Morgan Stanley has reported net revenues for the quarter ending 30 June down by 4 per cent or $517 million from a year ago, despite strong gains in its wealth and investment management divisions.
The global group’s net revenues for the second quarter came to $14.4 billion (US$10.2 billion), down from $15 billion. Its earnings per diluted share have come down to $1.23 for the quarter, falling from $1.30 the year before.
Contrary to the growth in other divisions, the company’s Institutional Securities segment saw its net revenues drop by 11 per cent to $7.2 billion.
Investment banking revenues dropped by 14 per cent to $2 billion for the quarter, reflecting decreased advisory revenues, Morgan Stanley noted, driven by lower market volumes.
Equities and sales net revenues also fell, decreasing by 14 per cent from the prior corresponding period (pcp). Fixed income sales and trading net revenues were reduced by 18 per cent.
Meanwhile, investments and other revenues were more than doubled from the prior year to $194 million from $89 million.
Wealth Management posted net revenues of $6.2 billion, up from $6.1 billion in the pcp. Asset management revenue stayed steady, up 1 per cent to $3.5 million.
Revenues in Morgan Stanley’s Investment Management grew by 21 per cent to $1.1 billion, reflecting increased assets under management (AUM), up by 4 per cent to $702.9 million. Morgan Stanley posted long-term net flows in the segment of $6.9 million, increasing by 40 per cent from the pcp.
The group cited higher investment gains and carried interest in Asia private equity for investment revenues more than quadrupling from $77.8 million to $349.4 million.
James Gorman, chairman and chief executive of Morgan Stanley, said the company remains focused on pursuing growth opportunities.
“We reported solid quarterly results across all our businesses,” Mr Gorman said.
“Firmwide revenues were over US$10 billion and we produced ROE within our target range, demonstrating the stability of our franchise.”
Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth.
Prior to joining the team in 2018, Sarah spent her career working in business-to-business media, including print and online, as well as cutting her teeth on current affairs programs for community radio.
Sarah has a dual bachelor's degree in science and journalism from the University of Queensland.
You can contact her on [email protected].
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