Morgan Stanley - Profits down, but share price up

They reported a lower net income, even though revenue was up marginally.

However, that was not much of a concern it seems as share price rallied after results were out.

So why did that happen? And what else should investors take note of?

The Firm recorded severance costs of USD 308 million in the second quarter of 2023, associated with an employee action. That mainly caused the lower pre-tax income and net income.

Tangible book value increased by USD 0.72 per share, from USD 40.07 in Q2'22 to USD 40.79 in Q2'23.

Morgan Stanley's business is mainly in investment banking. It can be further dissected into institutional securities, wealth management, and investment management.

Nevertheless, an investment bank is still governed by the capital requirements stipulated and stated by Basel III.

CET1 increased 30 basis points to 15.5%. Share repurchases continue to create more value for existing shareholders, while dividends for the quarter is USD 0.85 per share. This is an increase of USD 0.075 per share.

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