Jul. 24, 2014, 11:35 AM
- At issue are two residential MBS from 2007 underwritten by Morgan Stanley (MS +0.5%). The SEC found the bank misrepresented the current or historical delinquency status of the underlying loans.
- "Morgan Stanley understated the number of delinquent loans behind these securitizations during a critical juncture of the financial crisis and denied investors the full extent of the facts necessary to make informed investment decisions," says the SEC's Michael Osnato.
- The money will be returned to the harmed investors.
Jul. 17, 2014, 7:33 AM
- Excluding DVA, income of $1.9B or $0.91 per share vs. $900M and $0.37 one year ago. The quarter also included a discrete tax benefit of $609M - excluding that brings income down to roughly $1.3B and $0.60 per share, so the "beat" is closer to a nickel.
- Institutional Securities pre-tax income of $927M vs. $806M one year ago on roughly flat revenue of $4.16B (excl. DVA). FICC revenue of $1B slips from $1.2B, partially offset by higher advisory revenue. Equity sales and trading revenue of $1.8B was about flat. Compensation expense slipped by $100M to $1.7B.
- Wealth Management pre-tax income of $767M rises from $655M a year ago on revenue of $3.715B up from $3.531B. Pre-tax margin rises above 20%, coming in at 21%.
- Investment Management pre-tax income of $205M up from $160M a year ago on revenue of $692M up from $673M. AUM of $396B up from $347B thanks to market appreciation and positive flows.
- About $284M or 9.3M shares of stock repurchased during quarter. Morgan has approval from the Fed for $1B in buybacks through the end of 2015 Q1.
- MS +2.2% premarket
- Previously: Morgan Stanley beats by $0.35, beats on revenue
Jul. 17, 2014, 7:16 AM
Jul. 16, 2014, 5:30 PM
Jul. 15, 2014, 1:11 PM
- The team - collectively managing $650M in assets - left Morgan Stanley's (MS +0.5%) Portland office today and immediately set up Encompass Wealth Advisors using trading systems, research, lawyers, and office space arranged by Tru Independence, which will collect a portion of management fees for its services.
- A number of businesses are forming to help wealth managers exit the large banks and go it alone, and the head of one notes typically 95% of client assets follow those exits.
Jul. 2, 2014, 6:44 PM
- Rosneft (RNFTF) has submitted a deal to buy a Morgan Stanley (MS) oil trading unit to the confidential U.S. committee that weighs national security risks, WSJ reports, in a deal likely to face close scrutiny with Rosneft CEO Igor Sechin part of a U.S. sanctions list following the turmoil in Ukraine.
- Since a foreign government controls Rosneft, U.S. law directs the CFIUS committee to scrutinize the case at length, and top U.S. officials likely will take into account broader Russian economic and security factors that go beyond the specific risks of the business being sold.
- A CFIUS decision is likely to come 75 days after the filing, which means the deal could close in Q3.
Jul. 2, 2014, 12:31 PM
- Global M&A deals in H1 totaled $1.571T, according to Mergermarket, up 56% over the same period in 2013, and up 29.8% from last year's 2nd half. in the U.S., $694.6B of deals in H1 nearly doubled that of one year prior. European deals of $453.6B gained 35.5%, and Asian deals of $286.7B rose 56.8%.
- The M&A boom could help offset at least some of the widely expected continued trading slowdown this quarter (banks begin reporting their Q2s in about 10 days), and Goldman (GS +0.1%) tops the advisor tables with $533.8B in deals in H1, up 112% from a year ago. With $495.6M (up 180.4% Y/Y), Morgan Stanley (MS +0.5%) in in 2nd place. In third place, Bank of America (BAC +2.3%) deals grew 141.7%, and in fifth place, Citigroup (C +1.5%) saw a 177.2% boost in deals. JPMorgan (JPM -1.1%) took 4th place with $324.8B in deals, but saw just a 25.3% rise.
- ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, IAI, SEF, IYG, FXO, FNCL, FINU, KCE, RWW, RYF, KBWC, FINZ
Jul. 1, 2014, 1:22 PM
- It'll take having to pass an online training course and accumulating at least 15 followers, but then Morgan Stanley's (MS -0.1%) more than 16K advisers will have permission to compose their own tweets. Don't expect them to engage in quick-moving conversations often taking place on Twitter, as the brokers will still need approval from the firm before posting.
- Morgan Stanley has previously embraced LinkedIn as a way for its advisers to join groups and win business, but has been far more cautious with Twitter, and prior to this new policy only allowed tweets to be sent out from a pre-approved library of messages.
- Still, Morgan is ahead of the Thundering Herd. Merrill Lynch brokers are allowed use of LinkedIn, but Twitter remains a no-no.
Jul. 1, 2014, 7:38 AM
- In the final and maybe most difficult step of CEO James Gorman's drive to cut staffing costs across Morgan Stanley (MS), the bank is considering reductions in pay to its wealth managers, reports Reuters.
- At the moment, writes reported Lauren Tara LaCapra, changes at the margin are being looked at like cutting pay for those brokers generating the smallest amount of revenue, and slashing the amount of money used to lure experienced rainmakers.
- Cutting pay to brokers is more easily said than done because even mid-level advisers are in high demand and can jump ship, usually taking loyal customers with them.
- Gorman has previously stated his goal of paying 55% or less of wealth management revenues to brokers vs. 60% today. A move that large would save $884M in costs next year.
Jun. 25, 2014, 10:04 AM
- Banks could lose up to $4.5B in annual revenue as new regulations alter how swaps are traded, according to a report from McKinsey & Co. That amount is equal to 35% of the $13B in revenue booked by banks from trading in rate derivatives, and it comes at a time when FICC business is already on the decline.
- At issue are new rules requiring swaps trade on electronic systems rather than over the phone ("Thanks, big boy"), and the greater transparency should bite into profits. To counter this, says McKinsey's Roger Rudisuli, banks will have to cut costs and realign teams to focus attention on fewer customers.
- The usual suspects make up the 5 largest U.S. swaps dealers: JPM, C, BAC, GS, and MS.
- ETFs: IAI, KCE, KBWC
Jun. 25, 2014, 8:23 AM
- Morgan Stanley (MS) head of infrastructure investment banking in the Americas Perry Offutt will reportedly join Macquarie as a managing director within the bank's Infrastructure and Real Assets unit (MIRA). While at Morgan, Offutt worked on deals like the $483M sale of a long-term lease tied to Ohio State's parking operations, and the $1.9B sale of Indianapolis's community water and wastewater utilities to Citizens Energy Group.
- Morgan has yet to name a replacement.
Jun. 18, 2014, 7:30 AM
- JPMorgan's (JPM) Q1 investment banking revenue, according to Coalition, keeps the bank ahead of rivals like GS, DB, BAC, and C - all of whom tied for 2nd - but the amount of $5.9B was nearly 15% lower than the $6.9B posted a year ago.
- Revenue in fixed income, commodities, and currencies (FICC) of $3.2B put JPMorgan in the top spot in that category, but this figure was down more than 25% from 2013.
- In equities, JPMorgan's $1.4B in revenue tied it with Morgan Stanley (MS) for first place. In advisory business, it was Goldman Sachs and BAML - each bringing in about $1.5B - which led the way.
Jun. 12, 2014, 12:20 PM
- Both Alvise Munari, global head of equity derivatives, and Pierre Mendelsohn, head of the Asia derivates group, left BAML in 2010 at nearly the same time to join Morgan Stanley (MS +0.7%).
- Morgan Stanley has the hot hand in equity sales and trading, posting $1.7B in revenue in Q1, up $100M from last year at a time when the rest of the banking world is struggling in the trading business. The bank also won the Equity Derivatives House of the Year honor from International Financing Review in 2013. "We've had a phenomenal year in the U.S. across all of the client segments and all products," Munari told IFR.
Jun. 10, 2014, 4:02 PM
- We are now in a stage of "performance and growth," says Morgan Stanley (MS +0.3%) CEO James Gorman, presenting at the Morgan Financials conference. While 2008-09 was "crisis," 2010-11 "fragility," and 2012-13 "healing," 2014 and beyond is about about growing the business.
- Webcast and presentation slides
- Noting the headwinds in fixed income and commodities and the right-sizing of those businesses to be more inline with the new economic and regulatory environment, Gorman says Wealth Management - with $382B in AUM (up 50% since 2010) is on its way to being a legitimate 3rd leg of the firm.
Jun. 9, 2014, 8:44 AM
- With the sale of its 100% interest in TransMontaigne Partners to NGL Energy Partners, "Morgan Stanley’s (MS) leading commodities division will be leaner, more client focused and better aligned with the rest of the Firm’s businesses," says Colm Kelleher, President of Institutional Securities at the bank.
- The deal is expected to result in a non-material gain for Morgan.
- Source: Press release
- In other news, Morgan got the Barron's cover in a good way (or bad way if you're a contrarian type) over the weekend, with the magazine touting the bank's transformation towards less risk and less debt trading as providing the model going forward for the rest of Wall Street.
- The stock's ahead 0.15% premarket.
Jun. 6, 2014, 8:25 AM
- The jobs came from fixed income, currencies, and commodities (FICC), reports Bloomberg, where business hasn't been great of late.
- As opposed to some competitors, Morgan generates more trading revenue in equities than fixed income and actually posted an increase in trading income in Q1 (the only major U.S. bank to do so), but MS CFO Ruth Porat has said slow action in fixed income has continued into the second quarter.
MS vs. ETF Alternatives
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