Morgan Stanley profit rises to $4.9 billion as equities revenue jumps 41%

Morgan Stanley reported third-quarter net revenues of $20.3 billion, up 11.6% from a year earlier, net income applicable to the firm of $4.9 billion and a return on tangible common equity of 22.6%, as equity revenue jumped 41%.

The quarter still trailed the record set three months earlier. Net revenues were 4.7% below the $21.3 billion the firm reported for the second quarter of 2026, and diluted earnings per share of $3.03 compared with $3.46. Net income applicable to the firm was 6.5% above the year-earlier quarter, but the 22.6% return on tangible common equity came in below the 23.5% the firm reported a year earlier and the 26.6% of the three months to June 30.

Equities and advisory carry institutional securities

Institutional Securities net revenues were $10.0 billion, up 17.7% from $8.5 billion in the year-earlier quarter. Equity net revenues of $5.8 billion rose 40.9% from a year earlier, which the firm attributed to client engagement and strength in Asia. Fixed income net revenues of $2.01 billion were 7.3% lower than a year earlier, reflecting weaker credit results in securitized products and lower structured commodities activity. Investment banking revenue of $2.16 billion was 2.4% higher than a year earlier: advisory fees increased on more completed mergers in the Americas, while equity underwriting fell on fewer initial public offerings and block trades. The firm's pre-tax income was $6.48 billion, and the expense efficiency ratio was 67%, unchanged from a year earlier.

Wealth management sets records as IPO-linked assets arrive

Wealth Management net revenues rose 10.1% from a year earlier to a record $9.1 billion, and pre-tax income of $2.8 billion produced a pre-tax margin of 30.4%. The unit attracted $232 billion of net new assets and $80 billion of fee-based flows, with just over half of the inflows tied to client IPOs. Ted Pick, chairman and chief executive, said Wealth Management “reported record revenues and added $232 billion in net new assets and $80 billion in fee-based flows” and that across Wealth and Investment Management “total client assets grew to $10.5 trillion”.

Investment management's carried-interest reversal

Investment Management net revenues fell to $1.46 billion from $1.65 billion a year earlier. The firm attributed the decline to a reversal of accrued carried interest tied to certain investments in one of its private funds, which more than offset higher asset management and related fees of $1.57 billion on higher average assets under management. Long-term net flows were $15.8 billion.

Credit costs, capital and the next dated filing

The provision for credit losses was $148 million, against nothing a year earlier and $98 million in the prior quarter. The firm said the charge mainly reflected growth in its corporate and secured lending portfolios, and that the quarter included charge-offs of $105 million on certain corporate and commercial real estate loans that had been largely provisioned for earlier. Standardized Common Equity Tier 1 capital was 14.9%, down from 15.1% a year earlier, while the Tier 1 leverage ratio slipped to 5.9% from 6.8%. Morgan Stanley repurchased $1.5 billion of stock at an average price of $212.74 and declared a $1.15 quarterly dividend payable on November 13, 2026 to shareholders of record on October 30, 2026. The release carries no guidance for the fourth quarter, and the firm calls the capital ratios estimates that are subject to change in its quarterly report for the period ended September 30, 2026 — the filing that will show whether the third-quarter revenue mix held. Morgan Stanley reported the results as an Item 2.02 current report on Form 8-K filed on October 14, 2026.