•	The Firm delivered its second highest quarterly net revenues4 of $14.8 billion on continued strong performance and contributions across our businesses.
•	The Firm delivered ROTCE of 19.8%5,6 in a volatile and uncertain market environment.
•	The Firm maintained expense discipline and delivered an efficiency ratio of 69%6,7 while continuing to invest in our businesses.
•	Common Equity Tier 1 capital standardized ratio was 14.5%.
•	Institutional Securities net revenues of $7.7 billion reflect strong performance in Equity and Fixed Income on continued strong client engagement in volatile markets and in Advisory on higher completed M&A transactions.
•	Wealth Management delivered a pre-tax margin of 26.5% or 27.8% excluding integration-related expenses.6,8  Results reflect higher asset management fees and continued growth in bank lending. The business added net new assets of $142 billion, including an asset acquisition.9
•	Investment Management results reflect incremental fee-based asset management revenues and higher average AUM as a result of the acquisition of Eaton Vance.

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Institutional Securities

Investment Banking revenues down 37% from a year ago:

•	Advisory revenues nearly doubled from a year ago driven by higher levels of completed M&A transactions.

•	Equity underwriting revenues significantly decreased from a year ago on lower issuances in line with market volumes in an uncertain market environment.

•	Fixed income underwriting revenues decreased from a year ago as macroeconomic conditions contributed to lower bond issuances.

Equity net revenues up 10% from a year ago:

•	Equity net revenues increased from a year ago reflecting strong performance across businesses and geographies, particularly in EMEA, as a result of continued client engagement and the absence of a single client credit event a year ago.

Fixed Income net revenues essentially unchanged from a year ago:

•	Fixed Income net revenues were in line with a strong quarter a year ago reflecting higher revenues in commodities and foreign exchange which benefitted from elevated levels of client activity and market volatility in the current quarter, offset by lower revenues in credit products.

Other:

•	Other revenues decreased from a year ago driven by mark-to-market losses on investments associated with certain employee deferred compensation plans and corporate loans held for sale, net of related hedges.

•	Compensation expense decreased from a year ago primarily driven by reduced discretionary compensation on lower revenues and a decline related to certain deferred compensation plans linked to investment performance.

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Net revenues essentially unchanged from a year ago:

•	Asset management revenues increased 14% reflecting higher asset levels driven by positive fee-based flows and market appreciation from a year ago.

•	Transactional revenues15 decreased 20% excluding the impact of mark-to-market losses on investments associated with certain employee deferred compensation plans. Results reflect a decrease in client activity from significantly elevated levels a year ago.

•	Net interest income increased from a year ago on continued bank lending growth.

Total Expenses:

•	Non-compensation expenses increased from a year ago primarily driven by higher professional services expenses and investments in technology, partially offset by lower brokerage and clearing costs.

Net revenues essentially unchanged from a year ago:

•	Asset management and related fees increased from a year ago driven by incremental revenues as a result of the timing of the Eaton Vance acquisition.  AUM were impacted by market volatility and outflows in the current period.

•	Performance-based income and other revenues decreased from a year ago reflecting lower revenues from carried interest and mark downs on investments due to a decline in global asset prices and mark-to-market losses on investments associated with certain employee deferred compensation plans.

•	Non-compensation expenses increased from a year ago primarily driven by incremental expenses as a result of the Eaton Vance acquisition.6

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¹ Includes preferred dividends related to the calculation of earnings per share of $124 million and $138 million for the first quarter of 2022 and 2021, respectively.

 

² The Firm prepares its Consolidated Financial Statements using accounting principles generally accepted in the United States (U.S. GAAP). From time to time, Morgan Stanley may disclose certain “non-GAAP financial measures” in the course of its earnings releases, earnings conference calls, financial presentations and otherwise. The Securities and Exchange Commission defines a “non-GAAP financial measure” as a numerical measure of historical or future financial performance, financial position, or cash flows that is subject to adjustments that effectively exclude, or include amounts from the most directly comparable measure calculated and presented in accordance with U.S. GAAP. Non-GAAP financial measures disclosed by Morgan Stanley are provided as additional information to analysts, investors and other stakeholders in order to provide them with greater transparency about, or an alternative method for assessing our financial condition, operating results, or capital adequacy. These measures are not in accordance with, or a substitute for U.S. GAAP, and may be different from or inconsistent with non-GAAP financial measures used by other companies. Whenever we refer to a non-GAAP financial measure, we will also generally define it or present the most directly comparable financial measure calculated and presented in accordance with U.S. GAAP, along with a reconciliation of the differences between the non-GAAP financial measure we reference and such comparable U.S. GAAP financial measure.

³ Our earnings releases, earnings conference calls, financial presentations and other communications may also include certain metrics which we believe to be useful to us, analysts, investors, and other stakeholders by providing further transparency about, or an additional means of assessing, our financial condition and operating results.

 

⁴ Firm net revenues represent the second highest record for a reported quarterly period after excluding the impact of debt valuation adjustments (DVA), which was previously reflected in net revenues in prior periods, and reflecting the current reporting structure of the Firm. Net revenues, excluding the impact of DVA, was a non-GAAP financial measure in those prior periods that was reconciled to the comparable GAAP financial measure in the respective quarterly reports filed on Form 10-Q.

 

⁵ Return on average tangible common equity is a non-GAAP financial measures that the Firm considers useful for analysts, investors and other stakeholders to allow comparability of period-to-period operating performance and capital adequacy.  The calculation of return on average tangible common equity represents full year or annualized net income applicable to Morgan Stanley less preferred dividends as a percentage of average tangible common equity.  Tangible common equity, also a non-GAAP financial measure, represents common equity less goodwill and intangible assets net of allowable mortgage servicing rights deduction.

 

⁶ The Firm’s and business segment’s first quarter results for 2022 and 2021 include integration-related expenses as a result of the E*TRADE and Eaton Vance acquisitions reported in the Wealth Management segment and Investment Management segment, respectively. The amounts are presented as follows (in millions):

⁷ The Firm expense efficiency ratio represents total non-interest expenses as a percentage of net revenues.

 

⁸ Pre-tax margin represents income before taxes divided by net revenues.  Wealth Management pre-tax margin excluding the integration-related expenses represents income before taxes less those expenses divided by net revenues.  Wealth Management pre-tax margin excluding integration-related expenses is a non-GAAP financial measure that the Firm considers useful for analysts, investors and other stakeholders to allow comparability of period-to-period operating performance.

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