Reports

Strong Wealth Management Results Boost Morgan Stanley's Performance

Tom Burroughes Group Editor London 21 January 2013

Strong Wealth Management Results Boost Morgan Stanley's Performance

Morgan Stanley said its global wealth management group reported pre-tax income from continuing operations of $581 million in the fourth quarter of 2012, more than double the figure of $238 million in the fourth quarter of 2011.

The quarter's pre-tax margin was 17 per cent, the US-listed firm reported late last Friday. Net revenues for the current quarter were $3.5 billion compared with $3.2 billion a year ago. Income after the non-controlling interest allocation to Citigroup and before taxes was $474 million.

Asset management fee revenues of $1.9 billion increased 16 per cent on a year ago, primarily reflecting an increase in fee-based assets and positive flows, Morgan Stanley said.

Transactional revenues of $1.1 billion decreased 3 per cent from a year before, reflecting reduced commissions and fees and a decrease in principal trading revenues driven by lower gains from investments associated with the firm's deferred compensation and co-investment plans, offset by higher investment banking revenues.

Total client assets were $1.8 trillion at the end of last year. Client assets in fee-based accounts were $573 billion, or 32 per cent of total client assets. Global fee-based asset flows for the fourth quarter were $3.7 billion.

There were 16,780 representative staff at the firm at the end of the quarter, relatively unchanged from the previous three months. The average annualised revenue per global representative was $824,000 and total client assets per global representative of $106 million increased 13 per cent and 14 per cent, respectively on the same three months of 2011.

For the firm as a whole, Morgan Stanley reported net revenues of $7.0 billion for the fourth quarter compared with $5.7 billion a year ago. Income from continuing operations was $573 million, or $0.28 per diluted share, compared with a loss of $222 million, for the same period a year ago. (The prior year fourth quarter included a pre-tax loss of approximately $1.7 billion, or a loss of $0.58 per diluted share, related to the comprehensive settlement with MBIA Insurance Corporation.)

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