Thu, Nov. 12, 2:43 AM
- Morgan Stanley (NYSE:MS) plans to offer savings accounts and certificates of deposits next year to wring more profit from its wealth management clients.
- "You shouldn't have to deal with two or three financial institutions," said Eric Heaton, president of Morgan Stanley U.S Banks. "Just deal with us."
- The bank has offered checking accounts and credit cards for years, but is launching more consumer banking products and giving brokers bonuses if clients use them.
Tue, Oct. 27, 12:29 PM
- Morgan Stanley (NYSE:MS) this summer completed raising money ($1.7B) for its first higher-risk real estate fund since before the property bust in 2007.
- With cap rates low and Sam Zell hitting the bid on some of his holdings, one could be forgiven for questioning the bank's timing.
- "The market is insanely competitive right now,” says John Klopp, co-chief of the real estate unit at Morgan Stanley. "There’s a ton of capital chasing real estate in every market in every nook and cranny.”
- The unit in recent post-bust years has been putting money to work in conservative assets - fully leased buildings in prime locations - but of late investors are interested in "opportunity funds." These invest in new developments, raw land, and fixer-uppers, and target returns of 20% or more. These sorts of funds have raised a post-bust record $47.7B this year, still well below $74.2B in 2008.
- The new Morgan Stanley fund has committed about one-third of its equity, with ten closed deals and another seven in the pipeline.
- Source: WSJ
Mon, Oct. 19, 9:48 AM
- "We've said what we want to say about this," says a becoming-irritated Morgan Stanley (MS -5.7%) CEO James Gorman, taking yet another earnings call question about the bank's lame trading revenue results in Q3. "It is what it is."
- Morgan earlier reported a 41% Y/Y decline in FICC revenue, helping the bank to a big earnings miss. Goldman Sachs, by comparison, posted a 33% decline, and while a sizable gain in equities trading revenue helped offset at Goldman, Morgan Stanley reported a flat result there.
- It's been Morgan Stanley's strategy to lean on wealth management as a source of stability, and that unit produced income of $824M vs. $800M a year earlier (though revenue slipped $200M to $3.6B).
- Webcast and financial supplement
- Previously: Morgan Stanley tumbles premarket after big earnings miss (Oct. 19)
- Previously: Morgan Stanley misses by $0.29, misses on revenue (Oct. 19)
Mon, Oct. 19, 9:13 AM
Mon, Oct. 19, 7:24 AM
- Excluding DVA, net income of $740M or $0.34 per share compared to $1.3B and $0.64 one year ago. Revenue of $7.3B dropped from $8.7B. Both numbers missed consensus by a mile. Annualized ROE of 3.9%.
- Institutional Securities pretax income of $688M vs. $1.2B a year ago. Advisory levels rose - to $557M from $392M, but FICC revenue plunged to $583M from $997M.
- Wealth Management pretax income of $824M vs. $800M a year ago, with net revenue of $3.6B slipping from $3.8B. Pretax margin of 23%.
- Investment Management pretax loss of $38M vs. a profit of $193M a year ago, mostly thanks to a reversal of previously accused carried interest associated with Asia P-E business.
- Total compensation expense of $3.4B falls from $4.2B a year ago.
- Fully phased-in CET 1 ratio of 12.4%. Tangible book value per share of $29.99 vs. Friday's close of $33.94.
- Conference call at 8:30 ET
- Previously: Morgan Stanley misses by $0.29, misses on revenue (Oct. 19)
- MS -5.7% premarket
Mon, Oct. 19, 6:59 AM
Sun, Oct. 18, 5:30 PM
Thu, Oct. 8, 9:40 AM
Wed, Oct. 7, 9:30 AM
- It's all about growth in the wealth management business, says RBC Capital's Fiona Swaffield, upgrading Morgan Stanley (NYSE:MS) to Outperform. Her $39 price target is 20% above last night's close.
- The key revenue driver for wealth management has been net interest income, and there's room for plenty more given the bank's ample funding to support loan growth, and its low loan to deposit ratio.
- Morgan Stanley is targeting $200B in deposits vs. the current $132B, and the penetration of mortgages in its client base to 5% from 2%.
- There's also the chance of higher interest rates, and Swaffield sees a 100 basis points increase boosting pretax earnings by $750M - a benefit, but hardly game-changing as the bank can probably be expected to earn somewhere in the area of $11B over the next year.
- Shares +1.9%
Tue, Oct. 6, 12:13 PM
- The two U.S. banks lost plenty of trading action from hedge fund clients to European competitors during the financial crisis, but are winning it back in part thanks to new capital rules forcing the European lenders to whittle down their operations.
- According to Preqin, Goldman (NYSE:GS) and Morgan Stanley (NYSE:MS) have added about six hundred basis points of market share since the end of last year to 37%.
- Prime brokerage is one of the few areas on Wall Street where revenue and pricing are on the rise, say analysts, and could provide a buffer to Q3 earnings expected to take a hit from weaker FICC action.
- Among the European banks losing market share are Deutsche Bank (NYSE:DB), and Credit Suisse, whose new CEO plans further cutbacks in prime brokerage.
Mon, Oct. 5, 3:31 PM
- The Street has priced in earnings declines for pretty much every sector, but Q3 and Q4 estimates for the financials have barely budged, and consensus sees Q3 results 10% above that of a year ago.
- Morgan Stanley's Huw van Steenis, however, sees FICC revenue declines of 10-25% - far more than the 5% or so that's been talked about by bank managements at recent investor conferences - as the commodity price crash combines with collapsing fixed-income trading, and the lack of volatility in forex action.
- With just $20B in FICC revenues, says van Steenis, Q3 is shaping up to be the second worst quarter for banks in the last two years. Leaving his own bank (NYSE:MS) out of the analysis, he sees FICC revenue declines of 17% at JPMorgan (NYSE:JPM), 9% at Goldman (NYSE:GS), and 6% at BofA (NYSE:BAC) and Citi (NYSE:C).
- Bottom line: "On EPS, we are 4% below consensus on average across our coverage for 2015, and 5% below for 2016. The biggest delta is for Barclays (NYSE:BCS), BNP Paribas (OTCQX:BNPQY), and Goldman in 2015, and SocGen (OTCPK:SCGLY), HSBC, and BNP in 2016."
- Source: ZeroHedge
Thu, Oct. 1, 5:11 PM
- JPMorgan Chase (NYSE:JPM) will pay almost a third of a $1.86B settlement to resolve accusations that a dozen big banks conspired to limit competition in the credit default swaps market, Bloomberg reports.
- JPM reportedly will pay $595M, followed by Morgan Stanley (NYSE:MS) with $230M, Barclays (NYSE:BCS) at $175M, Goldman Sachs (NYSE:GS) at $164M, Credit Suisse (NYSE:CS) at $160M and Deutsche Bank (NYSE:DB) at $120M; BofA (NYSE:BAC), BNP Paribas (OTC:BNPZY), UBS, Citigroup (NYSE:C), Royal Bank of Scotland (NYSE:RBS) and HSBC would pay less than $100M each.
- The deal would avert a trial and end years of litigation by hedge funds, pension funds, university endowments, small banks and other investors, who sued as a group.
Thu, Oct. 1, 9:34 AM
- Equities chief Edward Pick is named global head of sales and trading, putting him in charge of fixed-income trading, reports the WSJ.
- Investment banking rainmaker Dan Simkowitz has been tapped to be head of investment management, reporting directly to MS CEO James Gorman. Overshadowed by the fast growth in wealth management over the past few years, this area had previously been under the charge of President Greg Fleming.
- "We always need to look to our future while managing the present,” says the memo - singed by Gorman, Fleming, and Colm Kelleher (also a president) - announcing the changes.
- Both Pick and Simkowitz joined the bank in 1990 and each ran key, well-performing businesses. Their new task will be to re-charge divisions with less-than-impressive track records of late.
Mon, Sep. 28, 2:48 PM
- It isn't just Glencore (OTCPK:GLCNF, OTCPK:GLNCY) who is tanking, as at least one measure of raw materials producers plunges to seven-year lows following the company's woes and data that showed weakening Chinese industrial profits.
- Shares of Glencore plunged 29% to close at just 69 pence, an all-time low, exaggerated by a damning report that said future earnings are so uncertain that the company may need to direct all of its efforts to repay debt.
- Freeport McMoRan (FCX -10.2%) is hit hard after breaking below support at $10/share, and global mining peers Rio Tinto (RIO -4.1%), BHP Billiton (BHP -4.5%) and Vale (VALE -9.4%) also are smacked down.
- A number of other firms also are in situations not that much different from Glencore, says DTN analyst Darin Newsom, noting that Caterpillar (CAT -2.2%) and Deere (DE -1.6%) have been struggling and adding that pressure on Glencore may “create a vacuum those other struggling companies could get sucked into."
- Along with oil and gas producers and precious metals miners, even financial stocks are affected, with Morgan Stanley (MS -3.6%) and Goldman Sachs (GS -3.4%) underperforming their banking peers, perhaps as investors grow nervous about the potential for any of Glencore's problems possibly blowing back on other commodity trading operations.
Wed, Sep. 16, 12:39 PM
- Merger-and-acquisition volume in 2016-17 should be $3.3T-$4.5T, says Guggenheim, up from its previous forecast of $2.7T-$4.5T. The current drivers of M&A are likely to remain in place; macroeconomic conditions may remain uneven; and several specific factors may compel consolidation in certain industries. Health care, media, and telecom activity has been robust, and should stay so. Activity in energy should increase, but banking M&A should stay subdued.
- The winners? U.S. bulge bracket and boutique firms have gained market share at the expense of European and other non-U.S. companies. Showing the most market share gains is Goldman Sachs (NYSE:GS), followed by Morgan Stanley (NYSE:MS), JPMorgan (NYSE:JPM), Bank of America (NYSE:BAC), and Citigroup (NYSE:C). Goldman remains Guggenheim's Best Idea, and BofA and Ciit remain buys, partly thanks to the M&A thesis.
Mon, Aug. 31, 11:19 AM
- “When you feel like crying, it’s time to start buying," says analyst Glenn Schorr and team, boosting both Goldman (GS +0.7%) and Morgan (MS +1.6%) to Buy from Hold.
- Valuations look good after the roughly 15% pullback in both - with Goldman going for 9.7x earnings and 1.1x book, and Morgan at 9.2x and 1.0x.
- Q3 looks like it's been a tough one so far, but the quarter isn't over yet, and boosted volatility should mean higher volumes in both banks' FICC business.
- He also notes positive seasonality: While Sept. can be sluggish (and this year should prove no exception thanks to a late Labor Day and 2 mid-week Jewish holidays), October and December have proven to be strong months.
Morgan Stanley through its subsidiaries and affiliates, provides financial products and services to a diversified group of clients and customers, including corporations, governments, financial institutions and individuals.
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