Morgan Stanley Beat Q1 Earnings Expectations, Raises Provision For Credit Losses Due To macro Outlook - Morgan Stanley (NYSE:MS)

Morgan Stanley MS reported Q1 net revenues of $14.5 billion, down from $14.8 billion a year ago, exceeding the consensus of $13.9 billion.
Institutional Securities net revenues declined to $6.8 billion from $7.7 billion in Q1 2022, owing to a decline in Investment Banking (-24% Y/Y), Equity (-14% Y/Y), and Fixed Income (-12% Y/Y) revenues.
Wealth Management business net revenue rose to $6.6 billion from $5.9 billion a year ago, led by mark-to-market gains on investments related to certain employees’ deferred compensation plans. The business attracted solid new assets of $110 billion in Q1.
The expense efficiency ratio increased to 72% from 69% in the year-ago quarter, with integration-related expenses of $77 million.
Net income declined to $3.0 billion from $3.7 billion a year ago, with EPS of $1.70 beating the consensus of $1.62.
Provision for credit losses increased significantly to $234 million from $57 million a year ago, reflecting a deterioration in the macroeconomic outlook from last year.
Common Equity Tier 1 capital ratio stood at 15.1% compared to 14.5% a year ago.
Assets Under Management (AUM) stood at $1.4 billion, reflecting a decline in asset value from a year ago.
MS repurchased shares of $1.5 billion and declared a quarterly dividend of $0.775 in Q1 2023.
“The Firm delivered strong results with a ROTCE of 17% in a very unusual environment, demonstrating the strength of our business model. The investments we have made in our Wealth Management business continue to bear fruit as we added a robust $110 billion in net new assets this quarter. Equity and Fixed Income revenues were strong, although Investment Banking activity continued to be constrained,” stated James P. Gorman, Chairman and CEO.
Price Action: MS shares are trading lower by 3.44% at $86.76 premarket on the last check Wednesday.
Photo via Wikimedia Commons

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