Morgan Stanley faces market risk from fluctuating prices, rates, and spreads, particularly in trading activities. Credit risk exists from potential borrower defaults, especially in commercial real estate and corporate loans. Ongoing legal and regulatory investigations, including antitrust actions, pose significant financial and reputational risks. Country risk from foreign operations is also a concern. The availability and cost of financing can vary based on market conditions.
Financial Upside
Morgan Stanley reported strong net revenue growth (16% in Q3 2024, 10% YTD 2024) across business segments. High pre-tax margins (27% in Q3 2024, 28% YTD 2024) and return on equity (13.1% in Q3 2024, 13.5% YTD 2024) indicate strong profitability. The firm accreted $2.1 billion of Common Equity Tier 1 capital, maintaining a strong capital ratio (15.1%). Investment banking revenues and client activity are also strong.
