Assets, Revenues Rise At Morgan Stanley's Wealth Arm

Tom Burroughes

19 July 2019

, which is reportedly keen to ramp up wealth business in Asia, yesterday reported second-quarter 2019 pre-tax income of $1.2 billion at its wealth arm, producing 28.2 per cent pre-tax margin. Revenues rose at this part of the US firm’s business.

Net revenues at the wealth management arm stood at $4.4 billion in Q2, against £4.3 billion in the same quarter of last year. Rising asset levels – as markets gained ground – boosted asset management revenues.

Net interest income fell by 3 per cent compared with a year ago, primarily driven by an increase in mortgage securities prepayment amortization expense and the higher cost of funds, partially offset by the impact of growth in bank lending.

Wealth Management client liabilities were $84 billion at quarter end compared with $82 billion a year ago.

There were $9.8 billion of fee-based asset flows in the second quarter, decelerating form $15.3 billion a year earlier, Morgan Stanley said. Total assets were $1.159 trillion, against $1.084 trillion a year before. Within its investment management segment, total assets under management stood at $497 billion, up from $474 billion.

Among recent stories, the firm has reportedly talked about its desire to expand significantly in the Asia-Pacific region's wealth management market.

Group results
Across its entire business lines, Morgan Stanley reported net revenues of $10.2 billion compared with $10.6 billion a year ago.

Second-quarter earnings were $2.2 billion, or $1.23 a share, exceeding the $1.14 estimate of analysts surveyed by Refinitiv (source: CNBC).

“We reported solid quarterly results across all our businesses. Firm-wide revenues were over $10 billion and we produced an ROE within our target range, demonstrating the stability of our franchise. We remain focused on serving our clients and pursuing growth opportunities while diligently managing expenses,” James Gorman, chairman and chief executive, said.