Morgan Stanley reported net revenues of $9.2 billion for the third quarter ended September 30, 2017 compared with $8.9 billion a year ago. For the current quarter, net income applicable to Morgan Stanley was $1.8 billion, or $0.93 per diluted share, compared with net income of $1.6 billion, or $0.81 per diluted share, for the same period a year ago.

 

Compensation expense of $4.2 billion increased from $4.1 billion a year ago driven by higher revenues, while maintaining a disciplined compensation expense approach. Non-compensation expenses of $2.5 billion increased from $2.4 billion a year ago principally on higher volume driven expenses. The Firm’s expense efficiency ratio for the current quarter was 73%.4

 

The effective tax rate for the current quarter of 28.1% reflects the impact of a recurring-type of discrete tax benefit of $11 million related to employee share-based payments and other net discrete tax benefits of $83 million primarily resulting from the remeasurement of certain deferred taxes.

 

The annualized return on average common equity was 9.6 percent in the current quarter and 9.8 percent for the first nine months of 2017

• Institutional Securities net revenues were $4.4 billion reflecting strong advisory results and solid performance in underwriting and sales and trading.

• Wealth Management net revenues were $4.2 billion and pre-tax margin was 26.5%.2 Fee-based asset flows for the quarter were $15.8 billion.

• Investment Management net revenues were $675 million with assets under management of $447 billion.