Morgan Stanley reported adjusted first-quarter net income of $966 million, or $0.50 per share, compared with income of $1.8 billion, or $1.03 per share, for the same period a year ago. These results beat analysts' estimates, though net revenues of $7.6 billion for the first quarter — down 16% from the same period a year ago — fell short of expectations by about $250 million. According to the company, results for the current quarter included a pre-tax loss of $655 million related to the firm's 40% stake in the Japanese securities joint venture Mitsubishi UFJ Morgan Stanley Securities Co. The current quarter also included a net tax benefit of $447 million, or $0.30 per share. "We continued to strengthen our client franchise and delivered solid results across many of our businesses," said President and CEO James Gorman in a press release. "Our premier investment banking franchise remains a clear industry leader … We also made gains in key areas of focus — [with] positive flows across wealth management and asset management."
Morgan Stanley's Global Wealth Management Group reported pre-tax income from continuing operations of $348 million, up 25 percent from $278 million in the first quarter of last year, but down 11 percent from $390 million in the prior quarter. The quarter's pre-tax margin was 10 percent, the company says. And income after the non-controlling interest allocation to Citigroup Inc., $74 million, and before taxes was $274 million. Taking into account these adjustments, net income for the unit in the first quarter was $183 million, a jump of 85 percent from last year and 10 percent from the previous quarter. Net revenues were $3.4 billion, up 11 percent from $3.1 billion a year ago and up 3% from $3.3 billion in the previous quarter, thanks to higher commissions and asset management revenues, the company explained in a press release.
Total client assets were $1.7 trillion at quarter-end. Client assets in fee-based accounts were $501 billion, representing 29 percent of total client assets. Net new assets for the quarter were $11.4 billion, and net new flows in fee-based accounts were $17.8 billion. The 17,800 global representatives at quarter-end achieved average annualized revenue per global representative of $767,000 and total client assets per global representative of $97 million.
The current Morgan Stanley Smith Barney FA headcount is down about 2 percent, or by 340 reps, from last year and fell roughly 1 percent, or by 243 reps, from the prior quarter. In March, Morgan Stanley said it was laying off several hundred lower-producing advisors.
BofA-Merrill
In the first quarter of 2011, Merrill Lynch profits stood at $531 million, up 68.6% quarter-over-quarter and up 22.4 percent year-over-year. Revenues totaled $3.54 billion compared with $2.99 billion a year ago, for a gain of 18.5 percent. Merrill Lynch client balances stood at $1.55 trillion versus $1.45 trillion in Q1 2010, 6.9 percent higher. Quarter-over-quarter revenues were 3.3 percent higher from Q4 2010's $3.43 billion.
At nearly, 15,700, the number of financial advisors at Merrill Lynch rose by 184 FAs in the early part of 2011 from 15,511 in Q4 2010 and 15,178 a year ago.
Financial-advisor yearly production, or fees and commissions, rose to $931,000 per advisor in the first quarter from $913,000 in the previous period. Assets under management (AUM) at Merrill grew to more than $1.554 trillion, or $99 million in average assets per rep, versus $98 million in the fourth quarter of 2010.
