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Morgan Stanley Results: Positive Profit Beat, Credit Metrics Solid. Awaiting The Call...

FINANCIALS

Morgan Stanley results beat on positive revenues across the IB and asset gathering businesses. Credit metrics appear solid. A jump in CRE lending in the period is a very interesting point of differentiation though – and from a historically “smart investor” of a bank. We see the profit beat as marginally credit positive but there are few laterals as this is the last of the “big 5” to report.


  • Key credit metrics: CET1 ratio dropped 20bp from Dec-23 (to 15.3%) but this is inline with consensus, the T1 leverage ratio is flat and SLR is down 10bp (to 5.4%). Loans are down from Dec-23, apart from CRE and residential, which are 10% higher – an interesting view on bottom-fishing, perhaps? ACLs (credit provisions) are broadly flat.
  • Broad operations: MS is much more of an equity business so posted one of the weaker primary revenue growth figures (+16% vs. peer avg of +25%) but this was still 8% ahead of consensus. Overall revenues beat by 5% with very strong net new assets in wealth. Costs were inline with consensus leading to a near-20% profit beat. Loan losses were a write-back.
  • Outlook: MS is one of the least credit-geared of the Wall Street banks but that growth in CRE lending in 1Q24 is notable. There’s no outlook statement with results (we await the call).
Conf call is 1430 (London), at: {https://morganstanley.webcasts.com/starthere.jsp?e...}

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