dChan
Anonymous ID: 0499fc Oct. 18, 2023, 6:20 a.m. No.19756068   🗄️.is 🔗kun   >>6140 >>6165 >>6170

Morgan Stanley Slides After I-Banking/Wealth Mgmnt Disappoints, Credit Loss Provisions Rise

 

(marketFag comments)

Morgan Stanley reported Q3 earnings of $1.38 per share on net revenue of $13.3 bn (better than the $1.22 and $13.2 bn that were expected).

However, while the numbers beat on the top and bottom lines, wealth management revenue disappointed at $6.40 bn versus $6.58 bn expected, investment banking was hurting, but trading beat on all fronts.

  • Wealth management net revenue $6.40 billion, estimate $6.58 billion

  • Equities sales & trading revenue $2.51 billion, estimate $2.41 billion

  • FICC sales & trading revenue $1.95 billion, estimate $1.83 billion

  • Institutional Investment Banking revenue $938 million, estimate $1.04 billion

  • Advisory revenue $449 million, estimate $424.9 million

  • Equity underwriting rev. $237 million, estimate $239.1 million

  • Fixed Income Underwriting revenue $252 million, estimate $373.4 million

 

For context on the trading side, Morgan Stanley's $2.51 billion of revenue compares with $2.96 billion at Goldman and $2.07 billion at JPMorgan.

CEO James Gorman says in the release:

“While the market environment remained mixed this quarter, the Firm delivered solid results with an ROTCE of 13.5%. Our Equity and Fixed Income businesses navigated markets well, and both Wealth and Investment Management produced higher revenues and profits year-over-year.”

Despite the disappointment, there was plenty of spin:

“This is solid performance in a mixed environment,” Morgan Stanley Chief Financial Officer Sharon Yeshaya said in an interview.

“Our announcements in terms of M&A this quarter were up 50% on year-over-year basis. We see backlog continuing to grow.”

But investors were not buying it as MS shares are down around 3% in the pre-market.

 

(Another tub o shit delivered from Moran Stanley as loan loss provisions grow…net income missed as well-see below)

 

And sure enough, despite the soaring rates and curves, Morgan Stanley's net interest income was $1.98 bn, notably below the $2.06 bn expected.

Finally, Morgan Stanley upped its credit loss provisions to $134 million (higher than the $126 million expected) pointing to “deteriorating conditions in the commercial real estate sector” as one reason for the increase.

 

https://www.zerohedge.com/markets/morgan-stanley-slides-after-i-bankingwealth-mgmnt-disappoints-credit-loss-provisions-rise

 

(No shit sherlock on that last sentence but the system has kept REIT values propped because everyone know where CRE vacancy rates are yet the values of REITS still in fantasy land. That is a direct result of mark to model and not mark to mark. They get a pass on just about every asset they own so not limited to CRE and they did the same thing starting in 2006. Incidentally Moran Stanley was probably the worst one back in the 08 bailouts and they got Arab munee early on and screwed them. The ‘deal’ was “you can invest in us and have your share price mark before or after we announce an almost $2b loss”. Naturally they chose after and the complicit markets makers and institutions-who were in on it as well-pumped the equity higher after announcing that loss by an additional 10%. This is why the US banking system isn’t out asking for additional capital cuz they aren’t gonna get it pulling shit like that).

 

Equity buybacks since 2013 equates to $53b cap 3 while overall Moran Stanley has a market cap or net worth of $133.10 billion as of October 18, 2023. Its market cap has decreased by -1.12% in one year. (Bought 39% of its market cap in equity over last 10 years so yet another reason why extend and pretend or moral hazard in SOP)

 

https://stockbuybackshistory.com/ms/