Global Finance News
14 Oct 2026, 15:20
Morgan Stanley Falls 3.3% as Higher Expenses and Fixed Income Weakness Offset Strong Equities and Wealth Growth
Morgan Stanley (NYSE: MS) shares fell about 3.3% after the bank reported third-quarter 2026 net revenues of $20.3 billion and net income of $4.9 billion, or $3.03 per diluted share. Revenue rose from $18.2 billion a year earlier, while EPS increased from $2.80.
Institutional Securities delivered strong growth, with revenue increasing to $10.0 billion from $8.5 billion. Equity revenue surged 41% to $5.8 billion, supported by broad client activity and strength in Asia. Investment Banking revenue rose 2%, helped by stronger advisory revenue, while Fixed Income revenue declined 7% to $2.0 billion.
Wealth Management was another bright spot, posting record revenue of $9.1 billion and a pre-tax margin of 30.4%. The business attracted a record $232 billion of net new assets and $80 billion of fee-based flows during the quarter.
Investment Management was weaker, with revenue falling 12% to $1.46 billion and pre-tax income declining to $259 million. The decline reflected a reversal of accrued carried interest tied mainly to investments in one private fund.
Expenses also increased meaningfully. Firmwide compensation expense rose to $8.0 billion from $7.4 billion, while non-compensation expense climbed to $5.7 billion from $4.8 billion. The expense efficiency ratio remained at 67%, while ROTCE declined to 22.6% from 23.5% a year earlier.
The 3.3% decline therefore appears to reflect investor concern over higher expenses, weaker Fixed Income and Investment Management performance, and lower year-over-year ROTCE, despite strong equity trading, record Wealth Management revenue and substantial client asset inflows.
Morgan Stanley (NYSE: MS) shares fell about 3.3% after the bank reported third-quarter 2026 net revenues of $20.3 billion and net income of $4.9 billion, or $3.03 per diluted share. Revenue rose from $18.2 billion a year earlier, while EPS increased from $2.80.
Institutional Securities delivered strong growth, with revenue increasing to $10.0 billion from $8.5 billion. Equity revenue surged 41% to $5.8 billion, supported by broad client activity and strength in Asia. Investment Banking revenue rose 2%, helped by stronger advisory revenue, while Fixed Income revenue declined 7% to $2.0 billion.
Wealth Management was another bright spot, posting record revenue of $9.1 billion and a pre-tax margin of 30.4%. The business attracted a record $232 billion of net new assets and $80 billion of fee-based flows during the quarter.
Investment Management was weaker, with revenue falling 12% to $1.46 billion and pre-tax income declining to $259 million. The decline reflected a reversal of accrued carried interest tied mainly to investments in one private fund.
Expenses also increased meaningfully. Firmwide compensation expense rose to $8.0 billion from $7.4 billion, while non-compensation expense climbed to $5.7 billion from $4.8 billion. The expense efficiency ratio remained at 67%, while ROTCE declined to 22.6% from 23.5% a year earlier.
The 3.3% decline therefore appears to reflect investor concern over higher expenses, weaker Fixed Income and Investment Management performance, and lower year-over-year ROTCE, despite strong equity trading, record Wealth Management revenue and substantial client asset inflows.
