Morgan Stanley (MS) Q2 2024 earnings summary

Executive summary

• Second quarter 2024 net revenues reached $15.0B, up 12% year-over-year, with EPS at $1.82 and ROTCE at 17.5%, reflecting strong operating leverage and profitability across segments.

• Net income for Q2 2024 was $3.1B, a 41% increase year-over-year; ROE improved to 13.0%.

• First half 2024 revenues totaled $30.2B, with EPS of $3.85 and ROTCE of 18.6%.

• Institutional Securities and Wealth Management each contributed roughly half of revenues and earnings, highlighting a balanced business model.

• Total client assets grew to $7.2T, with Wealth Management assets at $5.7T and a clear path toward $10T+.

Financial highlights

• Institutional Securities revenues rose 23% year-over-year to $7.0B, driven by strong equity and debt underwriting performance.

• Investment banking revenues increased 51% year-over-year to $1.6B, with fixed income underwriting up 70%.

• Wealth Management generated $6.8B in revenue, with record asset management fees, a pre-tax margin of 26.8%, and $36B in net new assets.

• Asset management revenues in Wealth rose 16% year-over-year, supported by higher average asset levels and strong fee-based flows.

• Investment Management net revenues rose 8% to $1.4B, driven by higher AUM and carried interest.

Outlook and guidance

• NII is expected to decline modestly in Q3 due to changes in advisory sweep rates, but should inflect higher in 2025 as rate cuts and portfolio repricing take effect.

• Management remains confident in achieving a 30% pre-tax margin in Wealth Management over time, with current margins at 27%.

• ROTCE goal remains at 20% in a normal market environment.

• Investment banking rebound is in early stages, with healthy pipelines and expectations for multi-year growth as market activity normalizes.

• Ongoing focus on expense management and capital actions to support growth and regulatory requirements.