Morgan Stanley
Summary
Brief Company Overview
Morgan Stanley (NYSE:MS) is a global financial services firm established in 1935 in the US by J.P. Morgan & Co. partners as a response to the Glass-Steagall Act, which required the splitting of American commercial and investment banking businesses. The firm advises, originates, trades, manages and distributes capital for governments, institutions and individuals. The company was originally incorporated as a Delaware corporation in 1981 and the predecessors of the company can be traced back to 1924.1 During the first year of its operation, Morgan Stanley grabs 24% of market share in underwriting business by handling $1.1 billion in public offerings and private placements.
Morgan Stanley currently employs more than 75,000 employees around the globe in offices in 41 countries as of December 31, 2021. The company has its presence in the Americas, Asia-Pacific, Europe, Middle East & Africa, and Japan. The company has three reportable business segments - Institutional Securities, Wealth Management, and Investment Management.
James Patrick Gorman is the Chairman & CEO of Morgan Stanley. The company has released its 2022 financial results reporting $53.7 billion in revenue, earnings per share (EPS) $6.15 and return on total capital employed 15.3%.
Financial Highlights
Q4'22 Highlights
Morgan Stanley has reported net revenues of $12.7 billion for the fourth quarter ended December 31, 2022 compared with $14.5 billion a year ago. Net income applicable to Morgan Stanley was $2.2 billion, or $1.26 per diluted share, compared with $3.7 billion, or $2.01 per diluted share, for the same period a year ago. The fourth quarter of 2022 was impacted by severance costs of $133 million associated with a December employee action, partially offset by a net discrete tax benefit of $89 million.
In the institutional Securities segment, the company has reported net revenue of $4.8 billion in the fourth quarter of 2022, down from $6.7 billion a year earlier. Pre-tax income was $748 million compared with $3.0 billion a year ago. Investment banking revenues, under this segment, has went down by 49% Quarter-to-Quarter in the past year; equity net revenues down by 24%; and fixed income net revenues up by 15%.
In the Wealth Management segment, the company reported net revenues for the current quarter of $6.6 billion compared with $6.3 billion a year ago. Pre-tax income of $1.8 billion. The revenue in this segment is up by 6%.
In the Investment Management segment, the company reported net revenues of $1.5 billion compared with $1.8 billion a year ago, down by 17% quarter-to-quarter. Pre-tax income was $214 million compared with $508 million a year ago.
Annual Performance Highlights
For the year ended December 31, 2022, Morgan Stanley has reported full year net revenues of $53.7 billion and net income of $11.0 billion compared to $51.71 billion in net revenue and $15.12 billion in net revenue a year earlier.
Institutional Securities reported full year net revenues of $24.4 billion reflecting lower activity in Investment Banking driven by the uncertain macroeconomic environment, partially offset by strong performance in Fixed Income.
Wealth Management delivered record full year net revenues of $24.4 billion and a pre-tax margin of 27.0% or 28.4% excluding integration-related expenses.6,7 The business added net new assets of $311 billion, representing a full year 6% annualized growth rate from beginning period assets.
Investment Management reported full year net revenues of $5.4 billion and AUM of $1.3 trillion in a challenging market environment.
