Financial services giant Morgan Stanley (MS) announced on Tuesday a 44% rise in net profit for the second quarter compared to the previous year, fueled by revenue growth across all operating segments and a significant decrease in provisions for credit losses. The company’s earnings per share and quarterly revenues surpassed analysts' expectations, and it increased its quarterly dividend.
"The firm delivered another strong quarter in an improving capital markets environment, with first half 2024 revenues reaching $30.2 billion, earnings per share (EPS) of $3.85, and a return on tangible common equity (ROTCE) of 18.6%. We expanded our total client assets to $7.2 trillion as we work towards surpassing $10 trillion," stated CEO Ted Pick.
For the second quarter, net income attributable to Morgan Stanley's common shareholders jumped 44% to $2.94 billion, or $1.82 per share, up from $2.05 billion, or $1.24 per share, in the same period last year.
An average of 16 analysts surveyed by Thomson Reuters had projected earnings of $1.65 per share for the quarter, excluding special items.
Net revenues for the quarter saw a 12% increase to $15.02 billion, up from $13.46 billion in the corresponding quarter last year. Analysts had anticipated revenues of $14.30 billion.
Net interest income rose by 3% to $2.07 billion, while non-interest income grew by 13% to $12.95 billion from last year. Total non-interest expenses went up by 4% to $10.87 billion.
The firm's provision for credit losses was $76 million, compared to $161 million in the year-ago quarter.
Institutional Securities net revenues climbed to $6.98 billion from $5.65 billion, driven by broad franchise performance, especially in Equity with increased client activity, and Investment Banking with strong debt underwriting results. Wealth Management net revenues edged up 2% to $6.80 billion from $6.66 billion last year, reflecting record asset management revenues from cumulative fee-based asset flows and a favorable market environment.
Investment Management net revenues rose by 8% to $1.39 billion from $1.28 billion a year ago, spurred by increased asset management revenues resulting from higher average Assets Under Management (AUM) of $1.52 trillion.
Morgan Stanley's board of directors declared a quarterly dividend of $0.925 per share, payable on August 15, 2024, to common shareholders of record as of July 31, 2024.
Additionally, the firm reauthorized a multi-year repurchase program of up to $20 billion of outstanding common stock, without an expiration date.
