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Morgan Stanley's wealth management profit up by almost a quarter
20/04/2017 , News Team

Morgan Stanley’s wealth management division has reported pre-tax profit from continuing operations of $973 million for the first quarter. This is a year on year increase of 23.8 percent. The pre-tax margin for the quarter was 24 percent.

Net revenues for the division reached $4.1 billion, a year on year increase of 10.8 percent.

Asset management fee revenues of $2.2 billion increased from $2.1 billion a year ago reflecting “market appreciation and positive flows,” the bank said in its results statement.

Transactional revenues totalled $823 million, up from $727 million a year ago, primarily due to “gains on investments associated with certain employee deferred compensation plans.”

Net interest income of $994 million increased from $831 million a year ago on loan growth and higher interest rates. Wealth management client liabilities were $74 billion, an increase of $8 billion year on year.

Compensation expense reached $2.3 billion, an increase from $2.1 billion a year ago. This was driven by higher revenues and an increase in “the fair value of deferred compensation plan referenced investments.” Non-compensation expenses of $768 million decreased from $794 million as a result of lower professional services costs.

Total client assets for the quarter were $2.2 trillion and client assets in fee-based accounts were $927 billion at quarter end. Fee-based asset flows for the quarter were $18.8 billion.

The 15,777 wealth management representatives produced average annualized revenue per representative of $1.0 million during the quarter.

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