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Jul. 20, 2015, 7:02 AM
- Morgan Stanley (NYSE:MS): Q2 EPS (excl. DVA) of $0.79 beats by $0.05.
- Revenue (excl. DVA) of $9.56B (+12.2% Y/Y) beats by $460M.
Jul. 19, 2015, 5:30 PM
Jul. 10, 2015, 7:54 AM
- Royal Dutch Shell (RDS.A, RDS.B) agrees to buy Morgan Stanley's (NYSE:MS) European gas and power trading portfolio for an undisclosed sum.
- "Comprising predominantly physical and financial gas and power trades, the deal further expands Shell's activities in core energy markets across Europe," the company says.
- Morgan Stanley’s exit from trading power and gas in Europe follows similar moves by Deutsche Bank, Bank of America and Barclays in the past two years.
Jul. 6, 2015, 4:41 PM
- Last year, the Fed and FDIC found most of wind-down plans submitted by twelve of the largest U.S. banks (or U.S. units of overseas banks) had numerous deficiencies, and sent the lenders back to the drawing board.
- The two government agencies today posted public sections of the latest versions of the living wills, and said they will begin reviewing. Feedback is expected before year-end.
- The lucky 12: BAC, BK, C, GS, JPM, MS, STT, UBS, WFC, BCS, CS, DB.
Jun. 29, 2015, 8:53 AM
- Since the financial crisis, Morgan Stanley's (NYSE:MS) plan has been to de-emphasize its trading operations in favor of more stable, less risky businesses like wealth management. It's a move which has won the applause of investors and analysts, and Morgan is up 62% over the past two years vs. Goldman Sachs' - still a believer in fixed-income - 41% advance.
- However, with profitability targets still to be hit, U.S. rates on the rise, and a recent credit-rating boost from Moody's, Morgan CEO James Gorman and team see an opportunity for the bank to take a larger slice of Wall Street's roughly $100B in annual fixed-income trading revenue.
- In recent weeks Morgan has reportedly been soliciting more fixed-income business and pitching more trading ideas to its clients. Of import for those worried about risk: Management believes it can gain more business - perhaps several billion above the $3.8B in revenue in 2014 - without enlarging the balance sheet. By focusing on large money managers, Morgan hopes for a speedy pace of paper coming and going from the bank, thus keeping inventories trimmed.
- Source: WSJ
Jun. 10, 2015, 10:01 AM
- More than six years after the bottom, only four of the globe's biggest banks sport stock prices trading at a premium to book value. Leading the way is UBS at about 1.4x book. Goldman Sachs (NYSE:GS), JPMorgan (NYSE:JPM), and Morgan Stanley (NYSE:MS) also trade for north of book.
- Deutsche Bank (NYSE:DB) - whose ROE of 2% is about one-tenth of what it was pre-crisis - brings up the rear at just about 0.5% of book. Barclays (NYSE:BCS) sells for roughly 0.7x book, and Bank of America (NYSE:BAC) only slightly more than that.
- Checking further on ROE, Goldman leads the way at about 12%. Citigroup (NYSE:C) is less than 5%, but stands out as being the only bank with a higher ROE today than before the crisis.
- Looking at total return since the crisis, Goldman again leads the way at about 170%, with Morgan Stanley and JPMorgan a close second/third. Citigroup is the only major bank with a negative total return over that time frame.
- Source: Bloomberg
Jun. 3, 2015, 12:36 PM
- “A clear separation has emerged between the biggest brokers and the rest of the market,” says Jay Bennett of Greenwich Associates. A survey by his firm finds the top four U.S. equity brokers - Goldman Sachs (NYSE:GS), JPMorgan (NYSE:JPM), Bank of America (NYSE:BAC), and Morgan Stanley (NYSE:MS) - are widening their market share lead over the rest of the industry.
- According to Greenwich, all had more than an 8% share of trading, with number five Credit Suisse (NYSE:CS) at 6.9%.
- Bennett calls it a segmented market composed of the big four, the rest of the bulge bracket, and a long tail of competitors with relatively smaller shares.
- ETFs: IAI, KCE, KBWC
Jun. 3, 2015, 11:01 AM
- For regulatory reasons (pressure to counter money laundering), Morgan Stanley (MS +1.6%) recently shifted coverage of Caribbean and Latin American clients out of wealth management and into its institutional business, according to the company.
- As a result, Morgan's The Americas Group, led by Don d'Adesky, moved its practice and $2.4B in client assets to Raymond James (RJF +2%). While brokerages typically go to the mattresses to retain such business, a Morgan spokeswoman simply said the bank was no longer able to accommodate the team's business model.
- Raymond James pronounces itself "very comfortable with the team's business model."
- Source: WSJ
Jun. 1, 2015, 3:42 PM
- Morgan Stanley's (MS +1%) brokerage has about 4M clients and $2.05T in assets, with private wealth management dealing with those customers with a net worth of $20M or more.
- Eric Benedict is leaving after 19 years with the firm, and he's being replaced by Vince Lumia, currently head of capital markets for the brokerage division. Investment banker Elizabeth Dennis will succeed Lumia.
- The reshuffle continues an effort by CEO James Gorman to build a deeper bench of top management and create stronger ties between the bank's two largest divisions.
- Source: WSJ
May 28, 2015, 2:43 AM
- Morgan Stanley (NYSE:MS) CEO James Gorman defended the 25% pay hike to $22.M he was awarded last year - reportedly the highest among Wall Street CEOs - saying it was justified by the bank's performance.
- "We had three years where the stock went up...so the board, representing shareholders, thought that justified very strong performance," Gorman declared. "In previous years, when we underperformed, we were payed down and that's the way it should be."
- Shares of the bank have risen over the past three years, up 19% in 2012, 60% in 2013 and 23% in 2014.
- Previously: Morgan Stanley's Gorman gets 25% pay raise in 2014 (Apr. 01 2015)
May 19, 2015, 11:17 AM
- April was about as expected, but revenue from fixed income, currencies, and commodities isn't looking good at the investment banks in May, according to the team at JPMorgan.
- Equity business, however, is outperforming, which should be to the benefit of shops like SocGen (OTCPK:SCGLY), UBS, and Morgan Stanley (NYSE:MS).
- At Morgan Stanley, CEO James Gorman - speaking to reporters following the annual meeting - says market conditions have remained "solid" in spite of geopolitical news which would have spooked investors in the past. Gorman declined to give a more specific update on how Q2 was faring at his bank.
- ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, BTO, IAI, SEF, IYG, FXO, FNCL, FINU, KCE, RWW, RYF, KBWC, FINZ
May 11, 2015, 5:22 PM
- Morgan Stanley (NYSE:MS) confirms the sale of its Global Oil Merchanting unit of its commodities division, to Castleton Commodities International; financial terms are not disclosed, but FT reports the purchase price is at least $1B.
- The sale marks the end of Wall Street’s controversial involvement in physical oil trading; MS had agreed to sell the business to Russia's Rosneft but the deal fell apart amid tensions over the Ukraine conflict.
- While smaller now than in its heyday, MS was still handling ~2M bbl/day, or 2% of global demand, and has 45 leases totaling ~30M barrels of tank capacity.
May 6, 2015, 5:58 PM
- Morgan Stanley's (NYSE:MS) commodities group says it renewed a refined product storage deal with TransMontaigne Partners (NYSE:TLP) seven months early, extending its lease agreements for ~2.7M barrels of refined product storage in Mississippi.
- TLP says it is also in the preliminary stages of pursuing an expansion of its Collins terminal facility that would include an additional 1M barrels of storage.
- MS's move comes as it continues to seek a buyer for its physical oil business after a deal to sell it to Russia's Rosneft fell apart last year.
May 1, 2015, 9:54 PM
- With plans (but not detailed plans, yet) to go public, Spanish-language broadcaster Univision swung to a $139.7M net loss in Q1, from a year-ago profit of $6.2M.
- The company hired Morgan Stanley (NYSE:MS), Goldman Sachs (NYSE:GS) and Deutsche Bank (NYSE:DB) to lead an IPO that it hopes will raise $1B, which would value the broadcaster around $20B.
- Revenues were up 0.6% to $624.7M. Univision blamed its loss on termination fees that it owed to the private-equity owners of its parent, Univision Communications, as well as to Grupo Televisa (NYSE:TV).
- Televisa used convertible debt to build a 38% stake in Univision and has the right to take that to 40%, so it is set to draw a payoff from Univision's eventual offering. It also drew a record $314M rebroadcasting royalty from Univision in 2014.
Apr. 20, 2015, 11:10 AM
- While Evercore ISI's Glenn Schorr calls Morgan Stanley's (MS +1.2%) Q1 results a "Bo Derek" - otherwise known as a "10" - JMP's Devin Ryan is somewhat more measured.
- After stripping out a sizable tax benefit, "core" EPS still beat estimates, but not by nearly as gaudy an amount as the headlines suggest. The outperformance - however - was driven by FICC action, and one wonders how sustainable that is. Wealth Management revenues, on the other hand, were 3% less than what Ryan had modeled.
- "We suspect investors will initially view results favorably, but given the trading-heavy outperformance, we believe the focus will also be on sustainability, which could temper the upside."
- Speaking on the earnings call, Google-bound CFO Ruth Porat - applauding some of the regulatory measures aimed at banks since the crisis - calls for a "time out" to "pause, digest, and assess" what's working and what's not.
- Previously: Morgan Stanley +2% after strong Q1. (April 20)
Apr. 20, 2015, 7:47 AM
- Q1 income from continuing operations (excluding DVA) of $2.3B or $1.14 per share vs. $1.4B and $0.70 one year ago. Company realized a net tax benefit of $564M or $0.29 per share thanks to repatriation of non-U.S. earnings at a lower than expected rate, so the earnings beat was closer to $0.07. Annualized ROE of 10.1%.
- Institutional Securities pre-tax income (excl. DVA) of $1.688B on revenue of $5.333B vs. $1.290B and $4.551B a year ago. FICC revenue of $1.9B vs. $1.7B. Advisory revenue of $471M vs. $336M. Equity sales and trading revenue of $2.3B vs. $1.7B.
- Wealth Management pre-tax income of $855M vs. $686M a year ago on revenue of $3.834B vs. $3.609B. Pre-tax margin of 22%.
- Investment Management pre-tax income of $187M vs. $268M a year ago.
- CET1 ratio of 13.7%. Tangible book value per share of $28.91.
- Firm repurchased about $250M of stock during quarter, or roughly 7M shares.
- Previously: Morgan Stanley beats by $0.36, beats on revenue (April 20)
- MS +2% premarket
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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