Wealth Management & Cost Cutting Measures Lead The Charge for Morgan Stanley In Q1

By John Heerdink LinkedIn

Market conditions have been weak for Morgan Stanley (MS) and other Wall Street Banks, due to slower investment banking related activities in the first quarter of 2019.

However, the 6th-largest US bank Morgan Stanley managed to beat wall street’s expectations as its wealth management (where it garners approximately half of its revenues) and cost-cutting measures helped lead the way in Q1. Investment Banking revenues were down 24% from a year ago.  Wealth Management delivered a pre-tax income of $1.2 billion and a pre-tax margin of 27.1% reflecting strong expense management while continuing to invest in the business”.

Morgan Stanley (NYSE: MS) also reported net revenues of $10.3 billion for the first quarter ended March 31, 2019, compared with $11.1 billion a year ago. Net income applicable to Morgan Stanley was $2.4 billion, or $1.39 per diluted share,1 compared with net income of $2.7 billion, or $1.45 per diluted share,1 for the same period a year ago. The current quarter included intermittent net discrete tax benefits of $101 million, or $0.06 per diluted share.

James P. Gorman, Chairman and Chief Executive Officer, said, “We delivered solid earnings despite a slow start to the year following the turbulent markets in the fourth quarter. With an ROE of 13.1% and ROTCE of 14.9%, our results demonstrated the stability and breadth of our global franchise. Even though risks to the global environment remain, markets have recovered and we are well positioned to serve our clients and invest in our businesses.”

Vista Partners LLC (”Vista”) is a California Registered Investment Advisor based in San Francisco. Vista delivers timely and relevant insights via the website: www.vistapglobal.com with daily stories, weekly market updates, monthly macroeconomic newsletters, podcasts, & Vista’s proprietary equity and market research to help you stay informed and stay competitive. Vista’s mission is to invest partner capital while arming investors with a comprehensive global financial perspective across all market sectors. Vista also seeks to provide select issuers with actionable advice regarding fundamental development, corporate governance, and capital market directives.

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Morgan Stanley leans on wealth management to beat estimates

Morgan Stanley gets about half its annual revenue from wealth management, which helps it ride out weak periods for trading and investment banking. “This quarter … shows the resiliency of wealth management, which is an important indicator of the health of our business,” Chief Financial Officer..

finance.yahoo.com

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