Morgan Stanley, the New York-listed banking group which recently agreed to spin off part of its non-domestic wealth management business to Credit Suisse, said its global wealth arm logged pre-tax income from continuing operations of $597 million in the first quarter of 2013, up from $403 million a year ago.

The quarter's pre-tax margin was 17 per cent; net revenues for the quarter were $3.5 billion compared with $3.3 billion a year ago. Income after the non-controlling interest allocation to Citigroup and before taxes was $476 million. (This point refers to Morgan Stanley’s wealth management joint venture with Citigroup. Reports have said the firm may buy 100 per cent of this JV from Citi.)

As reported in late March, Morgan Stanley sold its Europe, Middle East and Africa private wealth management business in the UK, United Arab Emirates and Italy to Credit Suisse. The financial size of the transaction, expected to be completed in the third quarter of this year, was not disclosed by Morgan Stanley. Credit Suisse said the acquired business had a total of $13 billion of assets.

Among other details in today’s Q1 results, Morgan Stanley said asset management fee revenues of $1.9 billion increased 8 per cent from last year's first quarter primarily reflecting an increase in fee based assets and positive flows.

Transactional revenues of $1.1 billion were essentially unchanged from a year ago primarily reflecting higher investment banking revenues, offset by a decrease in trading revenues driven by lower gains from investments associated with the firm's deferred compensation and co-investment plans.

Compensation expense for the current quarter was $2.1 billion compared with $2.0 billion a year ago on higher revenues. Non-compensation expenses of $808 million decreased from $879 million a year ago partly driven by the absence of platform integration costs.

Total client assets were $1.8 trillion at quarter end. Client assets in fee based accounts were $621 billion, or 35 per cent of total client assets. Fee based asset flows for the quarter stood at $15.3 billion.

There were 16,284 wealth management representatives for the quarter, essentially unchanged from 16,352 as of 31 December last year. Average annualised revenue per representative of $851,000 and total client assets per representative of $110 million increased 9 per cent and 10 per cent, respectively, compared with the prior year quarter.

The group

Across the firm as a whole, Morgan Stanley reported net revenues of $8.2 billion for the first quarter compared with $6.9 billion a year ago.

Results for Q1 included negative revenue related to changes in Morgan Stanley's debt-related credit spreads and other credit factors of $317 million, compared with negative revenue of $2.0 billion a year ago, the firm said.