Morgan Stanley (MS) Q3 2022 Earnings Call Transcript

Morgan Stanley (NYSE:MS.PK) Q3 2022 Earnings Conference Call October 14, 2022 9:30 AM ET

Company Participants

James Gorman - Chairman and Chief Executive Officer

Sharon Yeshaya - Chief Financial Officer

Conference Call Participants

Ebrahim Poonawala - Bank of America

Christian Bolu - Autonomous Research

Glenn Schorr - Evercore ISI

Brennan Hawken - UBS

Dan Fannon - Jefferies

Devin Ryan - JMP Securities

Michael Mayo - Wells Fargo Securities

Gerard Cassidy - RBC Capital Markets

Operator

Good morning. Welcome to Morgan Stanley's Third Quarter 2022 Earnings Call. On behalf of Morgan Stanley, I will begin the call with the following information and disclaimers. This call is being recorded. During today's presentation, we will refer to our earnings release and financial supplement, copies of which are available at morganstanley.com.

Today's presentation may include forward-looking statements that are subject to risks and uncertainties that may cause actual results to differ materially. Please refer to our notices regarding forward-looking statements and non-GAAP measures that appear in the earnings release. This presentation may not be duplicated or reproduced without our consent.

I will now turn the call over to Chairman and Chief Executive Officer, James Gorman.

James Gorman

Good morning, everyone. Thank you for joining us, and I know we're starting a little later than some of the previous quarters. So I appreciate you staying with us. The Firm performed well in a very uncertain and difficult environment. An ROTCE of 15%, excluding integration expenses, flexes stability and strength of the business model. Wealth Management pre-tax margin, excluding integration expenses, was 28.4% and coupled with $65 billion of net new assets, demonstrates how this business even in a very volatile market environment and with indices down over 20% this year, continues to attract new client assets and remains highly profitable. This business' enormous scale and channel diversification should ensure continued success.

Investment Management and Investment Banking were clearly impacted by the market environment. But as I've said elsewhere, advisory and underwriting activity has not gone away, it has simply been deferred. Fixed income and equities remains very solid with no areas of obvious concern. Both businesses navigated the complicated markets without serious incidents.

Finally, the strength of our capital position is very clear, as shown by the continuation of our strong buyback program with $2.6 billion of share repurchases in this past quarter, coupled that with a dividend yield north of 3% and a CET1 ratio of 14.8%. On an operating basis, this Firm is doing well in a post-COVID world. From a markets perspective, we expect continued volatility as the Federal Reserve continues to tighten policy such to bring down inflation to acceptable long-term levels.