Morgan Stanley Third Quarter 2023 Earnings Results
Morgan Stanley Reports Net Revenues of $13.3 Billion, EPS of $1.38 and ROTCE of 13.5%
NEW YORK, October 18, 2023 – Morgan Stanley (NYSE: MS) today reported net revenues of $13.3 billion for thethird quarter ended September 30, 2023 compared to $13.0 billion a year ago. Net income applicable to Morgan
Stanley was $2.4 billion, or $1.38 per diluted share,1 compared to net income of $2.6 billion, or $1.47 per diluted
share,1 for the same period a year ago.
James P. Gorman, Chairman and Chief Executive Officer, said, “While the market environment remained mixed thisquarter, the Firm delivered solid results with an ROTCE of 13.5%. Our Equity and Fixed Income businesses navigatedmarkets well, and both Wealth and Investment Management produced higher revenues and profits year-over-year.
We completed the integration of E*TRADE in the quarter, further executing on our strategy of building revenue
synergies across channels and attracting clients to our best-in-class advice offering. Our ability to gather assets,
together with our strong capital position and leading client franchises, position us to deliver continued growth andstrong shareholder returns going forward.”

Financial Summary2,3Highlights

Firm ($ millions, except per share data)

3Q 2023

Net revenues

3Q 2022$13,273$12,986

Provision for credit losses

$134

$35

Compensation expense$5,935$5,614Non-compensation expenses$4,059$3,9497

Pre-tax income$3,145$3,388Net income app. to MS$2,408$2,632

Expense efficiency ratio5

75%

74%

Earnings per diluted share1

$1.38

$1.47

Book value per share$55.08$54.46

Tangible book value per share$40.53$39.93Return on equity

10.0%

10.7%

13.5%

14.6%

$5,669$5,817$938$1,277

Equity$2,507$2,459Fixed Income$1,947$2,181

Net revenues$6,404$6,120Fee-based client assets ($ billions)8$1,857$1,628

$22.5

$16.7

Return on tangible equity

4

Institutional Securities
Net revenues
Investment Banking

Wealth Management

9

Fee-based asset flows ($ billions)($ billions)10

$35.7

$64.8

U.S. Bank loans ($ billions)$145.8$145.7

Net revenues$1,336$1,168

AUM ($ billions)11$1,388$1,279$(6.8)$(1.9)Net new assets

Investment Management

12Long-term net flows ($ billions)Media Relations: Wesley McDade 212-761-2430• The Firm reported net revenues of $13.3 billion and net
income of $2.4 billion.

• The Firm delivered ROTCE of 13.5%.4• The Firm expense efficiency ratio year-to-date was 75%.5
The quarter included integration-related expenses of $68
million.
• Standardized Common Equity Tier 1 capital ratio was
15.5%.15• Institutional Securities net revenues of $5.7 billion reflect
solid results in Equity and Fixed Income and mutedcompleted activity in Investment Banking.

• Wealth Management delivered a pre-tax margin of 26.7%.6
Net revenues were $6.4 billion, reflecting increased asset
management revenues on higher average asset levels
compared to a year ago. The quarter included continued
strong positive fee-based flows of $22.5 billion.9• Investment Management net revenues of $1.3 billion
increased compared to a year ago on higher asset
management revenues and AUM of $1.4 trillion.11

Investor Relations: Leslie Bazos 212-761-5352

Institutional Securities
Institutional Securities reported net revenues for the current quarter of $5.7 billion compared to $5.8 billion a year ago.
Pre-tax income was $1.2 billion compared to $1.6 billion a year ago.7
Investment Banking revenues down 27% compared to ayear ago:($ millions)

3Q 2023

3Q 2022• Advisory revenues decreased driven by fewer completed
M&A transactions.

Net Revenues$5,669$5,817• Equity underwriting revenues increased primarily driven byhigher block offerings, partially offset by lower revenues
from IPOs.

Investment Banking$938$1,277Advisory

$449

$693

• Fixed income underwriting revenues decreased primarily
driven by lower event-driven non-investment grade activity.

Equity underwriting

$237

$218

Fixed income underwriting

$252

$366

Equity$2,507$2,459Fixed Income$1,947$2,181Equity net revenues up 2% compared to a year ago:
• Equity net revenues reflected solid results acrossbusinesses. Mark-to-market gains on business-related
investments compared to losses a year ago were offset byprime brokerage due to changes in the mix of clientbalances.
Fixed Income net revenues down 11% compared to a year
ago:

Other

$277

$(100)• Fixed Income net revenues decreased as lower client
activity and less favorable market conditions drove
declines in rates and foreign exchange. These declines
were partially offset by constructive trading environments incommodities, as well as agency and non-agency trading.

Provision for credit losses

$93

$24

Total Expenses$4,377$4,167Compensation$2,057$1,948Non-compensation$2,320$2,219Other:• Other revenues increased primarily driven by lower markto-market losses on corporate loans, net of loan hedges,
and higher net interest income and fees from corporateloans.
Provision for credit losses:• Provision for credit losses increased primarily driven by deteriorating conditions in the commercial real estate sector,
including provisions for certain specific loans.
Total Expenses:• Compensation expenses increased on higher discretionary compensation, partially offset by lower expenses related
to outstanding deferred equity compensation.
• Non-compensation expenses increased primarily driven by higher execution-related, technology and professional
services expenses.

2

Wealth Management
Wealth Management reported net revenues for the current quarter of $6.4 billion compared to $6.1 billion a year ago.
Pre-tax income of $1.7 billion7 in the current quarter resulted in a reported pre-tax margin of 26.7%.6
Net revenues increased 5% compared to a year ago:($ millions)

3Q 2023

3Q 2022• Asset management revenues increased 7% compared toa year ago reflecting higher average asset levels and theimpact of cumulative positive fee-based asset flows.

Net Revenues$6,404$6,120Asset management$3,629$3,389• Transactional revenues13 increased 7% excluding theimpact of mark-to-market gains on investments
associated with certain employee deferred compensationplans. The increase primarily reflects higher activity
associated with alternative products compared to a year
ago.

Transactional 13

$678

$616

$1,952$2,004

Other

$145

$111

Provision for credit losses

$41

$11

• Net interest income decreased 3% driven by changes indeposit mix, partially offset by higher interest rates.

Total Expenses$4,654$4,460Compensation$3,352$3,171

Non-compensation$1,302$1,289Provision for credit losses:

Net interest income• Provision for credit losses increased primarily driven byprovisions for certain specific commercial real estateloans.
Total Expenses:• Compensation expense increased driven by higher compensable revenues and expenses related to certain deferredcompensation plans linked to investment performance.

Investment Management
Investment Management reported net revenues of $1.3 billion, up 14% compared to a year ago. Pre-tax income was$241 million compared to $116 million a year ago.7($ millions)

3Q 2023

3Q 2022Net Revenues$1,336$1,168• Asset management and related fees increased onhigher average AUM driven by increased asset
values.

Asset management and related fees

$1,312$1,269Performance-based income and other$24$(101)• Performance-based income and other revenues
increased due to higher carried interest and mark-tomarket gains in certain of our private funds comparedto losses a year ago.

Total Expenses$1,095$1,052Compensation

$526

$495

Non-compensation

$569

$557

Net revenues increased 14% compared to a year
ago:

Total Expenses:• Compensation expense increased primarily driven by higher compensation associated with carried interest.

3

Other Matters• The Firm repurchased $1.5 billion of its outstanding common
stock during the quarter as part of its Share Repurchase
Program.

3Q 2023

3Q 2022

CET1 capital15

15.5%

14.8%

Tier 1 capital15

17.5%

16.7%

CET1 capital15

16.1%

15.2%

Tier 1 capital15

18.1%

17.1%

Tier 1 leverage16

6.7%

6.6%

SLR17

5.5%

5.4%

$1,500$2,555

17

30

Average Price$87.59$85.79Period End Shares (millions)

1,642

1,694

Effective Tax Rate

22.6%

21.4%

Capital14Standardized Approach• The Board of Directors declared a $0.85 quarterly dividend
per share, payable on November 15, 2023 to commonshareholders of record on October 31, 2023.
• Standardized Common Equity Tier 1 capital ratio was 15.5%,
approximately 260 basis points above the aggregate
standardized approach CET1 requirement that took effect asof October 1, 2023.

Advanced Approach

Leverage-based capital

Common Stock Repurchases
Repurchases ($ millions)
Number of Shares (millions)4Morgan Stanley is a leading global financial services firm providing a wide range of investment banking, securities,
wealth management and investment management services. With offices in 42 countries, the Firm’s employees serve
clients worldwide including corporations, governments, institutions and individuals. For further information about
Morgan Stanley, please visit www.morganstanley.com.
A financial summary follows. Financial, statistical and business-related information, as well as information regarding
business and segment trends, is included in the financial supplement. Both the earnings release and the financial
supplement are available online in the Investor Relations section at www.morganstanley.com.

NOTICE:The information provided herein and in the financial supplement, including information provided on the Firm’s earnings
conference calls, may include certain non-GAAP financial measures. The definition of such measures or reconciliationof such measures to the comparable U.S. GAAP figures are included in this earnings release and the financial
supplement, both of which are available on www.morganstanley.com.
This earnings release may contain forward-looking statements, including the attainment of certain financial and othertargets, objectives and goals. Readers are cautioned not to place undue reliance on forward-looking statements, which
speak only as of the date on which they are made, which reflect management’s current estimates, projections,
expectations, assumptions, interpretations or beliefs and which are subject to risks and uncertainties that may cause
actual results to differ materially. For a discussion of risks and uncertainties that may affect the future results of theFirm, please see “Forward-Looking Statements” preceding Part I, Item 1, “Competition” and “Supervision andRegulation” in Part I, Item 1, “Risk Factors” in Part I, Item 1A, “Legal Proceedings” in Part I, Item 3, “Management’s
Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 and “Quantitative andQualitative Disclosures about Risk” in Part II, Item 7A in the Firm’s Annual Report on Form 10-K for the year ended
December 31, 2022 and other items throughout the Form 10-K, the Firm’s Quarterly Reports on Form 10-Q and the
Firm’s Current Reports on Form 8-K, including any amendments thereto.

5

1Includes preferred dividends related to the calculation of earnings per share of $146 million and $138 million for the third quarter of 2023
and 2022, 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 adjustmentsthat 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 otherstakeholders 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, wewill 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

Return on average tangible common equity is a non-GAAP financial measure that the Firm considers useful for analysts, investors andother 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 apercentage 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.
5

The Firm expense efficiency ratio represents total non-interest expenses as a percentage of net revenues. For the quarter ended
September 30, 2023, Firm results include pre-tax integration-related expenses of $68 million, of which $43 million is reported in the WealthManagement business segment and $25 million is reported in the Investment Management business segment.
6

Pre-tax margin represents income before provision for income taxes divided by net revenues.

7

Pre-tax income represents income before provision for income taxes.

8

Wealth Management fee-based client assets represent the amount of assets in client accounts where the basis of payment for services isa fee calculated on those assets.
9

Wealth Management fee-based asset flows include net new fee-based assets (including asset acquisitions), net account transfers,
dividends, interest, and client fees, and exclude institutional cash management-related activity.
10

Wealth Management net new assets represent client inflows, including dividends and interest, and asset acquisitions, less client outflows,
and exclude activity from business combinations/divestitures and the impact of fees and commissions.
11

AUM is defined as assets under management.

12Long-term net flows include the Equity, Fixed Income and Alternative and Solutions asset classes and excludes the Liquidity and Overlay
Services asset class.
13

Transactional revenues include investment banking, trading, and commissions and fee revenues.

14

Capital ratios are estimates as of the press release date, October 18, 2023.

CET1 capital is defined as Common Equity Tier 1 capital. The Firm’s risk-based capital ratios are computed under each of the (i)standardized approaches for calculating credit risk and market risk risk‐weighted assets (RWAs) (the “Standardized Approach”) and (ii)applicable advanced approaches for calculating credit risk, market risk and operational risk RWAs (the “Advanced Approach”). For
information on the calculation of regulatory capital and ratios, and associated regulatory requirements, please refer to "Management’s
Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources – Regulatory Requirements" inthe Firm’s Annual Report on Form 10-K for the year ended December 31, 2022 (2022 Form 10-K).
15

6

The Tier 1 leverage ratio is a leverage-based capital requirement that measures the Firm’s leverage. Tier 1 leverage ratio utilizes Tier 1
capital as the numerator and average adjusted assets as the denominator.
16

The Firm’s supplementary leverage ratio (SLR) utilizes a Tier 1 capital numerator of approximately $77.7 billion and $76.4 billion, andsupplementary leverage exposure denominator of approximately $1.42 trillion and $1.41 trillion, for the third quarter of 2023 and 2022,
respectively.
17

7

Consolidated Income Statement Information(unaudited, dollars in millions)

Revenues:
Investment banking
Trading
Investments
Commissions and fees
Asset management
Other
Total non-interest revenues

Sep 30, 2023

Quarter Ended
Jun 30, 2023

Sep 30, 2022

$

$

$

Interest income
Interest expense
Net interest
Net revenues
Provision for credit losses
Non-interest expenses:
Compensation and benefits
Non-compensation expenses:
Brokerage, clearing and exchange fees
Information processing and communications
Professional services
Occupancy and equipment
Marketing and business development
Other
Total non-compensation expenses
Total non-interest expenses
Income before provision for income taxes
Provision for income taxes
Net income
Net income applicable to nonredeemable noncontrolling interests
Net income applicable to Morgan Stanley
Preferred stock dividend
Earnings applicable to Morgan Stanley common shareholders

$

$

1,048
3,679
144
1,098
5,031
296
11,296

1,155
3,802
95
1,090
4,817
488
11,447

Percentage Change From:Jun 30, 2023
Sep 30, 2022

1,373
3,331
(168)
1,133
4,744
63
10,476

(9%)
(3%)
52%
1%
4%
(39%)
(1%)

(24%)
10%
*
(3%)
6%
*
8%

Nine Months Ended
Sep 30, 2023
Sep 30, 2022$

3,533
11,958384
3,427
14,576
1,036
34,914$

Percentage
Change

4,281
10,911(70)
3,769
14,775245
33,911

(17%)
10%
*
(9%)
(1%)
*
3%

13,305
11,328
1,977
13,273

12,04810,0382,010
13,457

6,101
3,591
2,510
12,986

10%
13%
(2%)
(1%)

118%
*
(21%)
2%

36,22329,8906,333
41,247

12,363
5,355
7,008
40,919

193%
*
(10%)
1%

134

161

35

(17%)

*

529

193

174%

5,935

6,262

5,614

(5%)

6%

18,607

17,438

7%

855
947
759
456
191
851
4,059

875
926
767
471
236
947
4,222

847
874
755
429
215
829
3,949

(2%)
2%
(1%)
(3%)
(19%)
(10%)
(4%)

1%
8%
1%
6%
(11%)
3%
3%

2,611
2,788
2,236
1,367
674
2,718
12,394

2,607
2,560
2,217
1,286
610
2,713
11,993

-9%
1%
6%
10%
-3%

9,994

10,484

9,563

(5%)

5%

31,001

29,431

5%

3,145
710
2,435
27
2,408
146
2,262

2,812
591
2,221
39
2,182
133
2,049

3,388
726
2,662
30
2,632
138
2,494

12%
20%
10%
(31%)
10%
10%
10%

(7%)
(2%)
(9%)
(10%)
(9%)
6%
(9%)

9,717
2,028
7,689
119
7,570
423
7,147

11,295
2,382
8,913
120
8,793
366
8,427

(14%)
(15%)
(14%)
(1%)
(14%)
16%
(15%)

$

$

$

$

$

$

$

$

Notes:- Firm net revenues excluding mark-to-market gains and losses on deferred cash-based compensation plans (DCP) were: 3Q23: $13,475 million, 2Q23: $13,343 million, 3Q22: $13,222 million, 3Q23 YTD:
$41,182 million, 3Q22 YTD: $42,311 million.
- Firm compensation expenses excluding DCP were: 3Q23: $5,992 million, 2Q23: $6,084 million, 3Q22: $5,733 million, 3Q23 YTD: $18,293 million, 3Q22 YTD: $18,343 million.
- The End Notes are an integral part of this presentation. Refer to pages 12 - 17 of the Financial Supplement for Definition of U.S. GAAP to Non-GAAP Measures, Definition of Performance Metrics and Terms, Supplemental
Quantitative Details and Calculations, and Legal Notice.

8

Consolidated Financial Metrics, Ratios and Statistical Data
(unaudited)

Quarter Ended
Sep 30, 2023 Jun 30, 2023 Sep 30, 2022

Percentage Change From:Jun 30, 2023 Sep 30, 2022

Nine Months Ended
Sep 30, 2023 Sep 30, 2022

Percentage
ChangeFinancial Metrics:
Earnings per basic share
Earnings per diluted share$$

Return on average common equity
Return on average tangible common equity
Book value per common share
Tangible book value per common share

1.39
1.38

$
$

10.0%
13.5%
$
$

55.08
40.53

1.25
1.24

$
$

8.9%
12.1%
$
$

1.49
1.47

11%
11%

(7%)
(6%)

$
$

10.7%
14.6%

55.24
40.79

$
$

4.37
4.33

$
$

10.5%
14.2%

54.46
39.93

$
$

55.08
40.53

4.95
4.88

(12%)
(11%)

11.9%
16.1%
$
$

54.46
39.93

Financial Ratios:
Pre-tax profit margin
Compensation and benefits as a % of net revenues
Non-compensation expenses as a % of net revenues
Firm expense efficiency ratio
Effective tax rate

24%
45%
31%
75%
22.6%

21%
47%
31%
78%
21.0%

26%
43%
30%
74%
21.4%

Period end common shares outstanding (millions)Average common shares outstanding (millions)
Basic
Diluted

1,642

1,659

1,694

(1%)

(3%)

1,624
1,643

1,635
1,651

1,674
1,697

(1%)
--

(3%)
(3%)

Worldwide employees

80,71082,006

81,567

(2%)

(1%)

24%
45%
30%
75%
20.9%

28%
43%
29%
72%
21.1%

1,635
1,653

1,704
1,725

Statistical Data:

(4%)
(4%)

The End Notes are an integral part of this presentation. Refer to pages 12 - 17 of the Financial Supplement for Definition of U.S. GAAP to Non-GAAP Measures, Definition of Performance Metrics andTerms, Supplemental Quantitative Details and Calculations, and Legal Notice.

9