Morgan Stanley (NYSE:MS) Q1 2023 Earnings Call Transcript

It’s kind of what we wanted. I mean – and on the equity side, you can buy share, for sure, more, but you want to be in the part of the prime brokerage business that we want to be in. We don’t want to be in the sort of the broker last resort. So – but if you step back from it and what you have really got is kind of an oligopoly type structure emerged out of the financial crisis where a smaller number of institutions have the global capability for global sales and trading, and we are now one of them. And that was probably not a given 10 years ago. It certainly wasn’t a given. And you have just seen, obviously, Credit Suisse has been merged and that business, lots of parts of that business. I suspect this appear relating to the trading side of the prime brokerage.

So, our position gets stronger, not weaker. All that said, we are pretty careful about how much balance sheet we want to use to grow aggressively on the margin because we simply have good options in terms of wealth and asset management businesses. So, it’s a balancing act, but I think the team has done a great job, and I feel really good about where they landed the plane this quarter. tricky quarter, by the way, particularly in rates.Operator We will hear next from Jeremy Sigee from BNP.Jeremy Sigee Thank you. Just quite a specific one actually. I thought comp costs were a bit heavy in wealth and in investment management. And you mentioned the deferred comp plans linked to investment performance. Is that heavier deferred comp cost? Is that something that stays with us throughout the year, or is it – does it move around?

Is that a 1Q specific, or is that stuck with us for the rest of the year as well?Sharon Yeshaya Jeremy, as you remember, that moves around with the investments. You will see both on the revenue line and the expense line. And so you should look at them together, and that’s why we have enhanced the disclosure so that you can think about them from both sides, understand both the margin and the comp ratio, both historically and as we move forward.Jeremy Sigee That’s perfect. Thank you.Operator There are no further questions at this time. Ladies and gentlemen, this concludes today’s conference. Thank you everyone for participating. You may now disconnect.