Morgan Stanley third-quarter net revenues rise 12% to $20.3 billion, EPS reaches $3.03

Morgan Stanley (MS) said Wednesday its third-quarter net revenues rose 12% to $20.3 billion from $18.2 billion a year earlier, while net income applicable to the company reached $4.9 billion.

The company reported $3.03 per diluted share, up from $2.80. A regulatory filing showed the results covered the quarter ended Sept. 30, 2026, and were released in a press release attached to the filing.

Here's how the company did:

• Net revenues: $20,338 million vs. $18,224 million a year earlier
• Net income applicable to Morgan Stanley: $4,909 million vs. $4,610 million a year earlier
• Earnings per diluted share: $3.03 vs. $2.80 a year earlier
• Pre-tax income: $6,478 million vs. $6,028 million a year earlier
• Return on average tangible common equity: 22.6% vs. 23.5% a year earlier
• Return on average common equity: 17.8% vs. 18.0% a year earlier

Net revenues rose 12% from a year earlier and fell 5% from the second quarter, when they totaled $21.3 billion.

Here's how the company's other segments did during the quarter:

• Institutional Securities net revenues: $10,029 million vs. $8,523 million a year earlier
• Wealth Management net revenues: $9,065 million vs. $8,234 million a year earlier
• Investment Management net revenues: $1,459 million vs. $1,651 million a year earlier

Institutional Securities net revenues rose 18%. Equity net revenues rose 41% to $5.8 billion, while Fixed Income fell 7% to $2.0 billion.

Investment banking revenue was $2.2 billion, up 2%. Advisory revenue rose to $887 million from $684 million, while equity underwriting fell to $525 million from $652 million.

Institutional Securities pre-tax income was $3.5 billion, compared with $3.2 billion a year earlier.

Wealth Management reported record net revenues of $9.1 billion, up 10% from a year earlier. Record pre-tax income of $2.8 billion produced a pre-tax margin of 30.4%.

Net new assets reached $232.4 billion, compared with $81.0 billion a year earlier. The company said just over half were associated with IPO-related flows.

Fee-based flows were $80.5 billion, compared with $41.9 billion a year earlier, and included a new corporate retirement mandate. Asset management revenue rose 16% to $5.5 billion.

Investment Management net revenues fell 12% to $1.5 billion. Performance-based income was reduced by the reversal of accrued carried interest, related primarily to certain investments in one of the company's private funds.

Compensation expense rose to $8.0 billion from $7.4 billion, and non-compensation expenses rose to $5.7 billion from $4.8 billion. The expense efficiency ratio was 67%, the same as a year earlier.

The company recorded a provision for credit losses of $148 million, compared with none a year earlier. The provision was primarily driven by growth in corporate and secured lending portfolios, and the quarter included $105 million of charge-offs tied to certain corporate and commercial real estate loans.

For the first nine months, net revenues were $62.3 billion, up 18%, and diluted earnings per share were $9.93, compared with $7.53.

Chairman and Chief Executive Officer Ted Pick said, "We continue to invest for growth while delivering strong returns for shareholders."

The company repurchased $1.5 billion of its common stock during the quarter, about 7 million shares at an average price of $212.74, compared with $145.77 a year earlier.

The board declared a quarterly dividend of $1.15 per share, payable Nov. 13, 2026, to common shareholders of record on Oct. 30, 2026.

The Standardized Common Equity Tier 1 capital ratio was 14.9%, compared with 15.1% a year earlier. The effective tax rate was 23.3%, compared with 22.8%.

Book value per common share was $68.59, compared with $62.98 a year earlier, and tangible book value per share was $53.96, compared with $48.64.

The company had 83,728 worldwide employees, compared with 82,398 a year earlier. In the first quarter of 2026, it recorded $178 million of severance costs from a workforce management action affecting about 2% of its global workforce, the filing said.

The release did not include financial guidance for future quarters.