Morgan Stanley (MS) 16 Oct 242024 Q3 Earnings call transcript

Good morning. Welcome to Morgan Stanley's Third Quarter 2024 Earnings Call. On behalf of Morgan Stanley, I will begin the call with the following information and disclaimers. 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.

forward-looking may are differ cause include and to materially. may that uncertainties actual presentation statements subject that risks Today's results to in Morgan the undertake not this statements Stanley discussion. to does forward-looking update notices regarding the in Please refer release. to forward-looking and that earnings non-GAAP statements appear measures our may presentation duplicated without our or This reproduced be consent. not

turn the now Chief will over to Executive Officer, I call Ted Pick.

tangible and leverage. $X.XX, strong and XX%. billion you the tangible. to of billion reflect third across XX.X% demonstrate our Stanley firm's performance: delivered revenues, Good the of of on In results $X.XX ability quarter, and businesses consistent $X billion, $XX income of us. quarterly morning, operating revenues for and The on Year-to-date $XX.X $X.XX EPS joining top a reflect and thank return line sequential net of generate returns Morgan results growth year-to-date

advance the invest growth. to firm, strategic Across continuing we goals while in toward our

year, on in $XXX delivering organic are we asset achieved It's road last the have across unique reached billion leveraging up Investment Management our first months, assets on the and noting client Total worth trillion. client and We over Through growth. Wealth that assets almost $X.X Wealth trillion $X.X and X now to by scale of Investment are $XX the trillion. aggregation total platform Management.

across helped economic our seamlessly Day gains Our working Labor breadth strategic of policy investments volatility the clients across X through global summer bank institutional navigate against evident franchise. through as team in The post are the share integrated uncertainty. investment regions depth and our reflected we and was and all

ratio by leverage points XXX the with approximately whole, integrated achieving to a firm XX%. our year-to-date operating efficiency improving As basis is

infrastructure while invest We continuing priorities. to and thoughtfully have achieved business across this

strong opportunities Institutional and a And Strong Stanley's in advice. speak seeking fee-based to engaged. flows are are different Wealth capture we and in to individual clients performance Institutional Morgan condition positioned market against backdrops. Securities well clients

interest financial among for Investment markets increasing constructive favorable with broadening support combined a A markets sponsors policy participation outlook. businesses. Banking evolving across backdrops and underwriting Improved rate and are corporates market our equity

strategies Continued individual client Management. our focus tailwind for tax business Investment on parametric inside are a customization

striking with on we Now against. that we execute will are XXXX of cadence the a board, X quarters

Our the strategy, Morgan individuals. and and raise, Stanley's X across team institutions is financial for manage unified strength of is allocate culture, pillars strategy capital growth. and to

We strategy with execute will a of on continue and of with And levels growth durable a Morgan to our of will liquidity, to a and integrated firm. humility plan rigor, high culture continue across Stanley execute partnership. capital on

now Nice Sharon through us quarter. will take the job, SY.

Thank you, the quarter. The morning. good in of firm revenues billion third and produced $XX.X

while $X.XX, in strengths and inherent ROTCE driving revenues the our of was quarter ability show also and to EPS our Our grow our third profitability. the XX.X%. model business was Results

was The firm's XX%. ratio year-to-date efficiency

growth. revenue strong litigation leverage are this ongoing to real of controllable support gains our lower our consulting to addition growth, as infrastructure efficiency estate while spend. ongoing An year's to the review strong as well In result footprint contributed maintaining of operating disciplined spend and prioritization of

below Securities markets the Institutional Notwithstanding third a revenues businesses. were the billion. and equity quarter. underwriting to near-record historical Now remaining $X.X advisory represented revenues segment's averages,

relative U.S. global was end to bank. the reach the and of towards accelerated quarter and the scale our drove driven segment's the outside by the Activity averages. benefits Performance of historical investment the integrated of outperformance

capture to positioned us well share. footprint global Our

first the policy China's clients. including As around activity, expectations the world timing announced risk stimulus, shifting rate supported size and of monetary of Fed's the drove the we and cut around Japan's our events the Bank changes,

and by advisory continued strength pickup improvement aided year-over-year in in underwriting to revenues. Banking debt underwriting increased revenues a was Investment $X.X further by led The by billion. driven

EMEA. yielding are quarter our for the corporate investments activity year-over-year including the those in closed region. client from the events sponsor involving results. Advisory EMEA, million on and decade modestly $XXX in with financial in deals as in transactions completed Large well as strongest fee higher talent particular of a M&A improvements revenues quarter Steady relationships strength over in increased in sponsors, and supported

Equity were $XXX underwriting revenues million.

While global well market higher were IPOs historical remain notable a trend lines, volumes revenues by in and pickup Asia follow-ons. year-over-year of activity below with driven

activity year doubled versus as market. record quarter investment-grade strong a supported revenues both underwriting grade income and issuance, as non-investment were Fixed million. $XXX more in driven third refinancing volumes to than the the by prior event-driven by Results well

Pipelines are and healthy diverse.

Corporate And of recovery. is We continue only a desire to materializing, activity abroad. momentum. believe steadily sponsors we the capital gaining also among not transact stages domestically multiyear the early markets is but in are to

broader risks macroeconomic clients. to a While for well we the with integrated play, on the comprehensive cognizant focus deliver we positioned solutions global deliberate are at of are our firm

performance strong. bouts in Asia The Equity and clients. the navigated Americas as robust and business revenues nimble was were market $X of we supported at billion. volatility particular, remain In well

year, reflecting September. regions. in announced results trading in week historical reached as above balances were final with a with an improved once associated across Derivative revenues improved the in prior Cash brokerage new equity environment again volumes higher versus were activity stimulus averages coupled the higher by reflecting an driven the China's of also increase client peak Prime Asia up results client markets. year-over-year,

particularly as year. that rates, were effort periods commodities as clients in to well in a macro, by through global by solid in support and Asia stronger reflect largely EMEA Fixed Results in income were volatility. performance results the offset $X of revenues coordinated strength billion driven prior

of markets Micro results Results in business engagement as size revenues first prior volatility energy rates higher and navigated the markets. year-over-year. versus compared rate prior cut. year, the declined benefited the Macro the from in were roughly around to increased to shifting year, Fed's timing the flat attributed the which commodities elevated strong expectations well amidst client our

Net charge-offs and commercial and driven were outlook. loans. quarter, improved provisions by $XXX ISG the the estate ISG corporate portfolio $XX million by to lending offset in Turning partially provisions. an were growth, In real million

third Strength reflects a Management revenue Management. a highlighting record a the strong quarter, disciplined PBT, combination produced execution business of the $X.X Wealth Turning to In our markets of and in and constructive billion of operating strategy. record the model's Wealth leverage.

in value trillion. and power strong, assets flows Client advice. differentiated funnel the and of the Management Fee-based client demonstrating acquisition our of were Wealth reached $X scaled

Our multichannel our is model driving durable investments offering technology. in and expanded growth long-term benefiting continued from and profitability,

margin metrics. the points. XX on our Pretax In of the approximately impacted drove basis margin by XX.X%. business Moving DCP to $X.X billion profits quarter, the negatively to

$X.X and management the by up driven positive cumulative of XX% markets. revenues Asset higher flows were year-over-year fee-based billion, impact

are by an ongoing in income at last Fee-based of exceed alternative supported accounts. on accounts Fee-based robust billion. at quarter to assets diversifying $XX fixed trillion. and fee-based year, now to assets were are year-to-date flows fee-based pace $X.X include adviser-led contribution Clients accounts products. stand brokerage the from And flows to

to represents Net adviser-led assets new Net X% new beginning of in annualized billion, by notable contribution the assets clients and with assets in new which a channel. workplace the were new growth period quarter billion, net $XXX bringing our channels, from year-to-date $XX assets. supported were adviser-led

the results. higher client revenues XX% Transactional impact $X.X excluding supported were year-over-year. billion. Overall, of DCP, activity levels of up we're And

sequentially consecutive growth deposits by Loan to second Total driven $X the quarter billion $XXX increased was billion. for mortgages.

is seen signs particularly the -- While encouraging. stabilization, Fed stabilization, we've particularly average of were sweeps recent recent down rates. the began as slightly, This cutting

was Net billion. $X.X interest income

NII largely third quarter, ahead to be Looking expectations, fourth we results rate quarter from the lower the back expect modestly would the consistent down forward the on with curve. to of

more to million significant. touch We last than committed XX X.X as are front currently We of continuing to million opportunity relationships, the in execute us remains year.

range of expanded Our includes recently, net unique offering across robust products a alternative to and more access private services, for continues market attract high demand. market worth which broad clients

and in investing infrastructure clients. help serve are capital, an to advisers their unique our We our integrated intellectual products

year-over-year AUM. Investment fees, to higher driven management Management. X% Revenues compared Results prior the billion to increased year. increased which by higher average Turning related of asset and $X.X reflect X%

Long-term billion. approximately alternatives Inflows strategies. were our driven $X fixed primarily demand by and income were supported continued in net and were by further solutions flows

of Eaton consistent within strength. Since Vance solutions, a of portfolios customized alternatives the and source have acquisition been parametric

demand Management's Investment the education includes Wealth base. own retail with around Wealth This tax-efficient adviser partnership as our Management steady Management our broader as -- from product Our investments drive initiatives from clients multiyear capabilities. has well helped into on originating

strategies. infrastructure and in Liquidity had $X.X led our overlay billion parametric gains other by estate. of and income revenues supported and Performance-based inflows overlay real services Results million. $XX were

total trillion. now at AUM [indiscernible] $X.X stands

positive Our in by investments customization and are returns, long-term showing demonstrated flows quarter. alternatives this

We continue in secular in demand. global to products meet invest to client order growth

Total assets clients. X common Standardized sheet. $X trillion. sequentially to capital. to spot grew accreted Turning actively the supported as billion Tier $X.X of billion we approximately balance $XXX RWAs We to increased

Our standardized CETX ratio at stands XX.X%.

we and dividend, which $X.XXX stock deliver quarter. of this during to to continue quarter, million bought in our on We per we back to the the common quarter raised $XXX commitment

being hard as and diversified that Our serve on year-to-date benefiting the we growth. the executing opportunity from evidence global are in resources invest results to with set,

and progress we trillion and Wealth total toward we client reached $XX should growth Expanding as client $X.X Management, Across markets client increased of assets. support trillion further Investment asset in assets. engagement

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

our Wolfe [Operator We'll from take Instructions] first with Research. question Chubak Steven

question So leverage. on just with op start wanted off a to

been [indiscernible], the incremental that We're very Even delivering now the in margins. side Wealth, driving on margins. definitely team incremental more you're seeing noted has focused X% management You on the efficiency. ISG XX%

on just the given higher some of efficiency for side while sustainability the those continuing gauge cited of to the wanted Just you margins invest to some growth. efforts of marginal

noting Thank Certainly. and thank you you progress. the the for question, for

intention over but really long-term say shortsighted, focused -- we the think that efficiency. the about to course as And has it's to take We year. the this not been a not have very I'd be on lens rather been of

of outlook, we budget, to would this certain also make to that what but have to year understanding investments growth. began are room the for X- efficiencies not consolidate look investments really X in gain to about can be and just where where only order course the X-year Over we we but at in not revenues, spring,

that's because occupancy disclosures. one highlighted the very SEC notable I that's in

line lot also increased really optimization about of investments the And see year-to-date in that the of only space. of to a room course we've You'll space, $XX million. over invest item has basis, but the that of made

think and to you think think new You occupancy. be buildings, for centers, about about you about you used need technology think places new data new that

way a thinking is about there So we're self-funding. that

for a goes decline Same professional services. in

of gains. a years related could still were disclosing what basis about places many at on going from we were integration. Some were remember, an were basis, that And and augment to we looking long-term of was through there thought service thinking integration stopped that that we professional we while we we -- where

forward. going side we've investing space making been in places like the we have been about the you've that, we position we other a infrastructure We're supporting the of in growth increases think that also because clients. have BC&E On seen where in our as

just technology resilience, we're of and cyber for can to new business would the investing do space that as them assets, But us also clients, we're quarter. new new course expect net Some has prosecute which in give to the do grow that that products, our go you places FAs, to forward. with course, we looking you the see thing where going of at of new

you sure as on to that support broadly, like really growth, all you controls, basis. have it and about foundation I've make need think to And have risk go-forward able building that right, when the a and blocks you so you said, the the infrastructure, you're of

this it for budget in and business would as go we this is we multiyear years. forward multiple continue And looking Steve. but to process, been over sides, a at cycle, it and cycle do not we've that So just both

for in quick momentum strong especially very were a September. the quite follow-up board, across The business. third Wealth reflects KPIs clearly just on maybe quarter, in the And the a No. strong

what a to or if durable on the it that Just KPIs wanted see question nice understand there of sustainable that just as when in sweep the certainly strength. factors some drove type -- that begs any those of and some was surprise. to maybe Inevitably, growth might be better idiosyncratic which of focused you were especially momentum, how deposits,

Yes.

a seen certainly rates, as end in back began on the the strong, we've Fed quarter over that being all that the all trends basis cut I beginning underlying are Especially called expectations. Specifically as relative the -- since the encouraging. we deposit look KPIs to actually, out into of one of September and is say the terms I'd and the even of fourth sweeps

So that has positive. been

driver. really the all side there's NNA on the The underlying as one picking growth, on particular as fee-based of me you've well up. both seen assets, for rather, asset not But advice-based

didn't seen which investments you You've and from engage. to see clients a FAs sweeps, brokered monthly on into continues brokerage, from be year. There last level markets

improving. are say, to needless markets So the

momentum coming seeing new retail a is to the economy. platform both clients think are from which good clients, particularly the trend in advice to You're also are Uncertainties I as engaged seeking lifting. but watch. And

the Our from of America. next Ebrahim question Bank of comes Poonawala with line

first I just guess maybe priorities. question on capital

to Basel capital III capital excellent years us ratio history allocation, of about inorganic. I context for the we last of thinking more been the today how talk Just of importantly, or the you're in has think waiting terms are proposal. organic in the XX still But

love at world you're where Where you investment it it the created, As your are get capital? the market? wealth? to perspective. in deploying Is Is best in looking opportunities? international? Would it are Is

for question. the Thanks

As CETX. you is XX.X% XX.X%. know, The at we're number new

We operate. is like room basis XXX buffer buffer. to our points. So us that gives It

ratios XX% the some that we increase, asset had keep saw but You still to plus. we risk-weighted at manage

continue the businesses also lean financial to of into opportunity market best-in-class the and as capital So that to businesses. there's price clearly in did lines liquidity, which story but is along affords. We the a both strength here, to

spend in bank, Sharon across it we the Wealth some it gained saw in the share technology of described. that Management, the investment where saw and you markets But You businesses. also both primary

before, the would is given any what said and of grow at In wish do it. it's continue hierarchy moment allocation, we as around That to forced to first. sort capital sacrosanct, the we dividend of we

and of Management, so the there the are and equitization the Japan seeing to increasing continent. be cause a segments: we because just the in and here Investment of in growth investing Second Sharon do cycle, and in Wealth good Bank clearly world. as Management secular X like We're and places across where to all Investment rates the India is described, on

that's pull. existentially in then that, So buying investing the having as ongoing we're think, important. we back an this a is year to plus global and is billion lever that franchise $X buyback be opportunistic. And We'll going

-- the specifically. And the industry, and respectfully, can out see going it those the We things last our conservatively Basel but we'll very also likely that continue to case election. we aligned our have Stanley uncertainty Of after to much plays see course, and our through add. of Morgan election, points matter the that we're make how with to

buffer But on it SLR. as now, XXX stands of X.X% basis CETX, points

We are business. investing in operating achieving leverage. the We're

So with on always we're movable optimizing these it, very but are close the eye feast, things and we're we happy are a keeping how a allocation.

follow-up all sweep one NII, that quick good for Got on it. stuff. And you, Sharon, deposits,

close those a balances about year maybe less have the that? cuts? QT next is get to think into rate serving before that the kind we And you've take, maybe NII, we have to potentially maintained. past balances event Are clients to think could I about bottom a give reallocate a close level despite bigger sort talked grow as -- clients Just of because end for year, how looking we cash the a of certain clients of they deposit of or as in invest, and of rate the if headwind one result,

Sure.

to So that's us. question the commercial a a clear, of just take last more I'd really QT first, be driver for say let for been hasn't me your part bank.

I direction it was So to with increase. has in or think do -- a decline an either don't

put It's So it I'd look where our the base that in we've changed types I'd has that the been say I'd because just it's used When just rate put pretty aside second is changed quarter, slightly materially. language that and environment of deposit to we've historically, we the different. say and context, changed. at since

that seen interest What is said, we deposit to from terms we have we've as can encouraging. the extremely know, I trends rates a And of control, in going. are are as where all are I level. So where don't we speak

come where course likely where quarter-over-quarter since be down over has of when gave last that basis. a If ever near-term about you the from -- The the course on think modestly where especially of and the the are will we we we've that the couple interest I rates. cut over weeks, Fed guidance is -- -- Fed

the more likely the will on And as XXXX, importantly, into on rates is look November, beginning December, sweeps at and a sit which will Fed what in January. when I is the in we will be does does forward one, think are, the are, be reevaluate we but of it where where we interest what what for path do of where based function 'XX do we

just I couple I last course of of But want had when in conversations perspective and over it's been NII years. about of that you particular. investors, that understand to a topic bit little think sweeps the around put for very especially the about important the sweeps a we've

to you quarter were been, million. Morgan quarter basis, on when But last Stanley about sweeps, a NII is The between where at I last think said, delta this have and third $XXX NII for degree, And the in year some as quarter. stabilizing. look relative we

We this day. make $XXX business million in a day every single

we think I we the the thinking model, in and what about what model. begin are we that is about executing to so how need And think are really to

revenues, is the Asset double management fee-based this that of NII. increase year decline

need So business where asset see is to continue from that expect the now fees coming revenue perspective gain we we we we rise. to sweeps see we to a and model management what that this And and the back as durable are, that markets see that of bit just forward. move are

Glenn from Evercore. Schorr comes question next Our with

Okay.

a little So with PB RWA highs. it with bit. bar trading with actually a that's XX%, and record client led that I was And had balances at down assumed up it comes

Or the markets? continue that there this ebbs across plan -- feed great the some So client I'm and do you your curious, of to capital just think franchise is with flows environment?

if of better. you've going literally more capital capital to big how asset you shifts lot your it material -- hasn't that, lot a a goes will. infusion, wealth with doesn't percentage plan, now on wealth very and envision need and all accustomed do of and investments, follow-up business company made because Based With mix? the together think about you And wealth all used you're that I gotten I'll being this just in We've -- a ask Wealth it any Management. of

Sure.

greater Let Wealth has steady me back RWAs. backwards, just that a history And small talk increase with them a associated wealth. -- you when take I'll steady very so in Glenn, by with that's sees penetration, of of look -- probably products as do greater but the a lot you'll move to to just And those our and of see lending that kind we client to offering allocation growth. base, will that household about think we usage where as that capital FAs forward.

assets you look When a you corporates. though implemented and underlying seen you'll think the see lending business growth the about is the the of lot corporates, ISG at lending. secured RWAs and on really lot of a And in where the and been the we've loans Fed are of if there, also actually has all is commitments, that that

bank is the the to investment integrated That firm. and integrated inherent

of to recovery. We an years said said last we've be expect the have Banking-led over that individuals. We've in Investment this the course X invested and also we

the think the of you And bank actually in seeing more talent put right? about when seeing investment that's And the where RWAs you're terms to where broadly, work. that's results, also you're being

different increase increase income of parts in That's coming DCM, seeing where revenue. the more durable you're of financing balance fixed in lending from an an

stabilization that's something the more alongside investment and about rather we're So thinking bank the very the of necessarily it's durability than what much episodic.

deals think and transactions you it that for that's broadly. would those see how will and I environment it flow as ebb and corporates, about course, but Of

through XX% revenues up as what that add important, that and investment Yes. is in in flattish. down the across down. the metrics, of are the to roughly bar, flat look slightly year-over-year value that is risk What too, the the is in I'd you Glenn, is -- is the trading But same And fact, it's investment period, that bank X% running bank sequentially.

some So sort Sharon described business, the measured without we which that bank. the integrated taking to investment put type of up real model in of the across were durable up revenue speaks leverage to risk able our underlying operating

Our Citizens with JMP. Devin next question comes from Ryan

a anything great to are changes I'm of types that utilization less speak rates wealth. some even products of impacts customer little and if and in securities-based that. First maybe you there. Obviously, into maybe we securities of bit would or like engagement about order else be question or or thinking NII be certain could But goes lot interest obvious should or second some the on lending lower it missing with loans a margin that really

implications the get love kind so. out about next look year guys Just you or on to you NII some the over are of and the order around more flavor impacts second thinking as how

Yes.

We second we've as -- the I this continue seen wouldn't -- quarters. that growth. quarter seen is loan mentioned, we've stronger I

this is just So beginning. the

mortgages time, which spur the there's cycle, higher. where to a rates increase you'd steady down, in were is rate refinancing would there's been Basically, to will even as expect the and And rates begin lending. though activity, see it hike come over

You'll also asset increase with SBL. likely see in as you levels get into also an are tax they where cycles

wouldn't lending And and those of versus relatively -- -- more you begin surprising be historical have there's the the activity that on it more see So forward. products to been muted to basis.

just in on Great. adviser-led. in you And up come the from really And net contribution Okay. nice want notable in you new clients a back put wealth. assets quarter touched to new to then

catalyst. new or just like if there's you so anything there's if momentum you're with I'm else highlight programs clients, specifically, just whether curious continue. to And new that it curious can support could it's if that was running supported internally I'm a it that that that sounds products because

Sure.

clients. doing I'd you when Jed So that FAs we're new was what and about We clients, stock that plan on recently, really different he to remind a a they've which specifically different ways human come be calling, a a and to we're about new they'd publicly spoke with into think had on Devin, introducing if conversation example, actually begin someone's to where call or you referrals. for them to like matched call adviser. place It's financial event center a

those match and to year-to-date individuals referrals suit FAs That XXX,XXX appropriately are think -- different you've them. with will technology, versus using human and different AI over parts we we're in past. to ways the what seen begin double Remember, of

a So you're invested better now we've seeing on how I and in forward, see we're numbers in And think the and place individuals to We where new that, the value and an the assets. of terms understand giving opportunity the match their those understand what needs. that's of them advice in net to that's technology.

So bearing of it's we've really fruit the in investments made. terms

comes question with Dan next Our from Fannon Jefferies.

some was hoping outside expand strength upon I the you the activity could U.S. of of

Investment we you Some is cited base U.S. broader country you Banking specific, of but of you about seem recovery? of rest what the as you will the in curious can guys have recovery, market events talk the focused potential And the the said certainly U.S. to how think the be outside see know you how in and terms but participating the world cap

continent, have We've built The a intensified that investment commitment over was takes real global on in to real and that France. example, Iberia, a last local the bank. investment integrated in bank last it Italy, XX we X premise the made really years for over the in years investments

in continue be largest as actually Canary the Wharf, U.K. matter in presence to We so tenancy the

both So in the our markets investment and business. in bank. European Investment commitment is Banking That's real across the increasingly

and have with integrated sconced Investment we're are the thriving LPs capability that like. Management solutions who alternative on we But continent, business, a also and well the building

presence, couple was the in that in Mainland. as and we investment months into China and Tokyo alluded We as banking in important we in and institution decades. in markets leading it to of that And last this had have for a that really Kong a both in to, global the Hong disruptive you Asia and have events, of leading Sharon Banking Investment then strong, when been know, quarter, power spoke Japan

will see the the have you and a off regional our as in U.S., outside growth in good the in bet seamless both matter were point Asia revenues concentrated Europe. to where, of as world of of intensifies here, you in pay execution M&A we course, parts cross-border as So the asking,

East, Europe, the Asia. growth firm for almost XX% in year-over-year saw Middle XX% of Africa EMEA, in then and You plus

getting in and cycle go That speaks a sale the have the strategic to presence includes really presence to of potentially a Banking such and that wish obviously having we're local kicks transact. going when which in kind engage to making that or companies to activity, locally public Investment bigger

running the for years bank come. investment So global going to is pay to

Morgan bearing our I by important would is And of for fruit culturally many at we've part mobilize that Stanley senior an is of one just to which from add, done talent years what some the way, businesses regions, to region people with important familiar and is States another, that have the not across like in Budapest. places you operations which when of our outside India across XX,XXX your they're XX United but

markets Great. That's Revenues we But a up backdrop, at helpful. longer Management, have look as are modestly positive. certainly And follow-up, inflows significantly expenses. within the then [indiscernible] Investment just a moved if year-to-date. still have but

more how the more within do that skewed about fees? fixed fee, are on coming that the that's that's parametric of towards income, you about improving the lower expect trends longer-term how segment or in do think that's as you on pressure whether door the plan you putting mix profitability as overall So asset you or think

that. take I'll

there about that I'd where terms we're sure in identify as mix the to investments being is seeing seeing we're right types of different note, also that we're help the growth there you're service there just of make when made flows. also clients to to are shift trends. So the a you though, expenses think secular

trends, we're story making places sure an with investing in growth story those secular are both. our -- We're to and asset of It's parametric. for see alternatives. So an Both we there on it's be asset on clients.

to rather opportunities. simply capital fee I higher be in cetera, than sort Now said, private new credit, will new That game, being attract alternatives the be is and the more don't the see going to fees you fees, be and greater just the space parametric. a et as in basic might see seek higher to more the the continue but opportunity leader of to assets, to it

capital So sure also as to there service have to clients being associated see building, there with more the and it aggregation overall, making that our strategy asset but a invest. I we

money So to things need data. more market spend you're parametric, to going like on

need And will build You're move in but term, long to margin to cost with going money it term. the as opportunity going relationships for short us we forward wealth. the give growth on that's to the over

comes next Brennan question with UBS. Hawken Our from

All right.

down wrath here deposit ask part I So on encouraging So risk see was it Sharon thought the pretty I'm willing But costs get NII. totally question end-of-period right? really a and And the Wealth to tick that. appreciate of it's the totally to just a decently I business, of quarter-over-quarter.

we're a fact of the driven therefore, would seen So And into that beta de like potential and of growth, deposits be the to facto maybe is higher and that those sustainable? the then could And shift lot think is NII about grow it beta, so book securities tailwinds loan combination products? higher when year? optimistic next you've that by cost in that a thinking higher that the reinvestment too for

you, understand that multiple Brennan. this do that do I drivers there Thank appreciate you the understand business. business, and you are of

places that the is see you a hitting can of mix. growth to what think I on not is specific deposit that there still are that you're lot only

pieces. yes, it's So encouraging certain to see

had our course, in Fed Now rate also of there. you cut

cost the bring to continue of of deposits. will that certain So types

to, will alluded you also beta the think depend, really products. You about the on beta, like

of than things beta. have different the have for. X will products used savings different higher They a terms -- of in sweeps which much they are product X will beta like dynamics a they're lower just purposes much So with a what like something product, a

and that will changes the on difficult Fed be will, course, Fed the the where are very to There that opportunities. make well, the of of last depend be, will path. the have rate it forward, over Now course those taken where investment place so say, many it quarter on

would talked about opportunities, is are of cetera. pieces X It's that growing. So us of on seeing you're will of there always NII. them where the sort actually point people terms where Two we've et encouraging. I the to you're being ask in lending It's where are seeing that capital, deploy the side to able drive encouraging. That's asset growth for

back you we've and call, particularly different of especially I you first interest since if see rise. and see historically, begin said Sweeps, begin cut, know last cuts, quarter very in speaking, look encouraging, deposits this when to what what the is we as rate rate also do generally parts you to seen, the

So again, an sign. encouraging

of when -- behold, And about back be NII? in Where one. we XX we ago, That a the will have and lo if to see and very probability itself reinvestment really basis point it cut, and Fed. think quarter go the a of low no a was one and you is rate rest it

to our our are say, rather have of, data, they control I'm doing. with that have clients or know but control, positive. under we'll be But the we X of the December course to you that what don't do of our from under it's year why after rate they meetings So those a you we what where kind and blocks, then X do our November are see wouldn't from we over and I think are the perspective. you just the are all sort seeing restate I've where what and and told building know

Okay. for follow-up, That's shifting helpful. the Totally. then little a gears maybe bit. And

You spoke IPO hit some engagement. actually sponsor market. the start seen We've to sponsors to

thinking the Given that we the front? franchise seeing and you have how strong pipeline your there, on outlook year? are about in next into And ECM should strength be you what IPO

deployment Well, fundraising. have the ground measures, as by have portfolio $X.X XX is years trillion And of trillion the time the in in ground. some XX,XXX companies of powder. in roughly $X know, trillion companies the $X first sponsors dry the to for there, outpacing close They you the to

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there entry I company. highly box public do to regulated of their take [indiscernible] would way has markets. into But be a to that companies privately the a view the bunch barriers public about said I to think that much that are owned make great are been the want whole

make That them global. plans acquisitions, set go long-term up currency compensation allows like to to to and

front. private public, going having been time, that the some them I'd larger level to what a So for expect tougher reaching companies sale on are see private makes a

going-public There world, select doing time And first going I countries are will there is is exist alternatives, a the going-public phenomenon privatizations, earlier, are whether the to not whether I the private for exciting that it's this made global around reaching phenomenon but think that it's away. companies reference benchmarks.

its larger bank, the our So a a mid or quite to service is quickly on spot. IPO back, needing scale slowly of do, global hedging coming right needing company the course, we're capabilities, market a of services, the when suite And I of way mature needs. And cap, full going sweet names to work treasury they in market. at think then needing the see investment needing kind large that, advice global

and some time. M&A It bullish of So size the when come companies will coming back. the be And likely on I'm larger. they may IPOs take

volume unit listings. be stimulus of be our need going global mature quick post-COVID I going much these companies, But to the and So heyday very which the there are are sort will think than advice. of slower to

question comes Bolu with Christian next Our Autonomous. from

to see nice growth last really Management, loan X Wealth solid in the On quarters.

forward thinking come think you longer-term growth? more less down, we mature growth thinking to about XX-plus growth business back seeing with where that Just a Or today were percent levels loan reaccelerate upside? Do looking growth rates per are here bit as little kind pre-COVID you is how can of year? maybe maybe

question. more -- I for actually actually about upside less there's don't it's FAs with think to you products. think thank mature you I using those when I the No, of penetration go upside. think the more that

in double there's think terms digits to penetration. be do in that to the to low But the in That's used up higher. that teens. moved of that we we somewhere sort So opportunity surpass of

higher. kinds bank, at lending are even peers a the look if those commercial through on side, not you panels, similar numbers but of in And so of wealth more sort

So certainly there opportunities Christian. are there,

asking why the appreciate that's So I you question.

taxes, That But it's on efficiency use SBLs the what not thinking say and about doing talked you're back. from think lines. just And rates can about how those wouldn't mortgage come I individual an as the it's lot low, example, relatively an to to for of especially uses a not certainly if pay side. and flat, those about lines surprising. We've investor. been are perspective with have portfolio your

SEC I helpful. pricing scrutiny? a Wealth philosophy the provide the [indiscernible] then appreciate again. maybe around how can And But you deposits, this advisory-related of way. thinking around much within given issue one you data Very Wealth [indiscernible] are smaller deposit deposit is how Maybe on Management and maybe of any and about cash Okay. just now Management, assets? the some is the in more

Sure.

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looking And we that through factors we've cycle one and pricing quarter this even is. most the dynamics important cutting highlighted competitive competitive are of last and been where at

perspective. market, it's It's So and that that's deposits for on the -- it's is value the and competition. where need relative a also

that customer of include as all well. the things those So

comes from Gerard RBC. Cassidy question Our next with

how peaks. also where or guys expanding growing driving new talked -- that numbers? share the historical with these Can about you averages you're clients driven you by Can client much In areas your well? revenues just reach your compare historical as prepared you of were prime is as you're base brokerage clients' existing of us above that balances your remarks, X

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a with and importantly, but So the brokerage, been to and across way able cash them productive derivatives not too interact business. in we've prime across then just markets

of that investment one pocket are can across players part philosophy in bank spectrum. folks traditional this is integrated you asset have the that So moving this

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guys' credit. always quick don't I really Very have that then to a And helpful. follow-up, insights just big appreciate exposures your as others and

in that are give or a corporate million real America, JPMorgan you're helpful. I Bank you commercial you you and again, any had mentioned color, us folks color you, of loans. like a And think, charge-offs from Any here? so Can not big a of $XXX insights like so very estate lender

Sure. for. largely provisioned are Those

And so working themselves through is the market. think it's that as some been credit the changes what I you've seen though almost of have

Gerard, talking the If the years, CRE. of conversations, we've about back you lot X course had a last specifically over look of

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from take our Mayo Mike question Wells next Fargo. with We'll

you Earlier, efforts. about tech your talked

perhaps then what's about think Stanley of close is the with technology. Stanley. see OpenAI And so, OpenAI? here Ted, Morgan to follower, leader AI, Morgan quote do you a Morgan human is I example specifically, device the from wait best Stanley of others and you as to empowering partnership more going with or on marriage your it? with a for a date And

be provide would you using you're in I unique think Any great. OpenAI. color can

because it do work we with take I'll continue to Sure. OpenAI.

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that partnership, As extremely specifically that going to partnership well. is relates it

them. new to that look platforms can with applications continue at we use and new We

already that new a or And the quarters what's that X we there are help can obviously do launched terms our FAs will places the we're answer using to we've course have of speak discussed basically One so. and AI speak, tool understand in last that portal, can we've of AI of you use and where everything over is research published different so to that and then questions volume and read data. associated been

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to work and efficiency different will we use we think the a in with, save again there you overlay, to you also institution have for we after to the if back pockets that be AI where move of We're this efficiencies. gives part interaction the as the doing through bones advisers Obviously, can started human call across human time in places spaces think as but just the forward. -- that bare we

use productivity and to forward. how to we time gain that from So back invest to it's move then a of where balance understanding standpoint as a

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We'll take with from our HSBC. question Martinez Saul last

adviser-led Maybe pretty quarter brokerage of and income. to or now. asset some a diversifying little this trends mentioned for fixed fixed instruments And the outside. to alternatives clients time was fee-based, you a income fee-based sustained, had moving Sharon, bit flows You've good

expectations coming the to in have for and Can legs these for and equities mean prices we the might what down in dynamics on these and asset comment strength dynamics just where you rates? are terms you extent occurring, fee which that your rates given flow think of and

remarks, migration you understanding which actually gave the that prepared on the appreciate I really migration that is I we've been I is what question. comments and took really the appreciate of focused in note Yes. of assets.

brokerage on the brokerage -- self-directed at you there's side. look accounts about and think accounts we there's and So when adviser

brokerage in brokerage those not of fee-based. and is migrating adviser, numbers is numbers you are but terms a -- have also You from The in into have everything increasing actually an fee-based. count, what's

And fee-based. into assets oftentimes an or brokerage a you the into it they think in that we've would say account said not. in adviser way new net institution, why It directly is first. see you're But come side, always the doesn't important into the that's I come under -- expect we adviser go maybe comes let's

say, assets it And fee-based me where understand and advice, to that so to value seeing figure coming migration up, that and going. that there's is pick then wrapper, now let of what type so speak, put of I'd oh, out I in in to it's like a really the

years XX of it in coming most where equities. saw advice really of those or in. sort back go I so, you If fee-based only That's was

that changed. time, has Now about fixed income. began Over we to talk

-- fee had income. that do to degradation, Remember and of we it's say fixed into some but fee a mix degradation. would mix talk about not it's We'd

also Now we're alternatives. seeing into that mix

there think to offering. for more people people is to you that to to there more about. wrapper products advice can tools, products are put than more -- and in, when are interesting And and more the offered in more more invest. fee-based have it think also increase, have those opportunities people products We'll what's that that's as So assets places see more being there's others, fee-based about come value we begin the we to under

momentum, those and to the you streams So time. as gain revenue expect that I know, that are durable we over has think it

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

now and may disconnect, You have great day. a