Morgan Stanley reports 2018 Q1 financial results

Morgan Stanley Reports First Quarter 2018
• Record Net Revenues of $11.1 Billion and Record Net Income of $2.7 Billion1,2,3
• Earnings per Diluted Share of $1.45
• Strong Performance across all Business Segments and Geographies
• Results Reflect Significant Operating Leverage Achieved Through Strong Expense Discipline

James P. Gorman, Chairman and Chief Executive Officer, said, “We delivered very strong results this quarter, with record revenues and net income - and an ROE above our target range. Each of our businesses performed well, with significant client engagement across our global franchise, and Sales and Trading a particular highlight in a more active environment.”

Financial Overview
Morgan Stanley reported net revenues of $11.1 billion for the first quarter ended March 31, 2018 compared with $9.7 billion a year ago. For the current quarter, net income applicable to Morgan Stanley was $2.7 billion, or $1.45 per diluted share, compared with net income of $1.9 billion, or $1.00 per diluted share, for the same period a year ago.

Compensation expense of $4.9 billion increased from $4.5 billion a year ago on higher revenues. Non-compensation expenses of $2.7 billion increased from $2.5 billion a year ago principally on higher volume driven expenses. The Firm’s expense efficiency ratio for the current quarter was 69%.

The annualized return on average common equity was 14.9% and return on average tangible common equity was 17.2% in the current quarter.

Business Highlights
• Institutional Securities net revenues were $6.1billion reflecting strength across our sales and trading franchise; Investment Banking Ranked #1 in Global Announced and Completed M&A and GlobalEquity.
• Wealth Management reported net revenues of $4.4billion, record pre-tax income of $1.2 billion and apre-tax margin of 26.5%; Strong fee-based asset flows of $18.2 billion for the quarter.
• Investment Management net revenues were $718 million reflecting higher management fees; Continued positive long-term net flows in the quarter.

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