Banking revenues up 5% from a year ago: Advisory revenues were essentially unchanged from a year ago reflecting completed M&A activity in the current quarter. Equity underwriting revenues were essentially unchanged from a year ago. Fixed income underwriting revenues increased 25% from a year ago on higher investment grade issuances.   Equity net revenues: Equity net revenues were essentially unchanged from a year ago. The absence of markdowns on certain strategic investments versus a year ago were offset by increased funding and liquidity costs.   Fixed Income net revenues: Fixed Income net revenues were essentially unchanged versus a year ago reflecting higher revenues in commodities driven by improved market conditions and increased client activity partially offset by lower results in credit products.   Other: Other revenues for the quarter reflect mark-to-market losses on corporate loans, inclusive of loan hedges, of $405 million. These losses were partially offset by net interest income and fees on corporate loans of $248 million, mark-to-market gains on DCP and revenues from our Japanese securities joint venture.   Total Expenses: Compensation expense increased from a year ago reflecting higher discretionary compensation, partially offset by lower expenses related to outstanding deferred equity compensation and significantly lower severance costs due to an employee action a year ago. Non-compensation expenses increased from a year ago primarily driven by higher legal expenses including a specific matter of $249 million and an FDIC special assessment of $121 million.15		($ millions)	4Q 2023	4Q 2022
		Net Revenues	$4,940	$4,800
		Investment Banking	$1,318	$1,252
		Advisory	$702	$711
		Equity underwriting	$225	$227
		Fixed income underwriting	$391	$314
		Equity	$2,202	$2,176
		Fixed Income	$1,434	$1,418
		Other	$(14)	$(46)
		Provision for credit losses	$22	$61
		Total Expenses	$4,510	$3,991
		Compensation	$1,732	$1,644
		Non-compensation	$2,778	$2,347

Wealth Management

Wealth Management net revenues of $6.6 billion in the current quarter were essentially unchanged from a year ago. Pre-tax income of $1.4 billion⁷ in the current quarter resulted in a pre-tax margin of 21.5%.⁸

Net revenues: Asset management revenues increased from a year ago reflecting higher asset levels and the impact of positive fee-based flows. Transactional revenues were essentially unchanged excluding the impact of mark-to-market on investments associated with DCP.6,16 Net interest income decreased from a year ago driven by changes in deposit mix, partially offset by higher interest rates.   Total Expenses: Compensation expense increased from a year ago driven by higher compensable revenues and higher expenses related to DCP.6 Non-compensation expenses increased from a year ago primarily driven by an FDIC special assessment of $165 million, partially offset by lower marketing and business development costs.15		($ millions)	4Q 2023	4Q 2022
		Net Revenues	$6,645	$6,626
		Asset management	$3,556	$3,347
		Transactional	$1,088	$931
		Net interest	$1,852	$2,138
		Other	$149	$210
		Provision for credit losses	$(19)	$26
		Total Expenses	$5,236	$4,760
		Compensation	$3,640	$3,343
		Non-compensation	$1,596	$1,417

Investment Management

Investment Management net revenues of $1.5 billion were essentially unchanged from a year ago. Pre-tax income was $265 million compared with $214 million a year ago.⁷

Net revenues: Asset management and related fees increased from a year ago on higher average AUM driven by increased asset values. Performance-based income and other revenues decreased from a year ago primarily due to lower accrued carried interest in our private funds partially offset by mark-to-market gains on public investments compared to losses a year ago.   Total Expenses: Compensation expense decreased from a year ago, primarily driven by lower compensation associated with carried interest.		($ millions)	4Q 2023	4Q 2022
		Net Revenues	$1,464	$1,461
		Asset management and related fees	$1,403	$1,371
		Performance-based income and other	$61	$90
		Total Expenses	$1,199	$1,247
		Compensation	$579	$628
		Non-compensation	$620	$619

Full Year Results

Institutional Securities

Institutional Securities reported net revenues of $23.1 billion compared with $24.4 billion a year ago. Pre-tax income was $4.5 billion compared with $6.7 billion a year ago.⁷

Investment Banking revenues down 13%: Advisory revenues decreased driven by fewer completed M&A transactions on lower market volumes. Equity underwriting revenues were essentially unchanged. Higher secondary and convertible offerings were offset by lower IPOs. Fixed income underwriting revenues were essentially unchanged from a year ago as higher investment grade issuances were offset by lower non-investment grade issuances.   Equity net revenues down 7%: Equity net revenues decreased across businesses primarily on lower client activity and increased funding and liquidity costs compared to a year ago.   Fixed Income net revenues down 15%: Fixed Income net revenues decreased from a strong prior year, primarily driven by declines in foreign exchange and commodities on less favorable market conditions and lower client activity.   Other: Other revenues for the year reflect net interest income and fees on corporate loans of $1 billion and revenues from our Japanese securities joint venture, partially offset by mark-to-market losses on corporate loans, inclusive of loan hedges, of $577 million.   Provision for credit losses: Provision for credit losses increased from a year ago primarily driven by deteriorating conditions in the commercial real estate sector, including provisions for certain specific commercial real estate loans.   Total Expenses: Compensation expense was essentially unchanged from a year ago as higher expenses related to DCP and stock-based compensation plans were offset by lower expenses related to outstanding deferred equity compensation. 6 Non-compensation expenses increased from a year ago on investments in technology, an FDIC special assessment of $121 million, and higher legal costs inclusive of $249 million related to a specific matter. 15		($ millions)	FY 2023	FY 2022
		Net Revenues	$23,060	$24,393
		Investment Banking	$4,578	$5,235
		Advisory	$2,244	$2,946
		Equity underwriting	$889	$851
		Fixed income underwriting	$1,445	$1,438
		Equity	$9,986	$10,769
		Fixed Income	$7,673	$9,022
		Other	$823	$(633)
		Provision for credit losses	$401	$211
		Total Expenses	$18,183	$17,467
		Compensation	$8,369	$8,246
		Non-compensation	$9,814	$9,221

Wealth Management

Wealth Management reported net revenues of $26.3 billion compared with $24.4 billion a year ago. Pre-tax income of $6.5 billion⁷ in the current year resulted in a pre-tax margin of 24.9%.⁸

Net revenues up 8%: Asset management revenues increased from a year ago on positive fee-based flows, partially offset by a reduction driven by lower average asset levels due to declines in the markets and changes in the mix of existing client portfolios. Transactional revenues were essentially unchanged excluding the impact of mark-to-market gains of $282 million in the current year versus mark-to-market losses of $858 million a year ago on investments associated with DCP. 6,16 Net interest income increased from a year ago on higher interest rates, partially offset by changes in deposit mix.   Provision for Credit Losses: Provision for credit losses increased from a year ago primarily driven by deteriorating conditions in the commercial real estate sector, including provisions for specific commercial real estate loans.   Total Expenses: Compensation expense increased driven by higher expenses related to DCP versus a year ago.6 Non-compensation expenses increased primarily driven by an FDIC special assessment of $165 million and higher technology expenses and costs related to exits of real estate.15		($ millions)	FY 2023	FY 2022
		Net Revenues	$26,268	$24,417
		Asset management	$14,019	$13,872
		Transactional	$3,556	$2,473
		Net interest	$8,118	$7,429
		Other	$575	$643
		Provision for credit losses	$131	$69
		Total Expenses	$19,607	$17,765
		Compensation	$13,972	$12,534
		Non-compensation	$5,635	$5,231

Investment Management

Investment Management net revenues of $5.4 billion were essentially unchanged from a year ago. Pre-tax income was $842 million compared with $807 million a year ago.⁷

Net revenues: Asset management and related fees decreased due to a shift in the mix of average AUM, driven by the cumulative effect of net flows. 13 Performance-based income and other revenues increased from a year ago on mark-to-market gains compared to losses a year ago on investments associated with DCP and on public investments, partially offset by lower accrued carried interest in our private funds. 6   Total Expenses: Compensation expense decreased from a year ago driven by lower compensation associated with carried interest, partially offset by gains related to DCP compared with losses a year ago. 6		($ millions)	FY 2023	FY 2022
		Net Revenues	$5,370	$5,375
		Asset management and related fees	$5,231	$5,332
		Performance-based income and other	$139	$43
		Total Expenses	$4,528	$4,568
		Compensation	$2,217	$2,273
		Non-compensation	$2,311	$2,295

Other Matters

The Firm repurchased $1.3 billion of its outstanding common stock during the quarter, and $5.3 billion during the year as part of its Share Repurchase Program. The Board of Directors declared a $0.85 quarterly dividend per share, payable on February 15, 2024 to common shareholders of record on January 31, 2024. The effective tax rate for the current quarter was 26.5% and for the full year was 21.9%. The higher current quarter rate primarily reflects the non-deductibility of a specific legal matter.		4Q 2023		4Q 2022	FY 2023	FY 2022
		Common Stock Repurchases
		Repurchases ($MM)	$1,300	$1,700	$5,300	$9,865
		Number of Shares (MM)	17	20	62	113
		Average Price	$75.23	$86.07	$85.35	$87.25
		Period End Shares (MM)	1,627	1,675	1,627	1,675
		Tax Rate	26.5%	18.9%	21.9%	20.7%
		Capital17
		Standardized Approach
		CET1 capital18	15.2%	15.3%
		Tier 1 capital18	17.1%	17.2%
		Advanced Approach
		CET1 capital18	15.4%	15.6%
		Tier 1 capital18	17.4%	17.6%
		Leveraged-based capital
		Tier 1 leverage19	6.7%	6.7%
		SLR20	5.5%	5.5%

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 42 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, including information provided on the Firm’s earnings conference calls, may include certain non-GAAP financial measures. The definition of such measures or reconciliation of such measures 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. For a discussion of risks and uncertainties that may affect the future results of the Firm, please see “Forward-Looking Statements” 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, 2022 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 2023 and 2022 of approximately $134 million and $123 million, respectively. Includes preferred dividends related to the calculation of earnings per share for the years ended 2023 and 2022 of approximately $557 million and $489 million, respectively.

² The Firm recorded a one-time FDIC Special Assessment of $286 million pre-tax ($218 million post-tax) and a legal charge related to a specific matter of $249 million pre-tax ($234 million post-tax) which negatively impacted earnings per diluted shares by $0.28.

³ 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 position, 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 capital adequacy. 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.

⁴ Our earnings releases, earnings conference calls, financial presentations and other communications may also include certain metrics which we believe to be useful to us, analysts, investors, and other stakeholders by providing further transparency about, or an additional means of assessing, our financial condition and operating results.

⁵ Return on average tangible common equity is a non-GAAP financial measure that the Firm considers useful for analysts, investors and other stakeholders to allow comparability of period-to-period operating performance and capital adequacy. The calculation of return on average tangible common equity represents full year or annualized net income applicable to Morgan Stanley less preferred dividends as a percentage of average tangible common equity. 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 “DCP” refers to certain employee deferred cash-based compensation programs. Please refer to "Management’s Discussion and Analysis of Financial Condition and Results of Operations – Other Matters – Deferred Cash-Based Compensation” in the Firm’s Annual Report on Form 10-K for the year ended December 31, 2022.

⁷ Pre-tax income represents income before provision for income taxes.

⁸ Pre-tax margin represents income before provision for income taxes divided by net revenues.

⁹ The expense efficiency ratio represents total non-interest expenses as a percentage of net revenues.

¹⁰ 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.

¹¹ Wealth Management fee-based asset flows include net new fee-based assets (including asset acquisitions), net account transfers, dividends, interest, and client fees, and exclude institutional cash management related activity.

¹² Wealth Management net new assets represent client inflows, including dividends and interest, and asset acquisitions, less client outflows, and exclude activity from business combinations/divestitures and the impact of fees and commissions.

¹³ AUM is defined as assets under management or supervision.

¹⁴ Long-term net flows include the Equity, Fixed Income and Alternative and Solutions asset classes and excludes the Liquidity and Overlay Services asset class.

¹⁵ Following the failures of certain banks and resulting losses to the FDIC’s Deposit Insurance Fund in the first half of 2023, the FDIC adopted a final rule on November, 16 2023 to implement a special assessment to recover the cost associated with protecting uninsured depositors. We recorded the cost of the entire special assessment of $286 million in the fourth quarter of 2023. Of the $286 million, $121 million was recorded in the Institutional Securities segment and $165 million was recorded in the Wealth Management segment.

¹⁶ Transactional revenues include investment banking, trading, and commissions and fee revenues.

¹⁷ Capital ratios are estimates as of the press release date, January 16, 2024.

¹⁸ CET1 capital is defined as Common Equity Tier 1 capital. The Firm’s risk-based capital ratios are computed under each of 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”). For information on the calculation of regulatory capital and ratios, and associated regulatory requirements, please refer to "Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources – Regulatory Requirements" in the Firm’s Annual Report on Form 10-K for the year ended December 31, 2022.

¹⁹ The Tier 1 leverage ratio is a leverage-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.

²⁰ The Firm’s supplementary leverage ratio (SLR) utilizes a Tier 1 capital numerator of approximately $78.2 billion and $77.2 billion, and supplementary leverage exposure denominator of approximately $1.43 trillion and $1.40 trillion, for the fourth quarter of 2023 and 2022, respectively.

Morgan Stanley
Consolidated Income Statement Information
(unaudited, dollars in millions)
			Quarter Ended										Percentage Change From:						Twelve Months Ended						Percentage
			Dec 31, 2023				Sep 30, 2023			Dec 31, 2022			Sep 30, 2023			Dec 31, 2022			Dec 31, 2023			Dec 31, 2022			Change
Revenues:
Investment banking			$	1,415			$	1,048		$	1,318		35	%		7	%		$	4,948		$	5,599		(12	%)
Trading				3,305				3,679			3,017		(10	%)		10	%			15,263			13,928		10	%
Investments				189				144			85		31	%		122	%			573			15		*
Commissions and fees				1,110				1,098			1,169		1	%		(5	%)			4,537			4,938		(8	%)
Asset management				5,041				5,031			4,803		--			5	%			19,617			19,578		--
Other				(61	)			296			38		*			*				975			283		*
Total non-interest revenues				10,999				11,296			10,430		(3	%)		5	%			45,913			44,341		4	%
Interest income				14,058				13,305			9,232		6	%		52	%			50,281			21,595		133	%
Interest expense				12,161				11,328			6,913		7	%		76	%			42,051			12,268		*
Net interest				1,897				1,977			2,319		(4	%)		(18	%)			8,230			9,327		(12	%)
Net revenues				12,896				13,273			12,749		(3	%)		1	%			54,143			53,668		1	%
Provision for credit losses				3				134			87		(98	%)		(97	%)			532			280		90	%
Non-interest expenses:
Compensation and benefits				5,951				5,935			5,615		--			6	%			24,558			23,053		7	%
Non-compensation expenses:
Brokerage, clearing and exchange fees				865				855			851		1	%		2	%			3,476			3,458		1	%
Information processing and communications				987				947			933		4	%		6	%			3,775			3,493		8	%
Professional services				822				759			853		8	%		(4	%)			3,058			3,070		--
Occupancy and equipment				528				456			443		16	%		19	%			1,895			1,729		10	%
Marketing and business development				224				191			295		17	%		(24	%)			898			905		(1	%)
Other				1,420				851			878		67	%		62	%			4,138			3,591		15	%
Total non-compensation expenses				4,846				4,059			4,253		19	%		14	%			17,240			16,246		6	%
Total non-interest expenses				10,797				9,994			9,868		8	%		9	%			41,798			39,299		6	%
Income before provision for income taxes				2,096				3,145			2,794		(33	%)		(25	%)			11,813			14,089		(16	%)
Provision for income taxes				555				710			528		(22	%)		5	%			2,583			2,910		(11	%)
Net income			$	1,541			$	2,435		$	2,266		(37	%)		(32	%)		$	9,230		$	11,179		(17	%)
Net income applicable to nonredeemable noncontrolling interests				24				27			30		(11	%)		(20	%)			143			150		(5	%)
Net income applicable to Morgan Stanley				1,517				2,408			2,236		(37	%)		(32	%)			9,087			11,029		(18	%)
Preferred stock dividend				134				146			123		(8	%)		9	%			557			489		14	%
Earnings applicable to Morgan Stanley common shareholders			$	1,383			$	2,262		$	2,113		(39	%)		(35	%)		$	8,530		$	10,540		(19	%)
Notes:
-	Firm net revenues excluding mark-to-market gains and losses on deferred cash-based compensation plans (DCP) were: 4Q23: $12,527 million, 3Q23: $13,475 million, 4Q22: $12,555 million, 4Q23 YTD: $53,709 million, 4Q22 YTD: $54,866 million.
-	Firm compensation expenses excluding DCP were: 4Q23: $5,597 million, 3Q23: $5,992 million, 4Q22: $5,426 million, 4Q23 YTD: $23,890 million, 4Q22 YTD: $23,769 million.
-	The End Notes are an integral part of this presentation. Refer to pages 12 - 17 of the Financial Supplement for Definition of U.S. GAAP to Non-GAAP Measures, Definition of Performance Metrics and Terms, Supplemental Quantitative Details and Calculations, and Legal Notice.

Morgan Stanley
Consolidated Financial Metrics, Ratios and Statistical Data
(unaudited)
	Quarter Ended												Percentage Change From:						Twelve Months Ended								Percentage
	Dec 31, 2023				Sep 30, 2023				Dec 31, 2022				Sep 30, 2023			Dec 31, 2022			Dec 31, 2023				Dec 31, 2022				Change
Financial Metrics:
Earnings per basic share	$	0.86			$	1.39			$	1.28			(38	%)		(33	%)		$	5.24			$	6.23			(16	%)
Earnings per diluted share	$	0.85			$	1.38			$	1.26			(38	%)		(33	%)		$	5.18			$	6.15			(16	%)
Return on average common equity		6.2	%			10.0	%			9.2	%									9.4	%			11.2	%
Return on average tangible common equity		8.4	%			13.5	%			12.6	%									12.8	%			15.3	%
Book value per common share	$	55.50			$	55.08			$	54.55									$	55.50			$	54.55
Tangible book value per common share	$	40.89			$	40.53			$	40.06									$	40.89			$	40.06
Financial Ratios:
Pre-tax profit margin		16	%			24	%			22	%									22	%			26	%
Compensation and benefits as a % of net revenues		46	%			45	%			44	%									45	%			43	%
Non-compensation expenses as a % of net revenues		38	%			31	%			33	%									32	%			30	%
Firm expense efficiency ratio		84	%			75	%			77	%									77	%			73	%
Effective tax rate		26.5	%			22.6	%			18.9	%									21.9	%			20.7	%
Statistical Data:
Period end common shares outstanding (millions)		1,627				1,642				1,675			(1	%)		(3	%)
Average common shares outstanding (millions)
Basic		1,606				1,624				1,652			(1	%)		(3	%)			1,628				1,691			(4	%)
Diluted		1,627				1,643				1,679			(1	%)		(3	%)			1,646				1,713			(4	%)
Worldwide employees		80,006				80,710				82,427			(1	%)		(3	%)
The End Notes are an integral part of this presentation. Refer to pages 12 - 17 of the Financial Supplement for Definition of U.S. GAAP to Non-GAAP Measures, Definition of Performance Metrics and Terms, Supplemental Quantitative Details and Calculations, and Legal Notice.

 

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Source: Morgan Stanley

FAQ

What were Morgan Stanley's net revenues for Q4 2023?

Morgan Stanley reported net revenues of $12.9 billion for Q4 2023.

What was Morgan Stanley's EPS for Q4 2023?

Morgan Stanley's EPS for Q4 2023 was $0.85.

What were Morgan Stanley's full year net revenues for 2023?

Morgan Stanley's full year net revenues were $54.1 billion.

What was Morgan Stanley's full year EPS for 2023?

Morgan Stanley's full year EPS for 2023 was $5.18.

What was Morgan Stanley's ROTCE for the full year?

Morgan Stanley delivered full year ROTCE of 12.8%.