Morgan Stanley books $90M in Q2 expenses from E*TRADE, Eaton Vance deals
Morgan Stanley (NYSE:MS) today reported its financial results for the second quarter of 2021.
Morgan Stanley reported net revenues of $14.8 billion for the second quarter ended June 30, 2021 compared with $13.7 billion a year ago. Net income applicable to Morgan Stanley was $3.5 billion, or $1.85 per diluted share, compared with net income of $3.2 billion, or $1.96 per diluted share, for the same period a year ago.
The comparisons of current year results to prior periods were impacted by the acquisitions of E*TRADE Financial Corporation, reported in the Wealth Management segment, and Eaton Vance Corp, reported in the Investment Management segment.
The Firm’s second quarter results include $90 million of integration-related expenses on a pre-tax basis ($69 million after-tax) as a result of the E*TRADE and Eaton Vance acquisitions. The integration-related expenses include $25 million in compensation expense and $65 million in non-compensation expense.
Wealth Management and Investment Management integration-related expenses include $9 million and $16 million in compensation expense, respectively, and $51 million and $14 million in non-compensation expense, respectively.
Institutional Securities reported net revenues for the current quarter of $7.1 billion compared with $8.2 billion a year ago. Pre-tax income was $2.5 billion compared with $3.0 billion a year ago.
Equity net revenues increased from a year ago driven by high levels of client activity with particular strength in Asia. Results reflect higher revenues in prime brokerage partially offset by declines in cash equities and derivatives driven by lower volatility and volumes compared to a year ago.
James P. Gorman, Chairman and Chief Executive Officer, said,
“The Firm delivered another very strong quarter, with contributions from all of our businesses. Our Wealth and Investment Management businesses attracted $120 billion in flows and Institutional Securities generated over $7 billion in revenues. With our transformed business model providing more stable and durable earnings, we have doubled our dividend and announced a $12 billion buyback as we move to return our excess capital to shareholders. Our global franchise is very well positioned to drive further growth.”