Morgan Stanley (MS) Q3 2024 earnings summary

Executive summary

• Net revenues for Q3 2024 were $15.4 billion, up 16% year-over-year, with net income of $3.2 billion and EPS of $1.88, reflecting strong performance and growth across all business segments.

• Return on tangible common equity (ROTCE) was 17.5% for Q3 and 18.2% year-to-date; return on equity (ROE) was 13.1% for Q3 and 13.5% year-to-date.

• Total client assets surpassed $7.6 trillion, with $200 billion in organic growth in the first nine months and nearly $1.4 trillion increase over the past year.

• Strategic investments, global integration, and robust client engagement drove share gains in institutional businesses and record results in Wealth and Investment Management.

• Expense efficiency ratio held at 72% for both Q3 and year-to-date, reflecting disciplined expense management.

Financial highlights

• Q3 2024 net revenues rose to $15.4 billion from $13.3 billion in Q3 2023; net income increased to $3.2 billion from $2.4 billion.

• Q3 2024 diluted EPS was $1.88, a 36% increase year-over-year; YTD diluted EPS was $5.73, up 32%.

• Wealth Management posted record revenue of $7.3 billion and pre-tax profits of $2.1 billion, with a margin of 28.3%.

• Institutional Securities revenues were $6.8 billion, up 20% year-over-year, with investment banking revenues up 56% and equity revenues up 21%.

• Investment Management revenues rose 9% year-over-year to $1.5 billion, with total AUM at $1.6 trillion and positive long-term net flows of $7 billion.

Outlook and guidance

• Management remains focused on durable growth, disciplined expense management, and long-term shareholder returns, with ROTCE goal at 20% in a normal market environment.

• SCB will increase to 6.0% from October 1, 2024, raising the aggregate Standardized CET1 ratio requirement to 13.5%.

• Constructive outlook for Investment Banking, supported by improved underwriting markets and increased sponsor and corporate activity; IPO and M&A activity anticipated to recover.

• NII expected to be modestly down in Q4 due to lower rate expectations; asset management fee-based revenues expected to remain a durable growth driver.

• Management expects continued focus on capital strength and monitoring of macroeconomic and geopolitical risks.