Morgan Stanley (MS) 19 Apr 232023 Q1 Earnings call transcript

Good morning. On behalf of Morgan Stanley, I will begin the call with the following disclaimer. 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. notices the statements earnings our that non-GAAP to in appear release. refer regarding and forward-looking measures Please This presentation may our consent. not be duplicated or reproduced without

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

everyone morning, and joining for Good us. you thank

billion. flows a XX.X%. very over back an while XXXX not ways, for At strength Stanley income $XXX we billion ROTCE $X.X the stability $X $XX.X bought was show of Firm Morgan billion, quarter and the same model. Stanley. CET our time, results of strong and of of eventful for stock net billion, was to business the net first excellent industry, it eventful XX% In new The maintaining with test to Morgan delivered of of opportunity ratio many but our so revenues asset and of of

on of the not comparable that consider $XX to just solution may on some the In are XXXX. believe intervention view, both we uninsured touch line me the banking damage. current an we deposit remotely strong large led the banks. pleased the with sides had to Let First issues of Morgan billion a became but I is was the sector. briefly along of part I crisis to Atlantic Stanley, Republic other cauterization turmoil regulatory among my have banks, crisis, a have in the U.S. the not I and of banking still by and Bank. providing

later part it’s here as days was indeed of part problem, the of the lived XXXX as darkest solution. years where seen Someone be who rewarding XX to Stanley through of the Morgan

This In the our result, performance the the a Management, model with overall from strong company, flight our were X very together in long-term good increases X liquidity every quality. outflows moderated Wealth own was environment. NII versus positive gives impacted reflect trillion business impact years and the modest of start us to Parametric reserves, to in obviously continued benefited in a Wealth strong, the of we of product. flows billion to the of the back $XXX in Turning results reflected business while Overall strength slightly credit the Investment and and lower ongoing XX%, also by was the management forecast diversification as also in expenses. growth margin Management growth integration target. saw

on an very focus to continue the remain expense control ISG, towards management. subdued. We our eye In M&A within with underwriting and levers

are said, full and a a signs Already, As issuance largely delayed, have pipeline year said new emerging. and story. XXXX are dead. it these revenues we not seeing back half remains spring-like previously, I growing That M&A of some XXXX

well teams very in markets remain the equity fixed through positive trading moves. and solid. several historic choppy income our trading earnings performed rate this On managing next and expect months. for Total the to season the through were some revenues side, I

in most opportunities growth I to platforms. XXXX note we Morgan across is all positioned ahead years on However, on areas. surprise any not or as just down three progress our see absent think a but limited well is for for client bringing Stanley of significant very likely end XXXX, inflation, several constructive geopolitical

I will now to first on pass more quarter. it the Sharon for over details

navigating our and consolidation equity resilient billion wealth demonstrated business and model, in supported levels. our results institutional evidenced asset ROTCE, while volatile our robust firm’s was $X.XX, and XX.X%. EPS morning. In capital liquidity and by the securities, good and fixed stable ROTCE first produced durability of the markets. quarter, income clients our was and revenues you, The Thank our firm $XX.X of the The

diversify marketing from firm’s our impacted the net efficiency points. the showcased firm’s by efficiency benefit ratio made compensation plans and higher prior Ongoing to technology development XX management basis continued of expenses billion we to increased offerings. new and ratio year. investments approximately cash-based business first was litigation Deferred Wealth as and XX%. The versus investment costs $XXX assets quarter our have Management operational negatively investments well as

the the environment, priority, continue Given expense a our prioritize although management and remains broader we market uncertainty to goals. in investments inflationary long-term

of an perspective, helped delivered intermediate results equity were Japan the China of Securities its policy fixed through period to and areas the revenues partially From markets and banking equity Fixed with offset Institutional in very reopening. we aided third strong in from income Now weakness by businesses. income quarter our billion, heightened the the this Asia regional $X.X both clients strength dynamics XX% year. uncertainty. prior highest in a decline ever as and

decreased year billion, prior Revenues advisory to the were revenues and versus back in of XXXX. $XXX Advisory results transactions. down ongoing benefiting previously announced supported lower pressure market $X.X revenues while strong continued Banking solid on Investment volatility non-investment underwriting. of were from volumes the year-over-year revenue completion announced equity the in grade to million,

Equity underwriting IPO XX%, as revenues of a depressed result down were $XXX largely activity. million,

engaged sponsors follow-on navigate uncertain muted, opportunities backdrop income look we backlog banking and and Results $XXX loan help were grade to access supported IPO investment million. continue our as an remained selectively revenues for activity Financial were opportunistic building. issuers and an invest. to market by investment underwriting While Fixed them activity. Clients is market open windows. are

Within the underwriting, activity constructive we issuance by are encouraged windows. during

macroeconomic stable Equity to conversion on clarity conditions, volatile uncertain is course, quarter were Of confidence. corporate against and increased revenues $X.X pipeline backdrop. from billion, a solid markets predicated realized and financing an further around

compared the and business quarter Cash global on leader volumes. a revenues challenging clients our solid versus be strong markets. and prior a global the year we as to lower we results navigate to Derivatives continue last – were decreased footprint. help first diversified results reflect help navigate this quarter in We as

$X.X billion down by impacted the elevated of balances the were of which levels revenues and Clients increased rate strong, declined. versus hiking in start market a year’s revenues result, the steadily engaged of the though Fixed brokerage were beginning quarter. lower Ukraine. Prime the was as income Fed remained war cycle throughout equity prior and

revenues driven foreign and rates created global aided were modestly in was strength Macro regions. supported policy expectations with credit. relative by prior the rates up performance central by year-over-year volatility bank The client exchange varying across results quarter’s engagement. This period. Micro year, the around versus versus comparison in were down results by

activity and year, driven largely meaningfully by the weather to first moderated in $XXX revenues due U.S. mild higher European Commodity DCP. prior versus in lending gains Other revenues to related on the previous million results revenues compared largely the volatility the to robust reduced markets the in of quarter and improved corporate

were million ISG credit increased net and on In provisions, to for allowance increase and provisions by lending ISG to our of ISG The a all charge-offs billion. were Turning driven loans in estate. The substantially recessionary provisions $XX higher probability were and $XXX $X.X handful specific losses the real million. quarter, commercial worsening charge-offs lending and from for was the loans. commitments outlook

profit in execute with Turning Net $XXX in billion impact revenues inclusive positively and line expenses standout offset to $X.X $X.X million approximately billion. The quarter. as $XXX quarter higher integration-related by in by to was business, as impacted an $XX including increase on of XX.X%. to million, was expenses revenues $XXX year’s asset those in Movements to expenses. invest Management, continue margin impacted a revenue first continue credit Pre-tax DCP were Wealth was last million reflects the were the provisions new in negative of growth long-term favorable provisions were and compared strategy. the billion our PBT nearly we our Credit we margin mix our integration-related a $XX and of that million, more revenue expectations. for a

for remain XX% annualized period quarter, representing $XXX assets. growth assets new drivers very Net growth strong rate of robust. a at Forward were the billion beginning

While attract channel, over March results be environment the year a rate be adviser our lumpy with The at in looked and assets amongst ability in contribution notable and We year led of interest last advisers assets all the same time, Clients payoff $XXX NNA particularly and billion. will rising investments events existing saw to illustrate to help the growth. worked by the We the on to strength quarter to At within channels our full in allocation support from clients. as cash basis, the funds such our treasuries the Morgan Stanley and with increased U.S. to impacted stayed markets. client volatile year. money market investable believe deposits declined X% by the versus navigate XX% clients past behavior. their equivalents over should as

cycle, XX% equivalents at believe stand the more in adviser-led of are approximately down in Stanley given peak positioning of to reinvest outlook a time, more assets our them assets we XX%. Today, when market provide historical cash invest with to across road. In choosing to reinvestment compared broad these the balances clients Morgan through Over improves. clients average interim, and offerings, us choices will the cash the cash with invested product

Net interest balances. reflect billion, interest $XX income impact lower up flows $X.X XX% year-over-year. were sweep was of Fee-based billion the strong. and rates higher of Results

revenues X% reflecting billion, million. revenues down $XXX were versus $X.X year, levels. market management last were Asset lower Transactional

Excluding were beginning activity to opportunities to and fewer compared issuance XX% levels revenues the reduced new last down impact of the of XXXX. DCP, versus due year

led the Lending reflecting to in interest balances declined by this rate billion, pay-downs environment. $XXX quarter lending, higher securities-based

versus approximate workplace $XX Adviser-led is this flows, XX% have the billion this past over to also we reached working years. flows we annually Furthermore, and alone, adviser-led. what are year held consistent X from billion double away, almost seeing in migration with time this last and of our strategy to historically. these channel we quarter Importantly, from from workplace compares originating relationships $XX seen assets saw the were

clients in firm’s serve reach client our $XX the to remains assets. to in place trillion strategy support best Our path and

billion year. rate in net and $X.X $X.X outflows income, AUM due equity as at the the to over Investment fixed loans outflows were the high yield cumulative markets. declined quarter. ended revenues Total emerging asset outflows $X.X by decline the primarily trillion. floating In Management, prior year-over-year, AUM of partially to values Moving moderated and billion in lower offset X% effect of on Long-term were outflows of

Parametric’s strength, by well for demand delivered portfolios inflows as solutions and alternatives private Finally, customized into mostly as income fixed credit. driven

to Liquidity billion by outflows services liquidity $XX.X relationship. Positive inflows client inflows had of billion. $XX single and a partially were overlay related of offset

liquidity fee fees diversity related were Results average portfolio, supported to the offset and $X.X gains alternatives revenue. and Performance-based were reflecting billion by other platform. our partially prior higher the management Asset million. to $XX in due lower of the income by versus private revenues AUM, year decreased

global Integration-related fixed quarter income expenses Eaton and were team. particularly internationally, our $XX focus key the line Vance we from momentum in in remains capabilities maximizing see distribution continue A to area million the with expectations.

to serve active Our including to customization of as strategies benefit capabilities, investments global alternatives and diversification as ETFs, base. our across and array well the a us Parametric position client well from broad

Turning to were the balance with sheet, in trillion, prior $X.X line largely assets the quarter. spot

CETX with standardized and client Our XX.X% on consistent RWAs Standardized primarily at seasonal patterns. ratio SLR quarter-over-quarter, stands X.X%. at increased activity,

to continue return including $X.X common deliver on billion to We capital our our buying stock. to back commitment of shareholders,

quarter. place in takes Our tax rate of share-based the first benefit. a XX.X% was majority tax conversion the The for creating award vast quarter,

tax We quarter-to-quarter will continue full our some expect XX%, to year volatility. approximately which exhibit rate to be

is As March indicative industry during in James global financial the discussed, that faced the stress the fallout the resulting of systemic the crisis. events from not

outlook consistent year and allowed difficult for is this enter The environment positioned. clear strategy this predict. the of us remainder to well Our to

supporting interim, are we are our integral aiding confidence functioning stability economic clients remain and that opening aware assets on the forward. markets moving We in and focused attracting to platform. and In our keenly

we the line up to will questions. now open that, With

Thank first from question [Operator Daniel Jefferies. from take your Instructions] you. We’ll Fannon

morning. Good Thanks.

how positioned talk think thinking of you you high, can in banks, regional about environment that environment. the and how adviser given maybe and ago? is the but about about opportunity, I are the some talk with the about say Maybe year some retention of current as assume versus the a recruitment, fallout differentiates opportunity, the Just you

healthy. recruiting Certainly. The adviser pipeline remains

continue new to compare new a adviser-led workplace ago, not to a away existing that advisers, continue of see assets clients. but obviously, as we think also it from we that only and new and year stated, destination to for the net when I mentioned, assets see aggregate from continue recruiting, we we what is from both the from remain that and assets in We I choice, to held as aggregated both all we channels,

year, dynamics about and should you rate mentioned a that how you as just a where given think the think the talk And about then NII current And environment? trends about expansion generally in can last you we we versus probably some with to this of maybe challenged you more you environment? as deposit NII, specifically, margin management think were little this follow-up, as as the year do wealth how well

let’s NII. take first, So

we in itself what we we probably the we different behavior. as at client client Obviously, But expected is we As we expansion other not when of NII forward. looking March than it ahead, the said, about quarter. modeled have terms within thinking behavior for quarterly would currently a have expecting are been modeled had of we look months go

to by the to margin, also as model go certain is forward. that we a we we relates expenses. – impacted XX% also really as margin, the as and We go mentioned in Now invest have things, obviously, we as as litigation such and still continue integration-related

progress to to achieve the to we XX% goals. being we All goal set that and through continue we forth those move of that said still time will as have are eyes our on

from will Glenn next We Schorr from Evercore. hear

Hello. that interesting If a up you from normalizing is conversation. of sitting that bunch. we could and cash were down we weave also up cash that follow-up just mentioned XX% time, X% and Maybe cost Thanks. but deposits funds XX% on of into stat in curious, I’m equivalents, historically. over

through behavior and of get go with seeking, is, have migration you we come back that to can while the my same deposits time, question happening? the component all I the leaking into at anticipate – can cash cash yield continue the guess, and range margin be As the like year, down that normalization ramble we is yield-seeking these to continues do

very what be. if will Obviously, it, the that higher historically. we I think cash and seen right But ever a equivalents thing in what about think us in as behavior of highlighting parse than is your exactly for I a Glenn, level happened the we level, that’s beginning question, think to to predict cash now, at a you’re difficult I what out predict. are March, very have So higher

into levels ability rise. As of will we will to begin asset obviously see us different that you types be It accretive. those as be advice deployed that products help assets also see and

So things. factor there as is a think pull/push those about you

In addition more that will see, that the assets more see what we continue that, you assets, balances, from as will aggregate as gain probably we will think scale, we more to the we in about to platform. just help the mean we of what wealth the more gain And cash are addition balances to being for longer that, and more for in are broadly management margin the assets attracted the objectives broadly. will business might for because that the

a is I the slightly platform – is of had pretty that will be which just frankly, been math to asset the margin If net have new simple done I higher chest could reserves. add I We XX%. the XX% and in Obviously, a absorbing on aggressively this We’ve growth investing business and, from think, cold. take the year. some million. stuff about $XXX the still of business prudent we’re excuse my organic to integration relating is to voice, $XXX that payoff Glenn, billion, appropriately, the XX%

long, any to building. sustain the So I’ll the assets that take day

have source couple a points. next not, you’ll And those of as year push lot get certainly that margin few to at frankly, great through see me of a probably levers anxiety That’s year. percent this a of So I us and of point. to we this push yes, a think we levers around

want new here. We starting I million, pretty for – all The have we is $XXX $XXX This money. to years X good net is, think think growth. is, trade-off to every I visibility million, million $XXX with is whatever real. a guess. the And it off XXX year, target a we tree see for real So in window I keep trillion investing $XX

get So of integration balance. this as some as completed, we it’s it’s through those costs finally roll But off. a

a get business. know team on will We focused in little in that. already management his the wealth and I tighter the are expense Andy

rates depending So then be will go – on to it’s deposit it’s – the of to the be and kind Fed stuff does. going what and going where what

we Appreciate took like details do Can keeps do exposure there how is us What to my I’m sure within on that. help dimensionalize question. get provision that have commercial that this could help fixing have? just that is a portfolio? you you estate. I comfortable And giving, get The And Thanks. simpler us? for you you on that the going just the follow-up real thank

Absolutely.

important the that last the course I diversified, think so. we portfolio CRE that what’s about portfolio over it or is is year the have the in that, been direct to reducing addition in of ISG exposure

we it. obviously, our keep eyes So on

As you a know, CECL life-of-loan is concept.

And market. see the do that. same deterioration, in estate for And we’re you you what for account as commercial seeing goes so need to the economic real

So two continuing and we that reduce been would I points it point direct main is exposure. are I the you is think to that those that have diversified, to

will Bank next from Poonawala America. We Ebrahim from of hear

comment just year XXXX expecting morning. question, wondering was think terms note. in do on constructive tied wanted of we paying be you first off to you Good to it I about I of guess ending Fed’s can a being markets? where on of – against the you a I How lot ends? that terms XXXX, economy about think the follow-up, the is think elaborate to just the James, you if macro. these we on where fronts the this a fight inflation economy end And think to made in by will you all do damage in do does time as the

they support for started about markets where they beginning the the Well, certainly that. at of flat went call the our out from and house year,

moments this tension global are and two while I remains we my remain there U.S.-China that stable. is handicap overall really trade geopolitical the out gut risk, year the through which stable can’t wildcards having think relations the

evidence is that bring it is they down inflation, so the course, but are far actions probably is of inflation. down the Fed’s risk, not done. bringing second Well, doesn’t The

I of if type got dodged you it it’s X%, is, don’t whether least rates, possibly we for shocking. recession, sort get that, I we X% it’s modest and people might through more again, is bullet. at gets be, recession a modest but two likely not high rate are calling And that know, will obviously, we interest a think That more see one to increases. which many or

if Sort are matter it really to matter much. is go of than What tamed, has doesn’t people higher much is not would that inflation expecting.

outcome it’s likely recession into a at point. not a You deeper much go certainly this

So think the used I I I that’s words constructive. why said

Stanley, shoots to we Committee see. they starting yesterday bit sort we’re the certainly Risk don’t if QX-type little next and back stuff green just through Again, back event the like banking I underwriting but a had year Morgan in of of the a of and looks think year and underwriting, picking are some For the year. calendar, the it the it’s discussed a Global of up half half

cash wealth active security I They what this people think the like investments, not pointed of quarter real. long in moving management, the think happen. a money just that is XX% I their mean in through business hold is to, will it Sharon the of cash. into don’t history

once cuts this do I in my be XXXX. pass gut Fed So – be there suspect I not this starting expect rate we pause that and will would sort some of by action, year. long followed a inflation

surprisingly relative the geopolitical inflation surge what benign it landlord, So given I periods given feels actually have from to been. given sort other of it stuff, that I’ve could given been the it all COVID, think feels through together, it the my I when career, put

Now frankly are the banks idiosyncratic parts There on going are risk, that some commercial that’s rate that match the banking the those estate clear world real sector, still interest with were in I duration of of didn’t what’s well, slow across is issues. growth. just about there asked Glenn think that having portfolios are not very stresses, denying

what you out we’re a of Stanley I song, it’s And of remains perfect not kind and the get So Morgan get think kind can’t you coming of this, we always what rolling about but need. on you need. getting what want you

CETX. XX% We’re getting a

well XX% a to I and getting take a obviously, revenue, out opportunity We’re decent think go-forward earnings, very basis. positioned decent costs on ROTCE some

came constructive from. So that’s where the word

it’s long answer Sorry, for one word. a

the capital do think any macro for And look of follow-up, appreciate as uncertainty, color. perspective just we creating And terms I there? as as when just forward? buybacks, No. of you given opportunistically, a M&A-wise return the we opportunities see in pace one, this Morgan inorganically about Stanley the

We’ve now the of with what maintained is are and good excess the what deal a it’s capital I’ll for question. capital. – very opportunities sort position

at On control the to XX.X%. capital large have over that position running now, obviously a dial extent. is CETX We

we – have So tilted and conservative.

sure we’ve way say. above haven’t all pretty numbers, at I’m I top of while. for been the the or fair and we’re set seen a all think to our that quite it’s competitors I again, but

somewhere there. with I requirements capital current we’re around test, on stress or XX.X%, So the last at think XX%,

we’ve So a test very stress buffer. XX% is healthy coming out. a got new But

last many to might little feel of plenty a that’s be, It and year. people going for than what tougher So capital be got was obviously it it. we’ve

May, expect we issues sort June and looks will XXXX – where probably be that late implemented again, whatsoever. don’t And I like any period that I then in, earliest. out have time III So of Basel think, coming

is there time adjust the position. again, banks to their capital for So

it it’s I how but as So X. visibility to I changes in have to sheet, July think – say, anything again, some we by, might – much our involve I balance we suspect will draconian. drive what I we’re don’t particularly with don’t going dealing And better run

like that, a buffer. given maintain to Now healthy we

a very really when of performance a the Eaton We spades. businesses. We’ve robust dividend see both those I we which that have happy deals healthy be said even of yield. done, the And and so obviously, the couldn’t with the you’ll market the E-Trade of environment, couple deals pricing Vance, last those deals, in and I years, in see we the just had did more more timing of

in a than And back. mean paying stock, like that the we’re out dividend. and a and buyback We dividend. I over of buying making said the now. more we’re that I we’re believe clearly for churn, think dove it’s think I’ve in X.X% business we little down I a management bit. is dividend money the something wealth years, business

running at I basis. of two think year $X.X interesting biggest to that environment. the had billion, mean, peak $X.X – the in on an did last it years. just fail I just we’re say probably last we banks billion our And at let’s quarterly XX was you a

conservative, on, little want that a to you attitude. going little my a don’t be being grabby prudent watching too is So

So we I be think we There the and fit. in wealth we we no over who’s have will doubt is is attractive constantly a whatsoever. the doubt flexibility. of good more lots can my no space There about that who and of mind. a do years, acquisitions management will asset in And keep list and would it and be

is if I there obviously, But nothing it’s but say but something something we on. was there imminent, focus couldn’t imminent,

So this It morning. got. cold again, I’m be long must I’ve this sorry, giving answers that I’m

Chubak We from Research. will Wolfe to move Steven next

Hi, good morning.

see much as attriting to result. So unpacking understand for a The off brokerage. advisers? quarterly flows an I wanted quarter. fee-based as of impressive where the start And better clearly mean were to a some sustainable evaluate that durability continue what I XX%, how to try we is fee-based just you inflows just to XX% NNA destination flow you in the And you’re of just really wanted the of lows lag from saw choice of those FRC the rate.

and try Steve, all to going I’m in of order. your questions, remember

forget So me. remind just if one, I

first take on The point FRC, first. I’ll

the relationship mentioned without in regionals. came I in believe that any remarks, terms $XX to those I broadly, we In as more about had billion prepared regionals, of the

average shows that seen. that to cases that’s so above And you well the we’ve

show think are I continues the So that just made move investments working we have we it really that forward. as to

number So that’s sort point of one.

in I coming what that asked that and point diligence think those was particular was It’s where from To accounts assets space was in I quarter and clients. existing we’re from? through most clients. really adviser-led really both seeing when remarkable – materials are mentioned, what was the going second from you I The this new me,

speak held that all So choice course move the attracting our or the idea give as about so more that destination again, over we’ve the and X to away, advisers clients a had existing the to assets to their investments of we conversations be time for all clients continue service forward. last our of to talking we years

Then are flow about honest, question you high. the fee-based equivalents the our asked individuals number, from it, in a actually to that be environment where flows cash fee-based an strong and think very final – around perspective cash we

of thinking and money you’re fee-based managed where for what about with kind putting think from associated unlikely You’re might you’re concept, do the it cash period now. in looking you accounts right into equivalents your of cash be to that safety that time and a

that fact, in is, into that so that could have the And time powder assets. dry we fee-based over move the

So I environment the number that it’s the given on a think strong backdrop. actually have we

cash been within advisory you with deposit think are helpful have CAT support for shift so my a or where sweep could And follow-up, the sweep level – hoping you seen how deposits, historically any Sharon. pressures can on April on for could give potentially into was I and space perspective we continued about broadly. some below color, transactional in Really far? sweep mix just That’s those now running X% strong AUM. of bottom

of that that And questions to that what As earlier bit did really a client I we client behavior. the one in some modeled little it modeled talked deviated of April, behavior. in from relates March, see about is we

client April, line we behavior. with in in have more Now modeled been

of environment. speak in is does uncertain from that position a point there. are James a where said, it an But to maybe again, your So as level, transactional patch we are we

see will that through time to have perspective, we and from here. wait from move so And we how

Moving next to Brennan Hawken from UBS.

last follow-up question Good on from that Steven. morning. have actually Thanks taking I’d for questions. to my

is a payment So which tax typically modeled April is month, more April a is headwind.

Are deposit cost relief? to biased cost not where elevation seeing provide is the but both know So more when are about to we of And that – Could NII that the going all some higher that funding some we higher you sweep funding Is thinking about maybe mix the some sources? be coming and it stable think taxes other seeing forward, tax growing, you put and this NII payments cash out cost? of from? funded into – downside. we should it’s lead could the getting

about So thinking how should we curious be that.

something where terms where from, from that the as perspective of is there because think in from of of could, your deposits terms breakdown of that you cash coming is more a I it’s parse and it’s different terms is fungible, what’s take see April or question out, different in it season. is a challenging is in important, coming I all the to do tax exact is exactly security into asset. it so think that as move know, challenging. you that could highlight, To you then

to one an see client the optimistic obviously of so And more are acceleration through that model you moving more is signs not behavior.

means perspective, funding funding, obviously function mentioned, places. what many from Now I things, from matter of two don’t it will think as it concern, a different does you funding but NII is an Brennan. have be that we it

know, you expectations changed As rate since January. also have

and where and is NII client for terms are cash, where are our forward And curve rates etcetera, the so predictions and sweep models Fed forecast also of based bonds. on behavior interest in

your to begin see NII that forecast. you that as changes, if so And could change

sensitive. asset if still, We client behavior, you at are look models

on different terms pieces that based about of in together so to the you how think I that And gives a assumptions. look from to perspective, forward few put think deferred

component. you’ve Thanks granular any cash promotional offer the cash the guys the much. new alternatives. obviously net actually stays system. – promotion new what how have Thanks. that it stays statistics is money from It’s of percentage good a for so offer have assets In of What lot that but hot bring on you one very yielding how you and spoken more comes and when to quarter? into asset when on higher that of kind of – think uncertainty, Okay. Do portion about in this majority And it’s the system? then of appreciate and the curious the it stickiness is you that about in much more color. tied an durable? how in came system, much net that past, Sharon, into we Obviously, a I

going actually broadly. see to NNA system would net the right, So the to more about the best be you’re outflows NNA way a stickiness the to the think negative because within is

the early you back, so was we consistent I net In still think saw remember in spoke time, seeing and levels new asset growth was those years, inflows back this ‘XX we and about when that ‘XX if way it the it And time. look even ‘XX. at to over I promotional all over

the to So, be continues positive for me, most net, net thing is, to what’s and higher. the the ramp continues important well,

important begin over assets exact that is considered and In would that it’s firm. here from people more terms if seed more the CD migration again, it’s advisor-led of space. when what’s that outside we to think out mean see brought continue the see from the money what from NNA workplace And time, in again, money And space. of here the is held offerings that advisor-led about to away. important What’s advisor-led, channel actually from the into we into NNA,

an people advisor, to I begin then your held that to of building. is from but work highlight, question said with the you it’s the to outside as answer away doesn’t come what assets XX% are that we So, know directly, assets important think I

they another aggregate into once just it what that system. proof again, assets the point helps to understand our advisor offer, So, has new

Markets. with from RBC Capital We next will Gerard Cassidy hear

money back more course. that Thank you. fall around talked or to of of assets basis I cash move What share customers’ or XXX meaning Sharon, do cash rate do when are which in you XXX think Good high, into Wealth you James us, Management guys rates you at traditional is for morning. guys basis with about, sense, assets? XX% equivalents, the said points interest can your points

it’s So, different in rate it will actually answer two that I the the ways. don’t know value – level. absolute I And

read that to people the most March U.S. that asset, have we mean, I treasuries. events in remember – most risk-free you popular the make begin all didn’t a what about and to being the think First, press is individuals

be assets So, they surprised one should if treasuries. to begin U.S. move not into

where are I interest So, uncertainty rates or aren’t. the level of and it’s think also not that do a of absolute function just

activity August, further you markets activity And become I when was think about and as begin the activities, in by February asset as and you and when calm said, Wealth in both that then for our October January earlier have that ISG classes movements about as last the and evidenced when individual opportunistic, that so well. Now, that Management. moments channel are and have you corporate these into see think both to we last evidenced then self-directed

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total in And Of there mortgages? I question, into the the that. portfolio? a provision linking of are estate. that portfolio, Thank percentage what the just then is credit, appreciate as you. real commercial that real construction commercial follow-up And talked you loans about Sharon, in any and estate loan

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Devin Securities. Ryan JMP from

maybe on want here. to Thank morning. start just accelerating opportunities just are you. Good that market share I

just of capital stress committing in some on banking scarce when on paid where the one even the call, are touched becoming for the going your peers highlighted or system. but is your your the on of You potentially private you just to capital some banking opportunities more more of get heels Europe, in

last love just think maybe sustained going to might month about things are forward. you some that just or So, the of be over so the that seeing

On in Europe. capital opportunities,

what’s Sorry, the question? could you repeat

in question kind The of just Yes. is market where there banking of is take to the the turmoil. wake share opportunities

whether So, the recent one just here, private the just is had as But of well others stress? on Europe heels in example. peer one highlighted as there banking

let banking capital We Europe. in go probably the because me have do that Yes. for a that we have where at Devin, builds discussion and invest. off not would an appetite private

because we money you And kind view of and XX lose out Private things fact, it. Bank one did, to lost years we that It’s Suisse Credit to sold if our years, for years Europe first got had experience. years, probably business would We of unhappy an had them. In several I simple I years lose ago. for took a you of fairly XX XX the in of owned we XX the have

and an a more current U.S. trillion structure that in you business, management. that have trillion good the bring out, gathering monster. assets much need the some there many frankly, quarter and one it’s X Lat-Am. believe, a in the regulatory going scale. asset in so with got be fit $X the we aren’t under to To interested years, The operate $XXX it’s So, last in world under, and just over in U.S. Asia billion we companies And not I

else you So, stress, on it’s prize got We and in down to not is eye keep it’s down stress a here, some we in we maybe got a attractive somebody is inside somebody because else it. rabbit have very machine. what get rabbit and killer I the going here get think our distracted have not know when by because hole hole

than is are Asia the conversion some, a we harbor, guess somewhat industry. tracking that growing to annualized flows, from think traditional players, the we you seeing workplace basis, and but is organic our Lat-Am higher or our anybody the are higher a are industry. Obviously, competitors, opportunity financial Again, traditional In on. I now safe the them online flows, of I warehouses massive nicely. on in the if the significantly across organic our focused than brokers, an advisors compare

it, how think that’s not So, bit Lat-Am a about little again, more definitely U.S. interesting. and Europe interesting interesting, Asia interesting, we

it. Got

Okay. Thank you. Helpful.

touch better kind what trigger to do deals is the of to love like kind sell you specifically to momentum those and you sounds bit starting sponsor little are on what it follow-up, I them a further? with the is appetite engage to financial think Just – a kind see and just the clients. maybe assets of or maybe would point of to

same of we they may is are size, Board. a market. might of position different when They the at a mentioned Certainly, regulatory actually year, I different that which be position consider February And you conference in a where think sponsors, a faster spoke to than this because activity not M&A, when have i.e., have from about you restrictions. the are I might is traditional level what in financial you would they

first that also that and up. perspective, of remains have is kind open might we from be before so view – traditional what in the are expect the we they to the see that also we build, activity for as And that would And realized, really move we terms to the that’s In it’s that and markets of pipeline activity. about forward become order financing the of begins that really seeing. opening

backlogs some seen helpful. have clear, But and we As of about it’s about that’s very confidence. again, stabilization clearly it’s the

We Mike will move Wells from Fargo. next Mayo to

that in quarter is management Investment so an one-fourth. environment right the it going you best going what so third that like I have investment management was right if revenues it’s almost your ‘XX, Hi. going quarter, What so Asia first in closed is are since second And Vance, correctly. wrong in down this? what – Eaton quarter is full then

out one, like way But to like management? it wealth then panning well. But the management, and out of investment just Asia what’s looks expected. shout not E*TRADE outside investment and the the Eaton was you certainly So, from Vance doing in the going the right first, positive on going right in the terms negative

Certainly.

Japan. engagement. the course – the that from built from was macro helped we in have what’s what’s And has an reopening, within going have what over a the income. we saw us of in obviously, What certainly So, the the Asia terms quarter also and such of business rate us where in China we the and interest Japan, on macro Asia supporting And environment first. perspective franchise been really side right perspective dynamics let’s fixed going equities from change, client within that as take

and together it is think important of speaks think will tie the I are global that about that two it diversification. global when and I Why able have very investment broadly that important to is is to to franchise. our the you invest you environment – that and that’s management, to an critical So, perspective, we create speaks more to be

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on You going management. levels down tremendously. asset what’s highlighted Well, are the investment within

that to you product be and have associated we of we alone, announced we to what That’s deal the time the see raised where at Look over activity. since build. Parametric, in of with trying Eaton diversification again, Vance. of a purchased there have in period billion product portfolio, However, and do diversification $XX are we

Yes. I render just frankly, Eaton wouldn’t the will deal. I yet Vance I judgment mean on add, a

a market of years And environment. we from Solium going have a E*TRADE and it. right. a little the with back And environment, holding And confident Smith to like Barney with very idea. are thrilled look that tell of think deal its to said people idea. in of highly a of lot overpaid foundations settle. lot that we said, now, business up, And challenging is It’s personally be would I things I challenging people is a moments house was I said soon will. it’s am a dumb you, think thrilled lot of dumb if a have people you good sort and these X a for am through I I settling,

in happy some I hopefully, think great want, you I So, say if you X that back the transaction, And am what’s very questions people, maybe will years’ reverse Mike, brands. going fabulous Eaton you won’t company, ask time, that But right great and with questions. about come in with management, have asset always am and that rolling what’s you am I yes, be wrong sure, pretty Because and some can’t given sense, the other working. I places. in going environment, you Vance as I what get relaxed something said one. But the might

answer. the appreciate I

not you and it, Just did, a like follow-up, you it have getting looks NII or want missed we are help here. models our any short if guide, I just some with

mean gone us industry. want have to in guide clearly, costs of direction, in certain If funding the I kind a up you

sort of I plus I first and We super mean which just than hard. guess X%, blunt. better be growth came I the a in will little guided in quarter higher hard. most, super but was on

get through let’s through think get quarter. – So, I this let’s

modeling, And are lot learn which of as said, what will have a to we good. back of numbers reverted it’s is kind We the Sharon taxes.

that. We see will

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whether super further I mean see deposit will not. We guide there it’s right just is now. hard outflows to or

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O’Connor Deutsche We next move to will Matt from Bank.

very you and from an volatility, of on same but the ago revenues. morning. good, a advisory income Good strong DCM sluggish. year talk benefited Obviously, Can fixed really at strong the time, basis, about trading rate from the level was sustainability and absolute down

in in but next this about the quarters just do Thanks. kind we that how maybe the and of not several IB? XQ, of are you in think environment So, kind some improvement

business done. our – the So, has

velocity this on transforming assets, management has job clients. model supporting think really business focused done client-centric a a I in focused on phenomenal be of to our

gotten grow deeper XX% wallet we number. that, around have be into have able our been to have the in to the So, able more broadly we been more and this we and share

based have the So, activity that’s that clearly we seen. on

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committing both basis, kind speaking, your broadly not fix Okay. from on you as change? in or terms about brokerage less client maybe just providing like And thought in like of equity, there or think here and what’s of an capital like more then any really incremental

broadly. more We continued that to invest in business

see that even side. on the can You technology

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for We risk-adjusted obviously there in the have are support continue looking clients. we to that invest return been our appropriate as business. And we to

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grow So, aggressively we pretty on use we our and position about All businesses. of have weaker. in the asset options management much gets stronger, not terms want good balance wealth we margin that said, are simply because careful to how sheet to

quarter. balancing they quarter, the So, really done about good a it’s this tricky rates. particularly job, the act, the has great think feel and I team but in by where way, a landed I plane

next We from will hear from Jeremy Sigee BNP.

Thank you.

us well? year, comp you mentioned the of management. that deferred I performance. bit heavy thought something stays for a specific that and it a with specific, year move costs in were linked And XQ a to Just that is wealth quite one actually. heavier as in the the investment stuck deferred plans – cost? around? throughout Is or comp with comp it the that us Is or that does is rest Is investment

you remember, the moves investments. that with as Jeremy, around

line. both see the will You line and expense the on revenue

look both that move the both ratio, understand sides, should you comp the both them why we and them that’s forward. and and at have enhanced margin can you we together, about so as disclosure And from the so historically think

That’s perfect. Thank you.

time. Ladies for you at Thank this concludes everyone participating. There questions are no gentlemen, this and further today’s conference.

disconnect. now may You