Delaware | 1585 Broadway | 36-3145972 | (212) | 761-4000 | |||
(State or other jurisdiction of incorporation or organization) | New York, | NY | 10036 | (I.R.S. Employer Identification No.) | (Registrant’s telephone number, including area code) | ||
(Address of principal executive offices, including zip code) |
Securities registered pursuant to Section 12(b) of the Act: | ||
Title of each class | Trading Symbol(s) | Name of exchange on which registered |
Common Stock, $0.01 par value | MS | New York Stock Exchange |
Depositary Shares, each representing 1/1,000th interest in a share of Floating Rate | MS/PA | New York Stock Exchange |
Non-Cumulative Preferred Stock, Series A, $0.01 par value | ||
Depositary Shares, each representing 1/1,000th interest in a share of Fixed-to-Floating Rate | MS/PE | New York Stock Exchange |
Non-Cumulative Preferred Stock, Series E, $0.01 par value | ||
Depositary Shares, each representing 1/1,000th interest in a share of Fixed-to-Floating Rate | MS/PF | New York Stock Exchange |
Non-Cumulative Preferred Stock, Series F, $0.01 par value | ||
Depositary Shares, each representing 1/1,000th interest in a share of 6.625% | MS/PG | New York Stock Exchange |
Non-Cumulative Preferred Stock, Series G, $0.01 par value | ||
Depositary Shares, each representing 1/1,000th interest in a share of Fixed-to-Floating Rate | MS/PI | New York Stock Exchange |
Non-Cumulative Preferred Stock, Series I, $0.01 par value | ||
Depositary Shares, each representing 1/1,000th interest in a share of Fixed-to-Floating Rate | MS/PK | New York Stock Exchange |
Non-Cumulative Preferred Stock, Series K, $0.01 par value | ||
Global Medium-Term Notes, Series A, Fixed Rate Step-Up Senior Notes Due 2026 | MS/26C | New York Stock Exchange |
of Morgan Stanley Finance LLC (and Registrant’s guarantee with respect thereto) | ||
Market Vectors ETNs due March 31, 2020 (two issuances) | URR/DDR | NYSE Arca, Inc. |
Market Vectors ETNs due April 30, 2020 (two issuances) | CNY/INR | NYSE Arca, Inc. |
Morgan Stanley Cushing® MLP High Income Index ETNs due March 21, 2031 | MLPY | NYSE Arca, Inc. |
Large accelerated filer | ☒ | Accelerated filer | ☐ | Non-accelerated filer | ☐ | Smaller reporting company | ☐ | Emerging growth company | ☐ |
Table of Contents | Table of Contents | Part | Item | Page | Table of Contents | Part | Item | Page | ||
I | I | |||||||||
I | 2 | I | 2 | |||||||
I | 3 | I | 3 | |||||||
I | 1 | I | 1 | |||||||
II | II | |||||||||
II | 1 | II | 1 | |||||||
II | 2 | II | 2 | |||||||
I | 4 | I | 4 | |||||||
II | 6 | II | 6 | |||||||
E- 1 | E- 1 | |||||||||
S-1 | S-1 |
1 |
Management’s Discussion and Analysis |
1. | For the calculation of basic and diluted EPS, see Note 15 to the financial statements. |
• | We reported net revenues of |
• | We reported net revenues of |
2 |
Management’s Discussion and Analysis |
1. | The percentages on the bars in the chart represent the contribution of compensation and benefits expenses and non-compensation expenses to total non-interest expenses. |
Compensation and |
3 |
Management’s Discussion and Analysis |
Three Months Ended June 30, | Six Months Ended June 30, | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||
$ in millions | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||
Net income applicable to Morgan Stanley | 2,201 | 2,437 | 4,630 | 5,105 | $ | 2,173 | $ | 2,112 | $ | 6,803 | $ | 7,217 | ||||||||||||
Preferred stock dividends and other | 170 | 170 | 263 | 263 | 113 | 93 | 376 | 356 | ||||||||||||||||
Earnings applicable to Morgan Stanley common shareholders | $ | 2,031 | $ | 2,267 | $ | 4,367 | $ | 4,842 | $ | 2,060 | $ | 2,019 | $ | 6,427 | $ | 6,861 | ||||||||
Expense efficiency ratio1 | 71.7 | % | 70.7 | % | 71.5 | % | 69.9 | % | 73.0 | % | 71.1 | % | 72.0 | % | 70.3 | % | ||||||||
ROE2 | 11.2 | % | 13.0 | % | 12.1 | % | 13.9 | % | 11.2 | % | 11.5 | % | 11.8 | % | 13.1 | % | ||||||||
ROTCE2 | 12.8 | % | 14.9 | % | 13.8 | % | 16.0 | % | 12.9 | % | 13.2 | % | 13.5 | % | 15.1 | % |
in millions, except per share and employee data | At June 30, 2019 | At December 31, 2018 | At September 30, 2019 | At December 31, 2018 | ||||||||
GLR3 | $ | 221,792 | $ | 249,735 | $ | 226,923 | $ | 249,735 | ||||
Loans4 | $ | 120,901 | $ | 115,579 | $ | 125,522 | $ | 115,579 | ||||
Total assets | $ | 891,959 | $ | 853,531 | $ | 902,604 | $ | 853,531 | ||||
Deposits | $ | 176,593 | $ | 187,820 | $ | 180,738 | $ | 187,820 | ||||
Borrowings | $ | 197,848 | $ | 189,662 | $ | 193,659 | $ | 189,662 | ||||
Common shares outstanding | 1,659 | 1,700 | 1,624 | 1,700 | ||||||||
Common shareholders' equity | $ | 73,204 | $ | 71,726 | $ | 73,862 | $ | 71,726 | ||||
Tangible common shareholders’ equity2 | $ | 63,771 | $ | 62,879 | $ | 64,512 | $ | 62,879 | ||||
Book value per common share5 | $ | 44.13 | $ | 42.20 | $ | 45.49 | $ | 42.20 | ||||
Tangible book value per common share2, 5 | $ | 38.44 | $ | 36.99 | $ | 39.73 | $ | 36.99 | ||||
Worldwide employees | 59,513 | 60,348 | 60,532 | 60,348 |
At June 30, 2019 | At December 31, 2018 | At September 30, 2019 | At December 31, 2018 | |||||
Capital ratios6 | ||||||||
Common Equity Tier 1 capital | 16.3 | % | 16.9 | % | 16.3 | % | 16.9 | % |
Tier 1 capital | 18.6 | % | 19.2 | % | 18.5 | % | 19.2 | % |
Total capital | 21.0 | % | 21.8 | % | 20.9 | % | 21.8 | % |
Tier 1 leverage | 8.4 | % | 8.4 | % | 8.2 | % | 8.4 | % |
SLR | 6.5 | % | 6.5 | % | 6.3 | % | 6.5 | % |
1. | The expense efficiency ratio represents total non-interest expenses as a percentage of net revenues. |
2. | Represents a non-GAAP measure. See “Selected Non-GAAP Financial Information” herein. |
3. | For a discussion of the GLR, see “Liquidity and Capital Resources—Liquidity Risk Management Framework—Global Liquidity Reserve” herein. |
4. | Amounts include loans held for investment (net of allowance) and loans held for sale but exclude loans at fair value, which are included in Trading assets in the balance sheets (see Note 7 to the financial statements). |
5. | Book value per common share and tangible book value per common share equal common shareholders’ equity and tangible common shareholders’ equity, respectively, divided by common shares outstanding. |
6. | At |
4 |
Management’s Discussion and Analysis |
1. | The percentages on the bars in the charts represent the contribution of each business segment to the total of the applicable financial category and may not total to 100% due to intersegment eliminations. See Note 18 to the financial statements for details of intersegment eliminations. |
Institutional Securities net revenues of $5,023 million in the current quarter increased 2% from the prior year quarter primarily reflecting higher revenues in Fixed income sales and trading, partially offset by a decrease in Other revenues. Net revenues of $15,332 million in the current year period decreased 8% from the prior year period, primarily reflecting lower revenues from Equity sales and trading and Investment banking. |
Wealth Management net revenues of $4,358 million in the current quarter and $13,155 million in the current year period were relatively unchanged compared with the prior year periods. |
Investment Management net revenues of $764 million in the current quarter and $2,407 million in the current year period each increased 17% from the prior year periods. The current quarter results primarily reflected higher Investments and Asset Management revenues. The current year period results increased primarily due to higher Investments revenues. |
1. | For a discussion of how the geographic breakdown of net revenues is determined, see Note 18 to the financial statements. |
2. | The percentages on the bars in the charts represent the contribution of each region to the total. |
5 |
Management’s Discussion and Analysis |
Three Months Ended June 30, | Six Months Ended June 30, | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||
$ in millions, except per share data | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||
Net income applicable to Morgan Stanley | $ | 2,201 | $ | 2,437 | $ | 4,630 | $ | 5,105 | $ | 2,173 | $ | 2,112 | $ | 6,803 | $ | 7,217 | ||||||||
Impact of adjustments | — | (88 | ) | (101 | ) | (88 | ) | (89 | ) | (4 | ) | (190 | ) | (92 | ) | |||||||||
Adjusted net income applicable to Morgan Stanley—non-GAAP1 | $ | 2,201 | $ | 2,349 | $ | 4,529 | $ | 5,017 | $ | 2,084 | $ | 2,108 | $ | 6,613 | $ | 7,125 | ||||||||
Earnings per diluted common share | $ | 1.23 | $ | 1.30 | $ | 2.62 | $ | 2.75 | $ | 1.27 | $ | 1.17 | $ | 3.89 | $ | 3.92 | ||||||||
Impact of adjustments | — | (0.05 | ) | (0.06 | ) | (0.05 | ) | (0.06 | ) | — | (0.12 | ) | (0.05 | ) | ||||||||||
Adjusted earnings per diluted common share—non-GAAP1 | $ | 1.23 | $ | 1.25 | $ | 2.56 | $ | 2.70 | $ | 1.21 | $ | 1.17 | $ | 3.77 | $ | 3.87 | ||||||||
Effective income tax rate | 22.6 | % | 20.6 | % | 19.5 | % | 20.7 | % | 18.2 | % | 24.4 | % | 19.1 | % | 21.9 | % | ||||||||
Impact of adjustments | — | % | 2.8 | % | 1.8 | % | 1.4 | % | 3.2 | % | 0.2 | % | 2.2 | % | 0.9 | % | ||||||||
Adjusted effective income tax rate—non-GAAP1 | 22.6 | % | 23.4 | % | 21.3 | % | 22.1 | % | 21.4 | % | 24.6 | % | 21.3 | % | 22.8 | % |
$ in millions | At June 30, 2019 | At December 31, 2018 | At September 30, 2019 | At December 31, 2018 | ||||||||
Tangible equity U.S. GAAP | ||||||||||||
Morgan Stanley shareholders' equity | $ | 81,724 | $ | 80,246 | $ | 82,382 | $ | 80,246 | ||||
Less: Goodwill and net intangible assets | (9,433 | ) | (8,847 | ) | (9,350 | ) | (8,847 | ) | ||||
Tangible Morgan Stanley shareholders' equity—non-GAAP | $ | 72,291 | $ | 71,399 | $ | 73,032 | $ | 71,399 | ||||
U.S. GAAP | ||||||||||||
Common shareholders' equity | 73,204 | $ | 71,726 | $ | 73,862 | $ | 71,726 | |||||
Less: Goodwill and net intangible assets | $ | (9,433 | ) | $ | (8,847 | ) | (9,350 | ) | (8,847 | ) | ||
Tangible common shareholder's equity—non-GAAP | $ | 63,771 | $ | 62,879 | ||||||||
Tangible common shareholders' equity—non-GAAP | $ | 64,512 | $ | 62,879 |
Average Monthly Balance | Average Monthly Balance | |||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||
$ in millions | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||
Tangible equity | ||||||||||||||||||||||||
Morgan Stanley shareholder's equity | $ | 81,155 | $ | 78,432 | $ | 80,622 | $ | 77,960 | ||||||||||||||||
Morgan Stanley shareholders' equity | $ | 81,912 | $ | 78,760 | $ | 81,028 | $ | 78,165 | ||||||||||||||||
Less: Goodwill and net intangible assets | (9,098 | ) | (9,076 | ) | (8,978 | ) | (9,049 | ) | (9,389 | ) | (8,970 | ) | (9,097 | ) | (9,020 | ) | ||||||||
Tangible Morgan Stanley shareholders' equity | $ | 72,057 | $ | 69,356 | $ | 71,644 | $ | 68,911 | $ | 72,523 | $ | 69,790 | $ | 71,931 | $ | 69,145 | ||||||||
Common Shareholders' equity | $ | 72,635 | $ | 69,912 | $ | 72,102 | $ | 69,440 | ||||||||||||||||
Common shareholders' equity | $ | 73,392 | $ | 70,240 | $ | 72,508 | $ | 69,645 | ||||||||||||||||
Less: Goodwill and net intangible assets | (9,098 | ) | (9,076 | ) | (8,978 | ) | (9,049 | ) | (9,389 | ) | (8,970 | ) | (9,097 | ) | (9,020 | ) | ||||||||
Tangible common shareholders' equity | $ | 63,537 | $ | 60,836 | $ | 63,124 | $ | 60,391 | $ | 64,003 | $ | 61,270 | $ | 63,411 | $ | 60,625 |
Three Months Ended June 30, | Six Months Ended June 30, | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||
$ in billions | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||
Average common equity | ||||||||||||||||||||||||
Unadjusted | $ | 72.6 | $ | 69.9 | $ | 72.1 | $ | 69.4 | $ | 73.4 | $ | 70.2 | $ | 72.5 | $ | 69.6 | ||||||||
Adjusted1 | 72.6 | 69.9 | 72.0 | 69.4 | 73.4 | 70.2 | 72.4 | 69.6 | ||||||||||||||||
ROE2 | ||||||||||||||||||||||||
Unadjusted | 11.2 | % | 13.0 | % | 12.1 | % | 13.9 | % | 11.2 | % | 11.5 | % | 11.8 | % | 13.1 | % | ||||||||
Adjusted1, 3 | 11.2 | % | 12.5 | % | 11.8 | % | 13.7 | % | 10.7 | % | 11.5 | % | 11.5 | % | 13.0 | % | ||||||||
Average tangible common equity | Average tangible common equity | Average tangible common equity | ||||||||||||||||||||||
Unadjusted | $ | 63.5 | $ | 60.8 | $ | 63.1 | $ | 60.4 | $ | 64.0 | $ | 61.3 | $ | 63.4 | $ | 60.6 | ||||||||
Adjusted1 | 63.5 | 60.8 | 63.1 | 60.4 | 64.0 | 61.3 | 63.3 | 60.6 | ||||||||||||||||
ROTCE2 | ||||||||||||||||||||||||
Unadjusted | 12.8 | % | 14.9 | % | 13.8 | % | 16.0 | % | 12.9 | % | 13.2 | % | 13.5 | % | 15.1 | % | ||||||||
Adjusted1, 3 | 12.8 | % | 14.3 | % | 13.5 | % | 15.7 | % | 12.3 | % | 13.2 | % | 13.1 | % | 14.9 | % |
6 |
Management’s Discussion and Analysis |
Three Months Ended June 30, | Six Months Ended June 30, | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||
$ in billions | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||
Pre-tax margin4 | ||||||||||||||||||||||||
Institutional Securities | 29 | % | 32 | % | 30 | % | 33 | % | 26 | % | 32 | % | 28 | % | 33 | % | ||||||||
Wealth Management | 28 | % | 27 | % | 28 | % | 27 | % | 28 | % | 27 | % | 28 | % | 27 | % | ||||||||
Investment Management | 24 | % | 20 | % | 23 | % | 20 | % | 22 | % | 16 | % | 22 | % | 19 | % | ||||||||
Consolidated | 28 | % | 29 | % | 29 | % | 30 | % | 27 | % | 29 | % | 28 | % | 30 | % | ||||||||
Average common equity5 | Average common equity5 | |||||||||||||||||||||||
Institutional Securities | $ | 40.4 | $ | 40.8 | $ | 40.4 | $ | 40.8 | $ | 40.4 | $ | 40.8 | $ | 40.4 | $ | 40.8 | ||||||||
Wealth Management | 18.2 | 16.8 | 18.2 | 16.8 | 18.2 | 16.8 | 18.2 | 16.8 | ||||||||||||||||
Investment Management | 2.5 | 2.6 | 2.5 | 2.6 | 2.5 | 2.6 | 2.5 | 2.6 | ||||||||||||||||
Parent Company | 11.5 | 9.7 | 11.0 | 9.2 | 12.3 | 10.0 | 11.4 | 9.4 | ||||||||||||||||
Consolidated average common equity | $ | 72.6 | $ | 69.9 | $ | 72.1 | $ | 69.4 | $ | 73.4 | $ | 70.2 | $ | 72.5 | $ | 69.6 | ||||||||
Average tangible common equity5 | Average tangible common equity5 | Average tangible common equity5 | ||||||||||||||||||||||
Institutional Securities | $ | 39.9 | $ | 40.1 | $ | 39.9 | $ | 40.1 | $ | 39.9 | $ | 40.1 | $ | 39.9 | $ | 40.1 | ||||||||
Wealth Management | 10.2 | 9.2 | 10.2 | 9.2 | 10.2 | 9.2 | 10.2 | 9.2 | ||||||||||||||||
Investment Management | 1.5 | 1.7 | 1.5 | 1.7 | 1.5 | 1.7 | 1.5 | 1.7 | ||||||||||||||||
Parent Company | 11.9 | 9.8 | 11.5 | 9.4 | 12.4 | 10.3 | 11.8 | 9.6 | ||||||||||||||||
Consolidated average tangible common equity | $ | 63.5 | $ | 60.8 | $ | 63.1 | $ | 60.4 | $ | 64.0 | $ | 61.3 | $ | 63.4 | $ | 60.6 | ||||||||
ROE2, 6 | ||||||||||||||||||||||||
Institutional Securities | 9.8 | % | 13.0 | % | 11.3 | % | 14.1 | % | 9.8 | % | 10.3 | % | 10.8 | % | 12.8 | % | ||||||||
Wealth Management | 20.1 | % | 20.0 | % | 20.0 | % | 20.7 | % | 20.6 | % | 21.3 | % | 20.2 | % | 20.9 | % | ||||||||
Investment Management | 20.5 | % | 15.7 | % | 21.2 | % | 17.5 | % | 22.1 | % | 12.0 | % | 21.5 | % | 15.7 | % | ||||||||
Consolidated | 11.2 | % | 13.0 | % | 12.1 | % | 13.9 | % | 11.2 | % | 11.5 | % | 11.8 | % | 13.1 | % | ||||||||
ROTCE2, 6 | ||||||||||||||||||||||||
Institutional Securities | 9.9 | % | 13.2 | % | 11.5 | % | 14.3 | % | 9.9 | % | 10.4 | % | 10.9 | % | 13.0 | % | ||||||||
Wealth Management | 36.1 | % | 36.6 | % | 35.8 | % | 37.8 | % | 36.9 | % | 38.9 | % | 36.2 | % | 38.1 | % | ||||||||
Investment Management | 33.0 | % | 24.5 | % | 34.2 | % | 27.4 | % | 35.6 | % | 18.8 | % | 34.7 | % | 24.5 | % | ||||||||
Consolidated | 12.8 | % | 14.9 | % | 13.8 | % | 16.0 | % | 12.9 | % | 13.2 | % | 13.5 | % | 15.1 | % |
1. | Adjusted amounts exclude net discrete tax provisions (benefits) that are intermittent and include those that are recurring. |
2. | ROE and ROTCE represent annualized net income applicable to Morgan Stanley less preferred dividends as a percentage of average common equity and average tangible common equity, respectively. When excluding intermittent net discrete tax provisions (benefits), both the numerator and average denominator are adjusted. |
3. | The calculations used in determining our “ROE and ROTCE Targets” referred to in the following section are the Adjusted ROE and Adjusted ROTCE amounts shown in this table. |
4. | Pre-tax margin represents income from continuing operations before income taxes as a percentage of net revenues. |
5. | Average common equity and average tangible common equity for each business segment are determined using our Required Capital framework (see “Liquidity and Capital Resources—Regulatory Requirements—Attribution of Average Common Equity According to the Required Capital Framework” herein). |
6. | The calculation of ROE and ROTCE by segment uses net income applicable to Morgan Stanley by segment less preferred dividends allocated to each segment as a percentage of average common equity and average tangible common equity, respectively, allocated to each segment. |
7 |
Management’s Discussion and Analysis |
Three Months Ended June 30, | Three Months Ended September 30, | |||||||||||||||
$ in millions | 2019 | 2018 | % Change | 2019 | 2018 | % Change | ||||||||||
Revenues | ||||||||||||||||
Investment banking | $ | 1,472 | $ | 1,699 | (13 | )% | $ | 1,535 | $ | 1,459 | 5 | % | ||||
Trading | 2,558 | 3,128 | (18 | )% | 2,533 | 2,573 | (2 | )% | ||||||||
Investments | 194 | 89 | 118 | % | (18 | ) | 96 | (119 | )% | |||||||
Commissions and fees | 625 | 674 | (7 | )% | 643 | 589 | 9 | % | ||||||||
Asset management | 103 | 102 | 1 | % | 100 | 112 | (11 | )% | ||||||||
Other | 143 | 168 | (15 | )% | 51 | 244 | (79 | )% | ||||||||
Total non-interest revenues | 5,095 | 5,860 | (13 | )% | 4,844 | 5,073 | (5 | )% | ||||||||
Interest income | 3,289 | 2,195 | 50 | % | 3,112 | 2,425 | 28 | % | ||||||||
Interest expense | 3,271 | 2,341 | 40 | % | 2,933 | 2,569 | 14 | % | ||||||||
Net interest | 18 | (146 | ) | 112 | % | 179 | (144 | ) | N/M | |||||||
Net revenues | 5,113 | 5,714 | (11 | )% | 5,023 | 4,929 | 2 | % | ||||||||
Compensation and benefits | 1,789 | 1,993 | (10 | )% | 1,768 | 1,626 | 9 | % | ||||||||
Non-compensation expenses | 1,861 | 1,909 | (3 | )% | 1,948 | 1,747 | 12 | % | ||||||||
Total non-interest expenses | 3,650 | 3,902 | (6 | )% | 3,716 | 3,373 | 10 | % | ||||||||
Income from continuing operations before income taxes | 1,463 | 1,812 | (19 | )% | 1,307 | 1,556 | (16 | )% | ||||||||
Provision for income taxes | 324 | 323 | — | % | 189 | 397 | (52 | )% | ||||||||
Income from continuing operations | 1,139 | 1,489 | (24 | )% | 1,118 | 1,159 | (4 | )% | ||||||||
Income (loss) from discontinued operations, net of income taxes | — | (2 | ) | 100 | % | — | (3 | ) | 100 | % | ||||||
Net income | 1,139 | 1,487 | (23 | )% | 1,118 | 1,156 | (3 | )% | ||||||||
Net income applicable to noncontrolling interests | 18 | 30 | (40 | )% | 45 | 36 | 25 | % | ||||||||
Net income applicable to Morgan Stanley | $ | 1,121 | $ | 1,457 | (23 | )% | $ | 1,073 | $ | 1,120 | (4 | )% |
Six Months Ended June 30, | Nine Months Ended September 30, | |||||||||||||||
$ in millions | 2019 | 2018 | % Change | 2019 | 2018 | % Change | ||||||||||
Revenues | ||||||||||||||||
Investment banking | $ | 2,623 | $ | 3,212 | (18 | )% | $ | 4,158 | $ | 4,671 | (11 | )% | ||||
Trading | 5,688 | 6,771 | (16 | )% | 8,221 | 9,344 | (12 | )% | ||||||||
Investments | 275 | 138 | 99 | % | 257 | 234 | 10 | % | ||||||||
Commissions and fees | 1,246 | 1,418 | (12 | )% | 1,889 | 2,007 | (6 | )% | ||||||||
Asset management | 210 | 212 | (1 | )% | 310 | 324 | (4 | )% | ||||||||
Other | 365 | 304 | 20 | % | 416 | 548 | (24 | )% | ||||||||
Total non-interest revenues | 10,407 | 12,055 | (14 | )% | 15,251 | 17,128 | (11 | )% | ||||||||
Interest income | 6,345 | 3,999 | 59 | % | 9,457 | 6,424 | 47 | % | ||||||||
Interest expense | 6,443 | 4,240 | 52 | % | 9,376 | 6,809 | 38 | % | ||||||||
Net interest | (98 | ) | (241 | ) | 59 | % | 81 | (385 | ) | 121 | % | |||||
Net revenues | 10,309 | 11,814 | (13 | )% | 15,332 | 16,743 | (8 | )% | ||||||||
Compensation and benefits | 3,608 | 4,153 | (13 | )% | 5,376 | 5,779 | (7 | )% | ||||||||
Non-compensation expenses | 3,643 | 3,737 | (3 | )% | 5,591 | 5,484 | 2 | % | ||||||||
Total non-interest expenses | 7,251 | 7,890 | (8 | )% | 10,967 | 11,263 | (3 | )% | ||||||||
Income from continuing operations before income taxes | 3,058 | 3,924 | (22 | )% | 4,365 | 5,480 | (20 | )% | ||||||||
Provision for income taxes | 514 | 772 | (33 | )% | 703 | 1,169 | (40 | )% | ||||||||
Income from continuing operations | 2,544 | 3,152 | (19 | )% | 3,662 | 4,311 | (15 | )% | ||||||||
Income (loss) from discontinued operations, net of income taxes | — | (4 | ) | 100 | % | — | (7 | ) | 100 | % | ||||||
Net income | 2,544 | 3,148 | (19 | )% | 3,662 | 4,304 | (15 | )% | ||||||||
Net income applicable to noncontrolling interests | 52 | 64 | (19 | )% | 97 | 100 | (3 | )% | ||||||||
Net income applicable to Morgan Stanley | $ | 2,492 | $ | 3,084 | (19 | )% | $ | 3,565 | $ | 4,204 | (15 | )% |
8 |
Management’s Discussion and Analysis |
Three Months Ended June 30, | Three Months Ended September 30, | |||||||||||||||
$ in millions | 2019 | 2018 | % Change | 2019 | 2018 | % Change | ||||||||||
Advisory | $ | 506 | $ | 618 | (18 | )% | $ | 550 | $ | 510 | 8 | % | ||||
Underwriting: | ||||||||||||||||
Equity | 546 | 541 | 1 | % | 401 | 441 | (9 | )% | ||||||||
Fixed income | 420 | 540 | (22 | )% | 584 | 508 | 15 | % | ||||||||
Total Underwriting | 966 | 1,081 | (11 | )% | 985 | 949 | 4 | % | ||||||||
Total Investment banking | $ | 1,472 | $ | 1,699 | (13 | )% | $ | 1,535 | $ | 1,459 | 5 | % |
Six Months Ended June 30, | Nine Months Ended September 30, | |||||||||||||||
$ in millions | 2019 | 2018 | % Change | 2019 | 2018 | % Change | ||||||||||
Advisory | $ | 912 | $ | 1,192 | (23 | )% | $ | 1,462 | $ | 1,702 | (14 | )% | ||||
Underwriting: | ||||||||||||||||
Equity | 885 | 962 | (8 | )% | 1,286 | 1,403 | (8 | )% | ||||||||
Fixed income | 826 | 1,058 | (22 | )% | 1,410 | 1,566 | (10 | )% | ||||||||
Total Underwriting | 1,711 | 2,020 | (15 | )% | 2,696 | 2,969 | (9 | )% | ||||||||
Total Investment banking | $ | 2,623 | $ | 3,212 | (18 | )% | $ | 4,158 | $ | 4,671 | (11 | )% |
Three Months Ended June 30, | Six Months Ended June 30, | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||
$ in billions | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||
Completed mergers and acquisitions1 | $ | 150 | $ | 334 | $ | 344 | $ | 504 | $ | 214 | $ | 170 | $ | 580 | $ | 674 | ||||||||
Equity and equity-related offerings2, 3 | 15 | 16 | 29 | 37 | 17 | 15 | 47 | 52 | ||||||||||||||||
Fixed income offerings2, 4 | 57 | 67 | 115 | 125 | 78 | 68 | 196 | 193 |
1. | Includes transactions of $100 million or more. Based on full credit to each of the advisors in a transaction. |
2. | Based on full credit for single book managers and equal credit for joint book managers. |
3. | Includes Rule 144A issuances and registered public offerings of common stock, convertible securities and rights offerings. |
4. | Includes Rule 144A and publicly registered issuances, non-convertible preferred stock, mortgage-backed and asset-backed securities, and taxable municipal debt. Excludes leveraged loans and self-led issuances. |
Three Months Ended June 30, | Three Months Ended September 30, | |||||||||||||||
$ in millions | 2019 | 2018 | % Change | 2019 | 2018 | % Change | ||||||||||
Trading | $ | 2,558 | $ | 3,128 | (18 | )% | $ | 2,533 | $ | 2,573 | (2 | )% | ||||
Commissions and fees | 625 | 674 | (7 | )% | 643 | 589 | 9 | % | ||||||||
Asset management | 103 | 102 | 1 | % | 100 | 112 | (11 | )% | ||||||||
Net interest | 18 | (146 | ) | 112 | % | 179 | (144 | ) | N/M | |||||||
Total | $ | 3,304 | $ | 3,758 | (12 | )% | $ | 3,455 | $ | 3,130 | 10 | % |
Six Months Ended June 30, | Nine Months Ended September 30, | |||||||||||||||
$ in millions | 2019 | 2018 | % Change | 2019 | 2018 | % Change | ||||||||||
Trading | $ | 5,688 | $ | 6,771 | (16 | )% | $ | 8,221 | $ | 9,344 | (12 | )% | ||||
Commissions and fees | 1,246 | 1,418 | (12 | )% | 1,889 | 2,007 | (6 | )% | ||||||||
Asset Management | 210 | 212 | (1 | )% | 310 | 324 | (4 | )% | ||||||||
Net interest | (98 | ) | (241 | ) | 59 | % | 81 | (385 | ) | 121 | % | |||||
Total | $ | 7,046 | $ | 8,160 | (14 | )% | $ | 10,501 | $ | 11,290 | (7 | )% |
9 |
Management’s Discussion and Analysis |
Three Months Ended June 30, | Three Months Ended September 30, | |||||||||||||||
$ in millions | 2019 | 2018 | % Change | 2019 | 2018 | % Change | ||||||||||
Equity | $ | 2,130 | $ | 2,470 | (14 | )% | $ | 1,991 | $ | 2,019 | (1 | )% | ||||
Fixed income | 1,133 | 1,389 | (18 | )% | 1,430 | 1,179 | 21 | % | ||||||||
Other | 41 | (101 | ) | 141 | % | 34 | (68 | ) | 150 | % | ||||||
Total | $ | 3,304 | $ | 3,758 | (12 | )% | $ | 3,455 | $ | 3,130 | 10 | % |
Six Months Ended June 30, | Nine Months Ended September 30, | |||||||||||||||
$ in millions | 2019 | 2018 | % Change | 2019 | 2018 | % Change | ||||||||||
Equity | $ | 4,145 | $ | 5,028 | (18 | )% | $ | 6,136 | $ | 7,047 | (13 | )% | ||||
Fixed income | 2,843 | 3,262 | (13 | )% | 4,273 | 4,441 | (4 | )% | ||||||||
Other | 58 | (130 | ) | 145 | % | 92 | (198 | ) | 146 | % | ||||||
Total | $ | 7,046 | $ | 8,160 | (14 | )% | $ | 10,501 | $ | 11,290 | (7 | )% |
Three Months Ended June 30, 2019 | Three Months Ended September 30, 2019 | |||||||||||||||||||||||
Net | Net | |||||||||||||||||||||||
$ in millions | Trading | Fees1 | Interest2 | Total | Trading | Fees1 | Interest2 | Total | ||||||||||||||||
Financing | $ | 1,085 | $ | 94 | $ | (152 | ) | $ | 1,027 | $ | 1,049 | $ | 88 | $ | (90 | ) | $ | 1,047 | ||||||
Execution services | 600 | 554 | (51 | ) | 1,103 | 446 | 564 | (66 | ) | 944 | ||||||||||||||
Total Equity | $ | 1,685 | $ | 648 | $ | (203 | ) | $ | 2,130 | $ | 1,495 | $ | 652 | $ | (156 | ) | $ | 1,991 | ||||||
Total Fixed income | $ | 1,144 | $ | 81 | $ | (92 | ) | $ | 1,133 | $ | 1,329 | $ | 90 | $ | 11 | $ | 1,430 |
Three Months Ended June 30, 2018 | ||||||||||||
Net | ||||||||||||
$ in millions | Trading | Fees1 | Interest2 | Total | ||||||||
Financing | $ | 1,373 | $ | 89 | $ | (192 | ) | $ | 1,270 | |||
Execution services | 661 | 605 | (66 | ) | 1,200 | |||||||
Total Equity | $ | 2,034 | $ | 694 | $ | (258 | ) | $ | 2,470 | |||
Total Fixed income | $ | 1,299 | $ | 83 | $ | 7 | $ | 1,389 |
Six Months Ended June 30, 2019 | Three Months Ended September 30, 2018 | |||||||||||||||||||||||
Net | Net | |||||||||||||||||||||||
$ in millions | Trading | Fees1 | Interest2 | Total | Trading | Fees1 | Interest2 | Total | ||||||||||||||||
Financing | $ | 2,200 | $ | 192 | $ | (410 | ) | $ | 1,982 | $ | 1,097 | $ | 99 | $ | (141 | ) | $ | 1,055 | ||||||
Execution services | 1,151 | 1,107 | (95 | ) | 2,163 | 554 | 524 | (114 | ) | 964 | ||||||||||||||
Total Equity | $ | 3,351 | $ | 1,299 | $ | (505 | ) | $ | 4,145 | $ | 1,651 | $ | 623 | $ | (255 | ) | $ | 2,019 | ||||||
Total Fixed income | $ | 2,871 | $ | 159 | $ | (187 | ) | $ | 2,843 | $ | 1,189 | $ | 78 | $ | (88 | ) | $ | 1,179 |
Six Months Ended June 30, 2018 | Nine Months Ended September 30, 2019 | |||||||||||||||||||||||
Net | Net | |||||||||||||||||||||||
$ in millions | Trading | Fees1 | Interest2 | Total | Trading | Fees1 | Interest2 | Total | ||||||||||||||||
Financing | $ | 2,607 | $ | 196 | $ | (338 | ) | $ | 2,465 | $ | 3,249 | $ | 280 | $ | (500 | ) | $ | 3,029 | ||||||
Execution services | 1,452 | 1,269 | (158 | ) | 2,563 | 1,597 | 1,671 | (161 | ) | 3,107 | ||||||||||||||
Total Equity | $ | 4,059 | $ | 1,465 | $ | (496 | ) | $ | 5,028 | $ | 4,846 | $ | 1,951 | $ | (661 | ) | $ | 6,136 | ||||||
Total Fixed income | $ | 3,014 | $ | 166 | $ | 82 | $ | 3,262 | $ | 4,200 | $ | 249 | $ | (176 | ) | $ | 4,273 |
Nine Months Ended September 30, 2018 | ||||||||||||
Net | ||||||||||||
$ in millions | Trading | Fees1 | Interest2 | Total | ||||||||
Financing | $ | 3,704 | $ | 295 | $ | (479 | ) | $ | 3,520 | |||
Execution services | 2,006 | 1,793 | (272 | ) | 3,527 | |||||||
Total Equity | $ | 5,710 | $ | 2,088 | $ | (751 | ) | $ | 7,047 | |||
Total Fixed income | $ | 4,203 | $ | 244 | $ | (6 | ) | $ | 4,441 |
1. | Includes Commissions and fees and Asset management revenues. |
2. | Includes funding costs, which are allocated to the businesses based on funding usage. |
10 |
Management’s Discussion and Analysis |
11 |
Management’s Discussion and Analysis |
12 |
Management’s Discussion and Analysis |
Three Months Ended June 30, | Three Months Ended September 30, | |||||||||||||||
$ in millions | 2019 | 2018 | % Change | 2019 | 2018 | % Change | ||||||||||
Revenues | ||||||||||||||||
Investment banking | $ | 138 | $ | 114 | 21 | % | $ | 118 | $ | 129 | (9 | )% | ||||
Trading | 162 | 135 | 20 | % | 61 | 160 | (62 | )% | ||||||||
Investments | — | 3 | (100 | )% | ||||||||||||
Commissions and fees | 428 | 442 | (3 | )% | 416 | 409 | 2 | % | ||||||||
Asset management | 2,544 | 2,514 | 1 | % | 2,639 | 2,573 | 3 | % | ||||||||
Other | 120 | 74 | 62 | % | 81 | 58 | 40 | % | ||||||||
Total non-interest revenues | 3,392 | 3,282 | 3 | % | 3,315 | 3,329 | ―% | |||||||||
Interest income | 1,348 | 1,320 | 2 | % | 1,378 | 1,412 | (2 | )% | ||||||||
Interest expense | 332 | 277 | 20 | % | 335 | 342 | (2 | )% | ||||||||
Net interest | 1,016 | 1,043 | (3 | )% | 1,043 | 1,070 | (3 | )% | ||||||||
Net revenues | 4,408 | 4,325 | 2 | % | 4,358 | 4,399 | (1 | )% | ||||||||
Compensation and benefits | 2,382 | 2,356 | 1 | % | 2,340 | 2,415 | (3 | )% | ||||||||
Non-compensation expenses | 783 | 812 | (4 | )% | 780 | 790 | (1 | )% | ||||||||
Total non-interest expenses | 3,165 | 3,168 | — | % | 3,120 | 3,205 | (3 | )% | ||||||||
Income from continuing operations before income taxes | $ | 1,243 | $ | 1,157 | 7 | % | $ | 1,238 | $ | 1,194 | 4 | % | ||||
Provision for income taxes | 290 | 281 | 3 | % | 276 | 281 | (2 | )% | ||||||||
Net income applicable to Morgan Stanley | $ | 953 | $ | 876 | 9 | % | $ | 962 | $ | 913 | 5 | % |
Six Months Ended June 30, | Nine Months Ended September 30, | |||||||||||||||
$ in millions | 2019 | 2018 | % Change | 2019 | 2018 | % Change | ||||||||||
Revenues | ||||||||||||||||
Investment banking | $ | 247 | $ | 254 | (3 | )% | $ | 365 | $ | 383 | (5 | )% | ||||
Trading | 464 | 244 | 90 | % | 525 | 404 | 30 | % | ||||||||
Investments | 1 | 3 | (67 | )% | 1 | 3 | (67 | )% | ||||||||
Commissions and fees | 834 | 940 | (11 | )% | 1,250 | 1,349 | (7 | )% | ||||||||
Asset management | 4,905 | 5,009 | (2 | )% | 7,544 | 7,582 | (1 | )% | ||||||||
Other | 200 | 137 | 46 | % | 281 | 195 | 44 | % | ||||||||
Total non-interest revenues | 6,651 | 6,587 | 1 | % | 9,966 | 9,916 | 1 | % | ||||||||
Interest income | 2,761 | 2,600 | 6 | % | 4,139 | 4,012 | 3 | % | ||||||||
Interest expense | 615 | 488 | 26 | % | 950 | 830 | 14 | % | ||||||||
Net interest | 2,146 | 2,112 | 2 | % | 3,189 | 3,182 | ―% | |||||||||
Net revenues | 8,797 | 8,699 | 1 | % | 13,155 | 13,098 | ―% | |||||||||
Compensation and benefits | 4,844 | 4,806 | 1 | % | 7,184 | 7,221 | (1 | )% | ||||||||
Non-compensation expenses | 1,522 | 1,576 | (3 | )% | 2,302 | 2,366 | (3 | )% | ||||||||
Total non-interest expenses | 6,366 | 6,382 | — | % | 9,486 | 9,587 | (1 | )% | ||||||||
Income from continuing operations before income taxes | $ | 2,431 | $ | 2,317 | 5 | % | $ | 3,669 | $ | 3,511 | 5 | % | ||||
Provision for income taxes | 554 | 527 | 5 | % | 830 | 808 | 3 | % | ||||||||
Net income applicable to Morgan Stanley | $ | 1,877 | $ | 1,790 | 5 | % | $ | 2,839 | $ | 2,703 | 5 | % |
At June 30, 2019 | At December 31, 2018 | At September 30, 2019 | At December 31, 2018 | |||||||||
$ in billions, except employee data | ||||||||||||
Client assets | $ | 2,570 | $ | 2,303 | $ | 2,565 | $ | 2,303 | ||||
Fee-based client assets1 | $ | 1,159 | $ | 1,046 | $ | 1,186 | $ | 1,046 | ||||
Fee-based client assets as a percentage of total client assets | 45 | % | 45 | % | 46 | % | 45 | % | ||||
Client liabilities2 | $ | 84 | $ | 83 | $ | 86 | $ | 83 | ||||
Investment securities portfolio | $ | 69.8 | $ | 68.6 | $ | 69.8 | $ | 68.6 | ||||
Loans and lending commitments | $ | 86.4 | $ | 82.9 | $ | 88.3 | $ | 82.9 | ||||
Wealth Management representatives | 15,633 | 15,694 | 15,553 | 15,694 |
Three Months Ended June 30, | Three Months Ended September 30, | |||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||
Per representative: | ||||||||||||
Annualized revenues ($ in thousands)3 | $ | 1,125 | $ | 1,105 | $ | 1,118 | $ | 1,125 | ||||
Client assets ($ in millions)4 | $ | 164 | $ | 154 | $ | 165 | $ | 159 | ||||
Fee-based asset flows ($ in billions)5 | $ | 9.8 | $ | 15.3 | $ | 15.5 | $ | 16.2 |
Six Months Ended June 30, | Nine Months Ended September 30, | |||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||
Per representative: | ||||||||||||
Annualized revenues ($ in thousands)3 | $ | 1,122 | $ | 1,110 | $ | 1,121 | $ | 1,114 | ||||
Client assets ($ in millions)4 | $ | 164 | $ | 154 | $ | 165 | $ | 159 | ||||
Fee-based asset flows ($ in billions)5 | $ | 24.6 | $ | 33.5 | $ | 40.1 | $ | 49.7 |
1. | Fee-based client assets represent the amount of assets in client accounts where the fee for services is calculated based on those assets. |
2. | Client liabilities include securities-based and tailored lending, residential real estate loans and margin lending. |
3. | Revenues per representative equal Wealth Management’s annualized net revenues divided by the average number of representatives. |
4. | Client assets per representative equal total period-end client assets divided by period-end number of representatives. |
5. | For a description of the Inflows and Outflows included within Fee-based asset flows, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Business Segments—Wealth Management—Fee-Based Client Assets” in the 2018 Form 10-K. Excludes institutional cash management-related activity. |
13 |
Management’s Discussion and Analysis |
Three Months Ended June 30, | Three Months Ended September 30, | |||||||||||||||
$ in millions | 2019 | 2018 | % Change | 2019 | 2018 | % Change | ||||||||||
Investment banking | $ | 138 | $ | 114 | 21 | % | $ | 118 | $ | 129 | (9 | )% | ||||
Trading | 162 | 135 | 20 | % | 61 | 160 | (62 | )% | ||||||||
Commissions and fees | 428 | 442 | (3 | )% | 416 | 409 | 2 | % | ||||||||
Total | $ | 728 | $ | 691 | 5 | % | $ | 595 | $ | 698 | (15 | )% | ||||
Transactional revenues as a % of Net revenues | 17 | % | 16 | % | 14 | % | 16 | % |
Six Months Ended June 30, | Nine Months Ended September 30, | |||||||||||||||
$ in millions | 2019 | 2018 | % Change | 2019 | 2018 | % Change | ||||||||||
Investment banking | $ | 247 | $ | 254 | (3 | )% | $ | 365 | $ | 383 | (5 | )% | ||||
Trading | 464 | 244 | 90 | % | 525 | 404 | 30 | % | ||||||||
Commissions and fees | 834 | 940 | (11 | )% | 1,250 | 1,349 | (7 | )% | ||||||||
Total | $ | 1,545 | $ | 1,438 | 7 | % | $ | 2,140 | $ | 2,136 | N/M | |||||
Transactional revenues as a % of Net revenues | 18 | % | 17 | % | 16 | % | 16 | % |
$ in billions | At March 31, 2019 | Inflows | Outflows | Market Impact | At June 30, 2019 | ||||||||||
Separately managed1 | $ | 276 | $ | 10 | $ | (5 | ) | $ | 15 | $ | 296 | ||||
Unified managed2 | 283 | 12 | (11 | ) | 8 | 292 | |||||||||
Advisor | 147 | 7 | (9 | ) | 4 | 149 | |||||||||
Portfolio manager | 391 | 21 | (15 | ) | 3 | 400 | |||||||||
Subtotal | $ | 1,097 | $ | 50 | $ | (40 | ) | $ | 30 | $ | 1,137 | ||||
Cash management | 19 | 3 | (4 | ) | 4 | 22 | |||||||||
Total fee-based client assets | $ | 1,116 | $ | 53 | $ | (44 | ) | $ | 34 | $ | 1,159 |
$ in billions | At March 31, 2018 | Inflows | Outflows | Market Impact | At June 30, 2018 | ||||||||||
Separately managed1 | $ | 260 | $ | 9 | $ | (5 | ) | $ | 3 | $ | 267 | ||||
Unified managed2 | 274 | 12 | (9 | ) | 2 | 279 | |||||||||
Advisor | 147 | 8 | (8 | ) | 2 | 149 | |||||||||
Portfolio manager | 356 | 20 | (12 | ) | 3 | 367 | |||||||||
Subtotal | $ | 1,037 | $ | 49 | $ | (34 | ) | $ | 10 | $ | 1,062 | ||||
Cash management | 21 | 6 | (5 | ) | — | 22 | |||||||||
Total fee-based client assets | $ | 1,058 | $ | 55 | $ | (39 | ) | $ | 10 | $ | 1,084 |
$ in billions | At December 31, 2018 | Inflows | Outflows | Market Impact | At June 30, 2019 | ||||||||||
Separately managed1 | $ | 279 | $ | 23 | $ | (9 | ) | $ | 3 | $ | 296 | ||||
Unified managed2 | 257 | 23 | (20 | ) | 32 | 292 | |||||||||
Advisor | 137 | 14 | (17 | ) | 15 | 149 | |||||||||
Portfolio manager | 353 | 38 | (27 | ) | 36 | 400 | |||||||||
Subtotal | $ | 1,026 | $ | 98 | $ | (73 | ) | $ | 86 | $ | 1,137 | ||||
Cash management | 20 | 7 | (9 | ) | 4 | 22 | |||||||||
Total fee-based client assets | $ | 1,046 | $ | 105 | $ | (82 | ) | $ | 90 | $ | 1,159 |
$ in billions | At December 31, 2017 | Inflows | Outflows | Market Impact | At June 30, 2018 | ||||||||||
Separately managed1 | $ | 252 | $ | 18 | $ | (10 | ) | $ | 7 | $ | 267 | ||||
Unified managed2 | 271 | 26 | (18 | ) | — | 279 | |||||||||
Advisor | 149 | 16 | (16 | ) | — | 149 | |||||||||
Portfolio manager | 353 | 39 | (22 | ) | (3 | ) | 367 | ||||||||
Subtotal | $ | 1,025 | $ | 99 | $ | (66 | ) | $ | 4 | $ | 1,062 | ||||
Cash management | 20 | 11 | (9 | ) | — | 22 | |||||||||
Total fee-based client assets | $ | 1,045 | $ | 110 | $ | (75 | ) | $ | 4 | $ | 1,084 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||
Fee rate in bps | 2019 | 2018 | 2019 | 2018 | ||||
Separately managed | 15 | 16 | 15 | 16 | ||||
Unified managed2 | 100 | 99 | 101 | 99 | ||||
Advisor | 87 | 84 | 87 | 85 | ||||
Portfolio manager | 94 | 96 | 95 | 96 | ||||
Subtotal | 75 | 77 | 74 | 76 | ||||
Cash management | 6 | 6 | 6 | 6 | ||||
Total fee-based client assets | 74 | 75 | 73 | 75 |
Three Months Ended June 30, | ||||||||
$ in millions | 2019 | 2018 | % Change | |||||
Revenues | ||||||||
Investment banking | $ | (1 | ) | $ | — | N/M | ||
Trading | (1 | ) | $ | 16 | (106 | )% | ||
Investments | 247 | 55 | N/M | |||||
Asset management | 612 | 610 | — | % | ||||
Other | (9 | ) | 3 | N/M | ||||
Total non-interest revenues | 848 | 684 | 24 | % | ||||
Interest income | 6 | 17 | (65 | )% | ||||
Interest expense | 15 | 10 | 50 | % | ||||
Net interest | (9 | ) | 7 | N/M | ||||
Net revenues | 839 | 691 | 21 | % | ||||
Compensation and benefits | 360 | 272 | 32 | % | ||||
Non-compensation expenses | 280 | 279 | — | % | ||||
Total non-interest expenses | 640 | 551 | 16 | % | ||||
Income from continuing operations before income taxes | $ | 199 | $ | 140 | 42 | % | ||
Provision for income taxes | 44 | 36 | 22 | % | ||||
Net income | 155 | 104 | 49 | % | ||||
Net income applicable to noncontrolling interests | 27 | — | N/M | |||||
Net income applicable to Morgan Stanley | $ | 128 | $ | 104 | 23 | % |
Six Months Ended June 30, | ||||||||
$ in millions | 2019 | 2018 | % Change | |||||
Revenues | ||||||||
Investment banking | $ | (1 | ) | $ | — | N/M | ||
Trading | (4 | ) | $ | 21 | (119 | )% | ||
Investments | 438 | 132 | N/M | |||||
Asset management | 1,229 | 1,236 | (1 | )% | ||||
Other | (6 | ) | 13 | (146 | )% | |||
Total non-interest revenues | 1,656 | 1,402 | 18 | % | ||||
Interest income | 10 | 18 | (44 | )% | ||||
Interest expense | 23 | 11 | 109 | % | ||||
Net interest | (13 | ) | 7 | N/M | ||||
Net revenues | 1,643 | 1,409 | 17 | % | ||||
Compensation and benefits | 730 | 576 | 27 | % | ||||
Non-compensation expenses | 540 | 545 | (1 | )% | ||||
Total non-interest expenses | 1,270 | 1,121 | 13 | % | ||||
Income from continuing operations before income taxes | $ | 373 | $ | 288 | 30 | % | ||
Provision for income taxes | 77 | 55 | 40 | % | ||||
Net income | 296 | 233 | 27 | % | ||||
Net income applicable to noncontrolling interests | 32 | 2 | N/M | |||||
Net income applicable to Morgan Stanley | $ | 264 | $ | 231 | 14 | % |
September 2019 Form 10-Q | 14 |
Management’s Discussion and Analysis |
$ in billions | At June 30, 2019 | Inflows | Outflows | Market Impact | At September 30, 2019 | ||||||||||
Separately managed1 | $ | 296 | $ | 15 | $ | (5 | ) | $ | 6 | $ | 312 | ||||
Unified managed2 | 292 | 12 | (10 | ) | 1 | 295 | |||||||||
Advisor | 149 | 7 | (8 | ) | — | 148 | |||||||||
Portfolio manager | 400 | 19 | (14 | ) | 2 | 407 | |||||||||
Subtotal | $ | 1,137 | $ | 53 | $ | (37 | ) | $ | 9 | $ | 1,162 | ||||
Cash management | 22 | 4 | (3 | ) | 1 | 24 | |||||||||
Total fee-based client assets | $ | 1,159 | $ | 57 | $ | (40 | ) | $ | 10 | $ | 1,186 |
$ in billions | At June 30, 2018 | Inflows | Outflows | Market Impact | At September 30, 2018 | ||||||||||
Separately managed1 | $ | 267 | $ | 14 | $ | (6 | ) | $ | (3 | ) | $ | 272 | |||
Unified managed2 | 279 | 12 | (9 | ) | 5 | 287 | |||||||||
Advisor | 149 | 7 | (8 | ) | 5 | 153 | |||||||||
Portfolio manager | 367 | 18 | (12 | ) | 13 | 386 | |||||||||
Subtotal | $ | 1,062 | $ | 51 | $ | (35 | ) | $ | 20 | $ | 1,098 | ||||
Cash management | 22 | 4 | (4 | ) | — | 22 | |||||||||
Total fee-based client assets | $ | 1,084 | $ | 55 | $ | (39 | ) | $ | 20 | $ | 1,120 |
$ in billions | At December 31, 2018 | Inflows | Outflows | Market Impact | At September 30, 2019 | ||||||||||
Separately managed1 | $ | 279 | $ | 38 | $ | (15 | ) | $ | 10 | $ | 312 | ||||
Unified managed2 | 257 | 35 | (30 | ) | 33 | 295 | |||||||||
Advisor | 137 | 20 | (24 | ) | 15 | 148 | |||||||||
Portfolio manager | 353 | 54 | (38 | ) | 38 | 407 | |||||||||
Subtotal | $ | 1,026 | $ | 147 | $ | (107 | ) | $ | 96 | $ | 1,162 | ||||
Cash management | 20 | 12 | (12 | ) | 4 | 24 | |||||||||
Total fee-based client assets | $ | 1,046 | $ | 159 | $ | (119 | ) | $ | 100 | $ | 1,186 |
$ in billions | At December 31, 2017 | Inflows | Outflows | Market Impact | At September 30, 2018 | ||||||||||
Separately managed1 | $ | 252 | $ | 30 | $ | (15 | ) | $ | 5 | $ | 272 | ||||
Unified managed2 | 271 | 36 | (25 | ) | 5 | 287 | |||||||||
Advisor | 149 | 22 | (22 | ) | 4 | 153 | |||||||||
Portfolio manager | 353 | 55 | (31 | ) | 9 | 386 | |||||||||
Subtotal | $ | 1,025 | $ | 143 | $ | (93 | ) | $ | 23 | $ | 1,098 | ||||
Cash management | 20 | 14 | (12 | ) | — | 22 | |||||||||
Total fee-based client assets | $ | 1,045 | $ | 157 | $ | (105 | ) | $ | 23 | $ | 1,120 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||
Fee rate in bps | 2019 | 2018 | 2019 | 2018 | ||||
Separately managed | 15 | 15 | 15 | 16 | ||||
Unified managed2 | 99 | 98 | 100 | 99 | ||||
Advisor | 86 | 84 | 87 | 84 | ||||
Portfolio manager | 96 | 95 | 95 | 95 | ||||
Subtotal | 74 | 75 | 74 | 76 | ||||
Cash management | 6 | 6 | 6 | 6 | ||||
Total fee-based client assets | 73 | 74 | 73 | 74 |
1. | Includes non-custody account values reflecting prior quarter-end balances due to a lag in the reporting of asset values by third-party custodians. |
2. | Includes Mutual fund advisory accounts. Prior periods have been recast to conform to the current presentation. |
3. | The calculation of average fee rates was changed in the current year period to more closely align with the recognition of the related fee revenue. Prior period rates were not changed due to immateriality. |
15 | September 2019 Form 10-Q |
Management’s Discussion and Analysis |
Three Months Ended September 30, | ||||||||
$ in millions | 2019 | 2018 | % Change | |||||
Revenues | ||||||||
Investment banking | $ | — | $ | — | ―% | |||
Trading | 2 | 2 | ―% | |||||
Investments | 105 | 40 | 163 | % | ||||
Commissions and fees | 1 | — | N/M | |||||
Asset management | 664 | 604 | 10 | % | ||||
Other | — | (3 | ) | 100 | % | |||
Total non-interest revenues | 772 | 643 | 20 | % | ||||
Interest income | 4 | 19 | (79 | )% | ||||
Interest expense | 12 | 9 | 33 | % | ||||
Net interest | (8 | ) | 10 | (180 | )% | |||
Net revenues | 764 | 653 | 17 | % | ||||
Compensation and benefits | 319 | 269 | 19 | % | ||||
Non-compensation expenses | 280 | 282 | (1 | )% | ||||
Total non-interest expenses | 599 | 551 | 9 | % | ||||
Income from continuing operations before income taxes | $ | 165 | $ | 102 | 62 | % | ||
Provision for income taxes | 27 | 18 | 50 | % | ||||
Income from continuing operations | 138 | 84 | 64 | % | ||||
Income (loss) from discontinued operations, net of income taxes | — | 2 | (100 | )% | ||||
Net income | 138 | 86 | 60 | % | ||||
Net income applicable to noncontrolling interests | — | 6 | (100 | )% | ||||
Net income applicable to Morgan Stanley | $ | 138 | $ | 80 | 73 | % |
Nine Months Ended September 30, | ||||||||
$ in millions | 2019 | 2018 | % Change | |||||
Revenues | ||||||||
Investment banking | $ | (1 | ) | $ | — | N/M | ||
Trading | (2 | ) | 23 | (109 | )% | |||
Investments | 543 | 172 | N/M | |||||
Commissions and fees | 1 | — | N/M | |||||
Asset management | 1,893 | 1,840 | 3 | % | ||||
Other | (6 | ) | 10 | (160 | )% | |||
Total non-interest revenues | 2,428 | 2,045 | 19 | % | ||||
Interest income | 14 | 37 | (62 | )% | ||||
Interest expense | 35 | 20 | 75 | % | ||||
Net interest | (21 | ) | 17 | N/M | ||||
Net revenues | 2,407 | 2,062 | 17 | % | ||||
Compensation and benefits | 1,049 | 845 | 24 | % | ||||
Non-compensation expenses | 820 | 827 | (1 | )% | ||||
Total non-interest expenses | 1,869 | 1,672 | 12 | % | ||||
Income from continuing operations before income taxes | $ | 538 | $ | 390 | 38 | % | ||
Provision for income taxes | 104 | 73 | 42 | % | ||||
Income from continuing operations | 434 | 317 | 37 | % | ||||
Income (loss) from discontinued operations, net of income taxes | — | 2 | (100 | )% | ||||
Net income | 434 | 319 | 36 | % | ||||
Net income applicable to noncontrolling interests | 32 | 8 | N/M | |||||
Net income applicable to Morgan Stanley | $ | 402 | $ | 311 | 29 | % |
September 2019 Form 10-Q | 16 |
Management’s Discussion and Analysis |
$ in billions | At March 31, 2019 | Inflows | Outflows | Market Impact | Other | At June 30, 2019 | At June 30, 2019 | Inflows | Outflows | Market Impact | Other | At September 30, 2019 | ||||||||||||||||||||||||
Equity | $ | 120 | $ | 9 | $ | (7 | ) | $ | 6 | $ | — | $ | 128 | $ | 128 | $ | 10 | $ | (8 | ) | $ | (4 | ) | $ | — | $ | 126 | |||||||||
Fixed income | 68 | 5 | (4 | ) | 2 | — | 71 | 71 | 6 | (4 | ) | 2 | (1 | ) | 74 | |||||||||||||||||||||
Alternative/Other | 133 | 7 | (6 | ) | 1 | — | 135 | 135 | 5 | (4 | ) | 2 | (3 | ) | 135 | |||||||||||||||||||||
Long-term AUM subtotal | 321 | 21 | (17 | ) | 9 | — | 334 | 334 | 21 | (16 | ) | — | (4 | ) | 335 | |||||||||||||||||||||
Liquidity | 159 | 311 | (307 | ) | 1 | (1 | ) | 163 | 163 | 311 | (301 | ) | (1 | ) | — | 172 | ||||||||||||||||||||
Total AUM | $ | 480 | $ | 332 | $ | (324 | ) | $ | 10 | $ | (1 | ) | $ | 497 | $ | 497 | $ | 332 | $ | (317 | ) | $ | (1 | ) | $ | (4 | ) | $ | 507 | |||||||
Shares of minority stake assets | 6 | 6 | 6 | 6 |
$ in billions | At March 31, 2018 | Inflows | Outflows | Market Impact | Other | At June 30, 2018 | At June 30, 2018 | Inflows | Outflows | Market Impact | Other | At September 30, 2018 | ||||||||||||||||||||||||
Equity | $ | 109 | $ | 10 | $ | (7 | ) | $ | 3 | $ | (1 | ) | $ | 114 | $ | 114 | $ | 10 | $ | (9 | ) | $ | 3 | $ | (1 | ) | $ | 117 | ||||||||
Fixed income | 72 | 7 | (7 | ) | (1 | ) | (2 | ) | 69 | 69 | 6 | (4 | ) | — | — | 71 | ||||||||||||||||||||
Alternative/Other | 131 | 6 | (4 | ) | 1 | (2 | ) | 132 | 132 | 5 | (4 | ) | 1 | (1 | ) | 133 | ||||||||||||||||||||
Long-term AUM subtotal | 312 | 23 | (18 | ) | 3 | (5 | ) | 315 | 315 | 21 | (17 | ) | 4 | (2 | ) | 321 | ||||||||||||||||||||
Liquidity | 157 | 375 | (373 | ) | 1 | (1 | ) | 159 | 159 | 313 | (322 | ) | 1 | (1 | ) | 150 | ||||||||||||||||||||
Total AUM | 469 | 398 | (391 | ) | 4 | (6 | ) | 474 | $ | 474 | $ | 334 | $ | (339 | ) | $ | 5 | $ | (3 | ) | $ | 471 | ||||||||||||||
Shares of minority stake assets | 7 | 7 | 7 | 7 |
$ in billions | At December 31, 2018 | Inflows | Outflows | Market Impact | Other | At September 30, 2019 | ||||||||||||
Equity | $ | 103 | $ | 28 | $ | (23 | ) | $ | 18 | $ | — | $ | 126 | |||||
Fixed income | 68 | 17 | (15 | ) | 5 | (1 | ) | 74 | ||||||||||
Alternative/Other | 128 | 17 | (14 | ) | 8 | (4 | ) | 135 | ||||||||||
Long-term AUM subtotal | 299 | 62 | (52 | ) | 31 | (5 | ) | 335 | ||||||||||
Liquidity | 164 | 965 | (956 | ) | 1 | (2 | ) | 172 | ||||||||||
Total AUM | $ | 463 | $ | 1,027 | $ | (1,008 | ) | $ | 32 | $ | (7 | ) | $ | 507 | ||||
Shares of minority stake assets | 7 | 6 |
$ in billions | At December 31, 2018 | Inflows | Outflows | Market Impact | Other | At June 30, 2019 | ||||||||||||
Equity | $ | 103 | $ | 18 | $ | (15 | ) | $ | 22 | $ | — | $ | 128 | |||||
Fixed income | 68 | 11 | (11 | ) | 3 | — | 71 | |||||||||||
Alternative/Other | 128 | 12 | (10 | ) | 6 | (1 | ) | 135 | ||||||||||
Long-term AUM subtotal | 299 | 41 | (36 | ) | 31 | (1 | ) | 334 | ||||||||||
Liquidity | 164 | 654 | (655 | ) | 2 | (2 | ) | 163 | ||||||||||
Total AUM | $ | 463 | $ | 695 | $ | (691 | ) | $ | 33 | $ | (3 | ) | $ | 497 | ||||
Shares of minority stake assets | 7 | 6 |
$ in billions | At December 31, 2017 | Inflows | Outflows | Market Impact | Other1 | At September 30, 2018 | ||||||||||||
Equity | $ | 105 | $ | 30 | $ | (23 | ) | $ | 6 | $ | (1 | ) | $ | 117 | ||||
Fixed income | 73 | 20 | (20 | ) | (1 | ) | (1 | ) | 71 | |||||||||
Alternative/Other | 128 | 16 | (13 | ) | 2 | — | 133 | |||||||||||
Long-term AUM subtotal | 306 | 66 | (56 | ) | 7 | (2 | ) | 321 | ||||||||||
Liquidity | 176 | 1,013 | (1,039 | ) | 2 | (2 | ) | 150 | ||||||||||
Total AUM | $ | 482 | $ | 1,079 | $ | (1,095 | ) | $ | 9 | $ | (4 | ) | $ | 471 | ||||
Shares of minority stake assets | 7 | 7 |
$ in billions | At December 31, 2017 | Inflows | Outflows | Market Impact | Other1 | At June 30, 2018 | ||||||||||||
Equity | $ | 105 | $ | 20 | $ | (14 | ) | $ | 3 | $ | — | $ | 114 | |||||
Fixed income | 73 | 14 | (16 | ) | (1 | ) | (1 | ) | 69 | |||||||||
Alternative/Other | 128 | 11 | (9 | ) | 1 | 1 | 132 | |||||||||||
Long-term AUM subtotal | 306 | 45 | (39 | ) | 3 | — | 315 | |||||||||||
Liquidity | 176 | 700 | (717 | ) | 1 | (1 | ) | 159 | ||||||||||
Total AUM | 482 | 745 | (756 | ) | 4 | (1 | ) | 474 | ||||||||||
Shares of minority stake assets | 7 | 7 |
1. | Includes the impact of the Mesa West Capital, LLC acquisition. |
Three Months Ended June 30, | Six Months Ended June 30, | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||
$ in billions | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||
Equity | $ | 123 | $ | 111 | $ | 117 | $ | 110 | $ | 127 | $ | 116 | $ | 120 | $ | 112 | ||||||||
Fixed income | 69 | 71 | 69 | 72 | 73 | 70 | 70 | 72 | ||||||||||||||||
Alternative/Other | 134 | 131 | 132 | 130 | 135 | 133 | 133 | 131 | ||||||||||||||||
Long-term AUM subtotal | 326 | 313 | 318 | 312 | 335 | 319 | 323 | 315 | ||||||||||||||||
Liquidity | 163 | 161 | 164 | 163 | 169 | 153 | 166 | 159 | ||||||||||||||||
Total AUM | $ | 489 | 474 | $ | 482 | 475 | $ | 504 | 472 | $ | 489 | 474 | ||||||||||||
Shares of minority stake assets | 6 | 7 | 6 | 7 | 6 | 7 | 6 | 7 |
Three Months Ended June 30, | Six Months Ended June 30, | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||
Fee rate in bps | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||
Equity | 75 | 77 | 76 | 76 | 76 | 76 | 76 | 76 | ||||
Fixed income | 33 | 33 | 32 | 34 | 32 | 33 | 32 | 34 | ||||
Alternative/Other | 64 | 67 | 66 | 67 | 62 | 65 | 65 | 67 | ||||
Long-term AUM | 62 | 63 | 62 | 63 | 61 | 62 | 62 | 62 | ||||
Liquidity | 17 | 18 | 17 | 18 | 17 | 17 | 17 | 18 | ||||
Total AUM | 47 | 47 | 47 | 47 | 46 | 47 | 47 | 47 |
17 |
Management’s Discussion and Analysis |
Three Months Ended June 30, | Six Months Ended June 30, | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||
$ in millions | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||
U.S. GAAP | 22.6 | % | 20.6 | % | 19.5 | % | 20.7 | % | 18.2 | % | 24.4 | % | 19.1 | % | 21.9 | % | ||||||||
Adjusted effective income tax rate—non-GAAP1 | 22.6 | % | 23.4 | % | 21.3 | % | 22.1 | % | 21.4 | % | 24.6 | % | 21.3 | % | 22.8 | % | ||||||||
Net discrete tax provisions/(benefits) | Net discrete tax provisions/(benefits) | Net discrete tax provisions/(benefits) | ||||||||||||||||||||||
Recurring2 | $ | (20 | ) | $ | (17 | ) | $ | (127 | ) | $ | (164 | ) | $ | — | $ | — | $ | (127 | ) | $ | (164 | ) | ||
Intermittent3 | $ | — | $ | (88 | ) | $ | (101 | ) | $ | (88 | ) | $ | (89 | ) | $ | (4 | ) | $ | (190 | ) | $ | (92 | ) |
1. |
2. |
3. | Includes all tax provisions (benefits) that have been determined to be discrete, other than Recurring items as defined above. |
$ in billions | At June 30, 2019 | At December 31, 2018 | At September 30, 2019 | At December 31, 2018 | ||||||||
Assets | $ | 205.9 | $ | 216.9 | $ | 211.0 | $ | 216.9 | ||||
Investment securities portfolio: | ||||||||||||
Investment securities—AFS | 43.5 | 45.5 | 44.0 | 45.5 | ||||||||
Investment securities—HTM | 27.2 | 23.7 | 26.7 | 23.7 | ||||||||
Total investment securities | $ | 70.7 | $ | 69.2 | $ | 70.7 | $ | 69.2 | ||||
Deposits2 | $ | 175.8 | $ | 187.1 | $ | 179.6 | $ | 187.1 | Wealth Management Loans | |||
Securities-based lending and other3 | $ | 45.5 | $ | 44.7 | $ | 47.4 | $ | 44.7 | ||||
Residential real estate | 28.6 | 27.5 | 29.2 | 27.5 | ||||||||
Total | $ | 74.1 | $ | 72.2 | $ | 76.6 | $ | 72.2 | ||||
Institutional Securities Loans4 | Institutional Securities Loans4 | Institutional Securities Loans4 | ||||||||||
Corporate5: | ||||||||||||
Corporate relationship and event-driven lending | $ | 6.6 | $ | 7.4 | $ | 6.9 | $ | 7.4 | ||||
Secured lending facilities | 22.2 | 17.5 | 25.0 | 17.5 | ||||||||
Securities-based lending and other | 6.2 | 6.0 | 5.7 | 6.0 | ||||||||
Commercial and residential real estate | 10.7 | 10.5 | 9.8 | 10.5 | ||||||||
Total | $ | 45.7 | $ | 41.4 | $ | 47.4 | $ | 41.4 |
1. | Amounts exclude transactions between the bank subsidiaries, as well as deposits from the Parent Company and affiliates. |
2. | For further information on deposits, see “Liquidity and Capital Resources—Funding Management—Unsecured Financing” herein. |
3. | Other loans primarily include tailored lending. |
4. | Prior periods have been conformed to the current presentation. |
5. | For a further discussion of corporate loans in the Institutional Securities business segment, see “Credit Risk—Institutional Securities Corporate Loans” herein. |
• | Financial Instruments–Credit Losses. This accounting update impacts the impairment model for certain financial assets measured at amortized cost by requiring a CECL methodology to estimate expected credit losses over the entire life of the financial asset, recorded at inception or purchase. CECL will replace the loss model currently applicable to loans held for investment, HTM securities and |
18 |
Management’s Discussion and Analysis |
At June 30, 2019 | At September 30, 2019 | |||||||||||||||||||||||
$ in millions | IS | WM | IM | Total | IS | WM | IM | Total | ||||||||||||||||
Assets | ||||||||||||||||||||||||
Cash and cash equivalents1 | $ | 69,135 | $ | 10,394 | $ | 51 | $ | 79,580 | $ | 68,089 | $ | 11,453 | $ | 114 | $ | 79,656 | ||||||||
Trading assets at fair value | 284,145 | 57 | 2,763 | 286,965 | 274,602 | 54 | 2,767 | 277,423 | ||||||||||||||||
Investment securities | 33,281 | 69,785 | — | 103,066 | 36,020 | 69,770 | — | 105,790 | ||||||||||||||||
Securities purchased under agreements to resell | 78,623 | 6,775 | — | 85,398 | 86,177 | 7,190 | — | 93,367 | ||||||||||||||||
Securities borrowed | 133,340 | 240 | — | 133,580 | 132,123 | 278 | — | 132,401 | ||||||||||||||||
Customer and other receivables | 37,348 | 15,406 | 627 | 53,381 | 44,036 | 14,830 | 648 | 59,514 | ||||||||||||||||
Loans, net of allowance2 | 46,822 | 74,074 | 5 | 120,901 | 48,952 | 76,565 | 5 | 125,522 | ||||||||||||||||
Other assets3 | 14,054 | 13,080 | 1,954 | 29,088 | 13,869 | 13,073 | 1,989 | 28,931 | ||||||||||||||||
Total assets | $ | 696,748 | $ | 189,811 | $ | 5,400 | $ | 891,959 | $ | 703,868 | $ | 193,213 | $ | 5,523 | $ | 902,604 |
19 |
Management’s Discussion and Analysis |
At December 31, 2018 | ||||||||||||
$ in millions | IS | WM | IM | Total | ||||||||
Assets | ||||||||||||
Cash and cash equivalents1 | $ | 69,526 | $ | 17,621 | $ | 49 | $ | 87,196 | ||||
Trading assets at fair value | 263,870 | 60 | 2,369 | 266,299 | ||||||||
Investment securities | 23,273 | 68,559 | — | 91,832 | ||||||||
Securities purchased under agreements to resell | 80,660 | 17,862 | — | 98,522 | ||||||||
Securities borrowed | 116,207 | 106 | — | 116,313 | ||||||||
Customer and other receivables | 35,777 | 16,865 | 656 | 53,298 | ||||||||
Loans, net of allowance2 | 43,380 | 72,194 | 5 | 115,579 | ||||||||
Other assets3 | 13,734 | 9,125 | 1,633 | 24,492 | ||||||||
Total assets | $ | 646,427 | $ | 202,392 | $ | 4,712 | $ | 853,531 |
1. | Cash and cash equivalents includes Cash and due from banks, Interest bearing deposits with banks and Restricted cash. |
2. | Amounts include loans held for investment (net of allowance) and loans held for sale but exclude loans at fair value, which are included in Trading assets in the balance sheets (see Note 7 to the financial statements). |
3. | Other assets primarily includes Goodwill and Intangible assets, premises, equipment and software, |
$ in millions | At June 30, 2019 | At December 31, 2018 | At September 30, 2019 | At December 31, 2018 | ||||||||
Cash deposits with banks1 | $ | 10,195 | $ | 10,441 | $ | 12,026 | $ | 10,441 | ||||
Cash deposits with central banks1 | 33,694 | 36,109 | 32,177 | 36,109 | ||||||||
Unencumbered highly liquid securities: | ||||||||||||
U.S. government obligations | 99,639 | 119,138 | 102,083 | 119,138 | ||||||||
U.S. agency and agency mortgage-backed securities | 44,051 | 41,473 | 47,568 | 41,473 | ||||||||
Non-U.S. sovereign obligations2 | 31,072 | 39,869 | 30,317 | 39,869 | ||||||||
Other investment grade securities | 3,141 | 2,705 | 2,752 | 2,705 | ||||||||
Total | $ | 221,792 | $ | 249,735 | $ | 226,923 | $ | 249,735 |
1. | Included in Cash and due from banks and Interest bearing deposits with banks in the balance sheets. |
2. | Primarily composed of unencumbered Japanese, U.K., French, German and Brazilian government obligations. |
$ in millions | At June 30, 2019 | At December 31, 2018 | Average Daily Balance Three Months Ended June 30, 2019 | At September 30, 2019 | At December 31, 2018 | Average Daily Balance Three Months Ended September 30, 2019 | ||||||||||||
Bank legal entities | Bank legal entities | |||||||||||||||||
Domestic | $ | 72,760 | $ | 88,809 | $ | 74,661 | $ | 74,227 | $ | 88,809 | $ | 75,436 | ||||||
Foreign | 5,304 | 4,896 | 4,727 | 5,412 | 4,896 | 5,163 | ||||||||||||
Total Bank legal entities | 78,064 | 93,705 | 79,388 | 79,639 | 93,705 | 80,599 | ||||||||||||
Non-Bank legal entities | Non-Bank legal entities | Non-Bank legal entities | ||||||||||||||||
Domestic: | ||||||||||||||||||
Parent Company | 53,143 | 64,262 | 53,725 | 57,882 | 64,262 | 58,023 | ||||||||||||
Non-Parent Company | 36,048 | 40,936 | 42,703 | 32,121 | 40,936 | 34,210 | ||||||||||||
Total Domestic | 89,191 | 105,198 | 96,428 | 90,003 | 105,198 | 92,233 | ||||||||||||
Foreign | 54,537 | 50,832 | 53,142 | 57,281 | 50,832 | 54,202 | ||||||||||||
Total Non-Bank legal entities | 143,728 | 156,030 | 149,570 | 147,284 | 156,030 | 146,435 | ||||||||||||
Total | $ | 221,792 | $ | 249,735 | $ | 228,958 | $ | 226,923 | $ | 249,735 | $ | 227,034 |
20 |
Management’s Discussion and Analysis |
Average Daily Balance Three Months Ended | Average Daily Balance Three Months Ended | |||||||||||
$ in millions | June 30, 2019 | March 31, 2019 | September 30, 2019 | June 30, 2019 | ||||||||
HQLA | ||||||||||||
Cash deposits with central banks | $ | 32,552 | $ | 37,070 | $ | 33,053 | $ | 32,552 | ||||
Securities1 | 141,613 | 155,713 | 141,806 | 141,613 | ||||||||
Total | $ | 174,165 | $ | 192,783 | $ | 174,859 | $ | 174,165 | ||||
LCR | 154 | % | 150 | % | 140 | % | 154 | % |
1. | Primarily includes U.S. Treasuries, U.S. agency mortgage-backed securities, sovereign bonds and investment grade corporate bonds. |
$ in millions | At June 30, 2019 | At December 31, 2018 | At September 30, 2019 | At December 31, 2018 | ||||||||
Securities purchased under agreements to resell and Securities borrowed | $ | 218,978 | $ | 214,835 | $ | 225,768 | $ | 214,835 | ||||
Securities sold under agreements to repurchase and Securities loaned | $ | 72,619 | $ | 61,667 | $ | 69,153 | $ | 61,667 | ||||
Securities received as collateral1 | $ | 7,208 | $ | 7,668 | $ | 7,785 | $ | 7,668 |
Average Daily Balance Three Months Ended | Average Daily Balance Three Months Ended | |||||||||||
$ in millions | June 30, 2019 | December 31, 2018 | September 30, 2019 | December 31, 2018 | ||||||||
Securities purchased under agreements to resell and Securities borrowed | $ | 221,939 | $ | 213,974 | $ | 223,449 | $ | 213,974 | ||||
Securities sold under agreements to repurchase and Securities loaned | $ | 66,610 | $ | 57,677 | $ | 66,446 | $ | 57,677 |
1. | Securities received as collateral are included in Trading assets in the balance sheets. |
21 |
Management’s Discussion and Analysis |
$ in millions | At June 30, 2019 | At December 31, 2018 | At September 30, 2019 | At December 31, 2018 | ||||||||
Savings and demand deposits: | ||||||||||||
Brokerage sweep deposits1 | $ | 117,252 | $ | 141,255 | $ | 116,649 | $ | 141,255 | ||||
Savings and other | 20,762 | 13,642 | 24,695 | 13,642 | ||||||||
Total Savings and demand deposits | 138,014 | 154,897 | 141,344 | 154,897 | ||||||||
Time deposits | 38,579 | 32,923 | 39,394 | 32,923 | ||||||||
Total | $ | 176,593 | $ | 187,820 | $ | 180,738 | $ | 187,820 |
1. | Amounts represent balances swept from client brokerage accounts. |
$ in millions | Parent Company | Subsidiaries | Total | Parent Company | Subsidiaries | Total | ||||||||||||
Original maturities of one year or less | $ | — | $ | 1,776 | $ | 1,776 | $ | — | $ | 1,297 | $ | 1,297 | Original maturities greater than one year | |||||
2019 | $ | 10,692 | $ | 3,015 | $ | 13,707 | $ | 3,224 | $ | 1,724 | $ | 4,948 | ||||||
2020 | 15,804 | 4,386 | 20,190 | 15,942 | 4,853 | 20,795 | ||||||||||||
2021 | 21,533 | 4,048 | 25,581 | 21,310 | 4,261 | 25,571 | ||||||||||||
2022 | 16,157 | 2,875 | 19,032 | 15,983 | 3,173 | 19,156 | ||||||||||||
2023 | 11,820 | 2,769 | 14,589 | 11,766 | 2,779 | 14,545 | ||||||||||||
Thereafter | 80,421 | 22,552 | 102,973 | 83,535 | 23,812 | 107,347 | ||||||||||||
Total | $ | 156,427 | $ | 39,645 | $ | 196,072 | $ | 151,760 | $ | 40,602 | $ | 192,362 | ||||||
Total Borrowings | $ | 156,427 | $ | 41,421 | $ | 197,848 | $ | 151,760 | $ | 41,899 | $ | 193,659 | ||||||
Maturities over next 12 months2 | 26,621 | $ | 23,498 |
1. | Original maturity in the table is generally based on contractual final maturity. For borrowings with put options, remaining maturity represents the earliest put date. |
2. | Includes only borrowings with original maturities greater than one year. |
Parent Company | |||
Short-Term Debt | Long-Term Debt | Rating Outlook | |
DBRS, Inc. | R-1 (middle) | A (high) | Stable |
Fitch Ratings, Inc. | F1 | A | Stable |
Moody’s Investors Service, Inc. | P-2 | A3 | Stable |
Rating and Investment Information, Inc. | a-1 | A- | Positive |
S&P Global Ratings | A-2 | BBB+ | Stable |
MSBNA | |||
Short-Term Debt | Long-Term Debt | Rating Outlook | |
Fitch Ratings, Inc. | F1 | A+ | Stable |
Moody’s Investors Service, Inc. | P-1 | A1 | Stable |
S&P Global Ratings | A-1 | A+ | Stable |
September 2019 Form 10-Q | 22 |
Management’s Discussion and Analysis |
MSPBNA | |||
Short-Term Debt | Long-Term Debt | Rating Outlook | |
Moody’s Investors Service, Inc. | P-1 | A1 | Stable |
S&P Global Ratings | A-1 | A+ | Stable |
Three Months Ended June 30, | Six Months Ended June 30, | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||
in millions, except for per share data | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||
Number of shares | 26 | 24 | 54 | 46 | 36 | 24 | 90 | 70 | ||||||||||||||||
Average price per share | $ | 44.53 | $ | 52.43 | $ | 43.33 | $ | 54.15 | $ | 41.92 | $ | 49.33 | $ | 42.77 | $ | 52.51 | ||||||||
Total | $ | 1,180 | $ | 1,250 | $ | 2,360 | $ | 2,500 | $ | 1,500 | $ | 1,180 | $ | 3,860 | $ | 3,680 |
Announcement date | |||
Amount per share | $0.35 | ||
Date to be paid | |||
Shareholders of record as of |
Announcement date | |
Date paid | |
Shareholders of record as of |
23 |
Management’s Discussion and Analysis |
24 |
Management’s Discussion and Analysis |
At June 30, 2019 | At September 30, 2019 | |||||||||||||||
$ in millions | Required Ratio1 | Standardized | Advanced | Required Ratio1 | Standardized | Advanced | ||||||||||
Risk-based capital | ||||||||||||||||
Common Equity Tier 1 capital | $ | 64,011 | $ | 64,011 | $ | 64,348 | $ | 64,348 | ||||||||
Tier 1 capital | 72,742 | 72,742 | 72,937 | 72,937 | ||||||||||||
Total capital | 82,322 | 82,059 | 82,661 | 82,397 | ||||||||||||
Total RWA | 391,509 | 384,005 | 394,875 | 387,424 | ||||||||||||
Common Equity Tier 1 capital ratio | 10.0 | % | 16.3 | % | 16.7 | % | 10.0 | % | 16.3 | % | 16.6 | % | ||||
Tier 1 capital ratio | 11.5 | % | 18.6 | % | 18.9 | % | 11.5 | % | 18.5 | % | 18.8 | % | ||||
Total capital ratio | 13.5 | % | 21.0 | % | 21.4 | % | 13.5 | % | 20.9 | % | 21.3 | % | ||||
$ in millions | Required Ratio1 | At September 30, 2019 | ||||||||||||||
Leverage-based capital | ||||||||||||||||
Adjusted average assets2 | $ | 868,494 | N/A- | $ | 892,912 | |||||||||||
Tier 1 leverage ratio | 4.0 | % | 8.4 | % | N/A- | 4.0 | % | 8.2 | % | |||||||
Supplementary leverage exposure3 | N/A- | $ | 1,124,645 | Supplementary leverage exposure3 | $ | 1,155,497 | ||||||||||
SLR | 5.0 | % | N/A- | 6.5 | % | 5.0 | % | 6.3 | % |
At December 31, 2018 | At December 31, 2018 | |||||||||||||||
$ in millions | Required Ratio1 | Standardized | Advanced | Required Ratio1 | Standardized | Advanced | ||||||||||
Risk-based capital | ||||||||||||||||
Common Equity Tier 1 capital | $ | 62,086 | $ | 62,086 | $ | 62,086 | $ | 62,086 | ||||||||
Tier 1 capital | 70,619 | 70,619 | 70,619 | 70,619 | ||||||||||||
Total capital | 80,052 | 79,814 | 80,052 | 79,814 | ||||||||||||
Total RWA | 367,309 | 363,054 | 367,309 | 363,054 | ||||||||||||
Common Equity Tier 1 capital ratio | 8.6 | % | 16.9 | % | 17.1 | % | 8.6 | % | 16.9 | % | 17.1 | % | ||||
Tier 1 capital ratio | 10.1 | % | 19.2 | % | 19.5 | % | 10.1 | % | 19.2 | % | 19.5 | % | ||||
Total capital ratio | 12.1 | % | 21.8 | % | 22.0 | % | 12.1 | % | 21.8 | % | 22.0 | % | ||||
$ in millions | Required Ratio1 | At December 31, 2018 | ||||||||||||||
Leverage-based capital | ||||||||||||||||
Adjusted average assets2 | $ | 843,074 | N/A- | $ | 843,074 | |||||||||||
Tier 1 leverage ratio | 4.0 | % | 8.4 | % | N/A- | 4.0 | % | 8.4 | % | |||||||
Supplementary leverage exposure3 | N/A- | $ | 1,092,672 | Supplementary leverage exposure3 | $ | 1,092,672 | ||||||||||
SLR | 5.0 | % | N/A- | 6.5 | % | 5.0 | % | 6.5 | % |
1. | Required ratios are inclusive of any buffers applicable as of the date presented. For 2018, the minimum required regulatory capital ratios for risk-based capital are under the transitional rules. |
2. | Adjusted average assets represents the denominator of the Tier 1 leverage ratio and is composed of the average daily balance of consolidated on-balance sheet assets during the quarters ended |
3. | Supplementary leverage exposure is the sum of Adjusted average assets used in the Tier 1 leverage ratio and other adjustments, primarily (i) for derivatives: potential future exposure and the effective notional principal amount of sold credit protection offset by qualifying purchased credit protection; (ii) the counterparty credit risk for repo-style transactions; and (iii) the credit equivalent amount for off-balance sheet exposures. |
$ in millions | At June 30, 2019 | At December 31, 2018 | Change | At September 30, 2019 | At December 31, 2018 | Change | ||||||||||||
Common Equity Tier 1 capital | ||||||||||||||||||
Common stock and surplus | $ | 7,667 | $ | 9,843 | $ | (2,176 | ) | $ | 6,389 | $ | 9,843 | $ | (3,454 | ) | ||||
Retained earnings | 67,588 | 64,175 | 3,413 | 69,071 | 64,175 | 4,896 | ||||||||||||
AOCI | (2,051 | ) | (2,292 | ) | 241 | (1,598 | ) | (2,292 | ) | 694 | ||||||||
Regulatory adjustments and deductions: | ||||||||||||||||||
Net goodwill | (7,122 | ) | (6,661 | ) | (461 | ) | (7,090 | ) | (6,661 | ) | (429 | ) | ||||||
Net intangible assets (other than goodwill and mortgage servicing assets) | (2,171 | ) | (2,158 | ) | (13 | ) | (2,104 | ) | (2,158 | ) | 54 | |||||||
Other adjustments and deductions1 | 100 | (821 | ) | 921 | (320 | ) | (821 | ) | 501 | |||||||||
Total Common Equity Tier 1 capital | $ | 64,011 | $ | 62,086 | $ | 1,925 | $ | 64,348 | $ | 62,086 | $ | 2,262 | ||||||
Additional Tier 1 capital | ||||||||||||||||||
Preferred stock | $ | 8,520 | $ | 8,520 | $ | — | $ | 8,520 | $ | 8,520 | $ | — | ||||||
Noncontrolling interests | 627 | 454 | 173 | 483 | 454 | 29 | ||||||||||||
Additional Tier 1 capital | $ | 9,147 | $ | 8,974 | $ | 173 | $ | 9,003 | $ | 8,974 | $ | 29 | ||||||
Deduction for investments in covered funds | (416 | ) | (441 | ) | 25 | (414 | ) | (441 | ) | 27 | ||||||||
Total Tier 1 capital | $ | 72,742 | $ | 70,619 | $ | 2,123 | $ | 72,937 | $ | 70,619 | $ | 2,318 | ||||||
Standardized Tier 2 capital | ||||||||||||||||||
Subordinated debt | $ | 8,948 | $ | 8,923 | $ | 25 | $ | 9,080 | $ | 8,923 | $ | 157 | ||||||
Noncontrolling interests | 148 | 107 | 41 | 114 | 107 | 7 | ||||||||||||
Eligible allowance for credit losses | 486 | 440 | 46 | 531 | 440 | 91 | ||||||||||||
Other adjustments and deductions | (2 | ) | (37 | ) | 35 | (1 | ) | (37 | ) | 36 | ||||||||
Total Standardized Tier 2 capital | $ | 9,580 | $ | 9,433 | $ | 147 | $ | 9,724 | $ | 9,433 | $ | 291 | ||||||
Total Standardized capital | $ | 82,322 | $ | 80,052 | $ | 2,270 | $ | 82,661 | $ | 80,052 | $ | 2,609 | ||||||
Advanced Tier 2 capital | ||||||||||||||||||
Subordinated debt | $ | 8,948 | $ | 8,923 | $ | 25 | $ | 9,080 | $ | 8,923 | $ | 157 | ||||||
Noncontrolling interests | 148 | 107 | 41 | 114 | 107 | 7 | ||||||||||||
Eligible credit reserves | 223 | 202 | 21 | 267 | 202 | 65 | ||||||||||||
Other adjustments and deductions | (2 | ) | (37 | ) | 35 | (1 | ) | (37 | ) | 36 | ||||||||
Total Advanced Tier 2 capital | $ | 9,317 | $ | 9,195 | $ | 122 | $ | 9,460 | $ | 9,195 | $ | 265 | ||||||
Total Advanced capital | $ | 82,059 | $ | 79,814 | $ | 2,245 | $ | 82,397 | $ | 79,814 | $ | 2,583 |
1. | Other adjustments and deductions used in the calculation of Common Equity Tier 1 capital primarily includes net after-tax DVA, the credit spread premium over risk-free rate for derivative liabilities, defined benefit pension plan assets, after-tax gain on sale from assets sold into securitizations, investments in our own capital instruments and certain deferred tax assets. |
25 |
Management’s Discussion and Analysis |
Six Months Ended June 30, 2019 | Nine Months Ended September 30, 2019 | |||||||||||
$ in millions | Standardized | Advanced | Standardized | Advanced | ||||||||
Credit risk RWA | ||||||||||||
Beginning balance | $ | 305,531 | $ | 190,595 | $ | 305,531 | $ | 190,595 | ||||
Change related to the following items: | ||||||||||||
Derivatives | 5,621 | 10,960 | 9,202 | 20,346 | ||||||||
Securities financing transactions | 10,650 | 2,338 | 11,788 | 1,093 | ||||||||
Securitizations | 1,890 | 2,309 | 2,210 | 2,831 | ||||||||
Investment securities | 1,812 | 3,831 | 2,103 | 4,749 | ||||||||
Commitments, guarantees and loans | 5,916 | 11,836 | 5,896 | 9,564 | ||||||||
Cash | (380 | ) | (193 | ) | (364 | ) | (28 | ) | ||||
Equity investments | 1,082 | 1,138 | 818 | 852 | ||||||||
Other credit risk2 | 4,438 | 4,716 | 3,785 | 3,195 | ||||||||
Total change in credit risk RWA | $ | 31,029 | $ | 36,935 | $ | 35,438 | $ | 42,602 | ||||
Ending balance | $ | 336,560 | $ | 227,530 | $ | 340,969 | $ | 233,197 | ||||
Market risk RWA | ||||||||||||
Beginning balance | $ | 61,778 | $ | 61,857 | $ | 61,778 | $ | 61,857 | ||||
Change related to the following items: | ||||||||||||
Regulatory VaR | (249 | ) | (249 | ) | (137 | ) | (137 | ) | ||||
Regulatory stressed VaR | (5,225 | ) | (5,225 | ) | (5,417 | ) | (5,417 | ) | ||||
Incremental risk charge | (3,454 | ) | (3,454 | ) | (5,227 | ) | (5,227 | ) | ||||
Comprehensive risk measure | 34 | (34 | ) | (115 | ) | (129 | ) | |||||
Specific risk: | ||||||||||||
Non-securitizations | 2,554 | 2,554 | 3,003 | 3,003 | ||||||||
Securitizations | (489 | ) | (489 | ) | 21 | 21 | ||||||
Total change in market risk RWA | $ | (6,829 | ) | $ | (6,897 | ) | $ | (7,872 | ) | $ | (7,886 | ) |
Ending balance | $ | 54,949 | $ | 54,960 | $ | 53,906 | $ | 53,971 | ||||
Operational risk RWA | ||||||||||||
Beginning balance | N/A | $ | 110,602 | N/A | $ | 110,602 | ||||||
Change in operational risk RWA | N/A | (9,087 | ) | N/A | (10,346 | ) | ||||||
Ending balance | N/A | $ | 101,515 | N/A | $ | 100,256 | ||||||
Total RWA at June 30, 2019 | $ | 391,509 | $ | 384,005 | ||||||||
Total RWA at September 30, 2019 | $ | 394,875 | $ | 387,424 |
1. | The RWA for each category reflects both on- and off-balance sheet exposures, where appropriate. |
2. | Amount reflects assets not in a defined category, non-material portfolios of exposures and unsettled transactions, as applicable. |
At June 30, 2019 | At September 30, 2019 | |||||||||
$ in millions | Required Ratio1 | Actual Amount/Ratio | Required Ratio1 | Actual Amount/Ratio | ||||||
Total Loss-Absorbing Capacity | ||||||||||
External TLAC2 | $ | 199,569 | $ | 196,659 | ||||||
External TLAC as a % of RWA | 21.5 | % | 51.0 | % | 21.5 | % | 49.8 | % | ||
External TLAC as a % of leverage exposure | 9.5 | % | 17.7 | % | 9.5 | % | 17.0 | % | ||
Eligible LTD3 | $ | 119,138 | $ | 116,116 | ||||||
Eligible LTD as a % of RWA | 9.0 | % | 30.4 | % | 9.0 | % | 29.4 | % | ||
Eligible LTD as a % of leverage exposure | 4.5 | % | 10.6 | % | 4.5 | % | 10.0 | % |
1. | Required ratios are inclusive of applicable buffers. |
2. | External TLAC consists of Common Equity Tier 1 capital and Additional Tier 1 capital (each excluding any noncontrolling minority interests), as well as eligible LTD. |
3. | Consists of TLAC-eligible LTD reduced by 50% for amounts of unpaid principal due to be paid in more than one year but less than two years from |
September 2019 Form 10-Q | 26 |
Management’s Discussion and Analysis |
Three Months Ended June 30, | Six Months Ended June 30, | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||
$ in billions | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||
Institutional Securities | $ | 40.4 | $ | 40.8 | $ | 40.4 | $ | 40.8 | $ | 40.4 | $ | 40.8 | $ | 40.4 | $ | 40.8 | ||||||||
Wealth Management | 18.2 | 16.8 | 18.2 | 16.8 | 18.2 | 16.8 | 18.2 | 16.8 | ||||||||||||||||
Investment Management | 2.5 | 2.6 | 2.5 | 2.6 | 2.5 | 2.6 | 2.5 | 2.6 | ||||||||||||||||
Parent | 11.5 | 9.7 | 11.0 | 9.2 | 12.3 | 10.0 | 11.4 | 9.4 | ||||||||||||||||
Total | $ | 72.6 | $ | 69.9 | $ | 72.1 | $ | 69.4 | $ | 73.4 | $ | 70.2 | $ | 72.5 | $ | 69.6 |
1. | The attribution of average common equity is a non-GAAP financial measure. See “Selected Non-GAAP Financial Information” herein. |
27 |
Management’s Discussion and Analysis |
September 2019 Form 10-Q | 28 |
Management’s Discussion and Analysis |
29 |
Three Months Ended | Three Months Ended | |||||||||||||||||||||||
June 30, 2019 | September 30, 2019 | |||||||||||||||||||||||
$ in millions | Period End | Average | High2 | Low2 | Period End | Average | High2 | Low2 | ||||||||||||||||
Interest rate and credit spread | $ | 30 | $ | 31 | $ | 35 | $ | 28 | $ | 28 | $ | 27 | $ | 29 | $ | 25 | ||||||||
Equity price | 14 | 16 | 20 | 13 | 15 | 16 | 22 | 12 | ||||||||||||||||
Foreign exchange rate | 15 | 16 | 19 | 14 | 8 | 13 | 19 | 8 | ||||||||||||||||
Commodity price | 13 | 10 | 13 | 9 | 18 | 15 | 20 | 12 | ||||||||||||||||
Less: Diversification benefit1 | (32 | ) | (32 | ) | N/A | N/A | (29 | ) | (34 | ) | N/A | N/A | ||||||||||||
Primary Risk Categories | $ | 40 | $ | 41 | $ | 44 | $ | 37 | ||||||||||||||||
Primary Risk Categories3 | $ | 40 | $ | 37 | $ | 42 | $ | 33 | ||||||||||||||||
Credit Portfolio | 16 | 17 | 18 | 16 | 16 | 16 | 19 | 15 | ||||||||||||||||
Less: Diversification benefit1 | (10 | ) | (12 | ) | N/A | N/A | (14 | ) | (11 | ) | N/A | N/A | ||||||||||||
Total Management VaR | $ | 46 | $ | 46 | $ | 51 | $ | 42 | ||||||||||||||||
Total Management VaR3 | $ | 42 | $ | 42 | $ | 46 | $ | 37 |
Three Months Ended | Three Months Ended | |||||||||||||||||||||||
March 31, 2019 | June 30, 20194 | |||||||||||||||||||||||
$ in millions | Period End | Average | High2 | Low2 | Period End | Average | High2 | Low2 | ||||||||||||||||
Interest rate and credit spread | $ | 32 | $ | 32 | $ | 39 | $ | 26 | $ | 28 | $ | 29 | $ | 34 | $ | 26 | ||||||||
Equity price | 15 | 16 | 19 | 12 | 15 | 15 | 19 | 12 | ||||||||||||||||
Foreign exchange rate | 15 | 14 | 16 | 11 | 17 | 17 | 20 | 13 | ||||||||||||||||
Commodity price | 9 | 10 | 12 | 9 | 12 | 12 | 13 | 10 | ||||||||||||||||
Less: Diversification benefit1 | (32 | ) | (32 | ) | N/A | N/A | (35 | ) | (36 | ) | N/A | N/A | ||||||||||||
Primary Risk Categories | $ | 39 | $ | 40 | $ | 48 | $ | 36 | $ | 37 | $ | 37 | $ | 41 | $ | 33 | ||||||||
Credit Portfolio | 17 | 16 | 18 | 14 | 16 | 17 | 19 | 15 | ||||||||||||||||
Less: Diversification benefit1 | (12 | ) | (10 | ) | N/A | N/A | (8 | ) | (12 | ) | N/A | N/A | ||||||||||||
Total Management VaR | $ | 44 | $ | 46 | $ | 55 | $ | 42 | $ | 45 | $ | 42 | $ | 47 | $ | 39 |
1. | Diversification benefit equals the difference between the total Management VaR and the sum of the component VaRs. This benefit arises because the simulated one-day losses for each of the components occur on different days; similar diversification benefits also are taken into account within each component. |
2. | The high and low VaR values for the total Management VaR and each of the component VaRs might have occurred on different days during the quarter, and therefore, the diversification benefit is not an applicable measure. |
3. | For the current quarter, under the VaR model in place prior to July 1, 2019, Average total Management VaR was $43 million and average Management VaR for the Primary Risk Categories was $40 million. |
4. | Prior period amounts have been revised to conform to the current presentation. |
September 2019 Form 10-Q | 30 |
Risk Disclosures |
$ in millions | At June 30, 2019 | At March 31, 2019 | At September 30, 2019 | At June 30, 2019 | ||||||||
Derivatives | $ | 6 | $ | 6 | $ | 6 | $ | 6 | ||||
Funding liabilities2 | 40 | 37 | 40 | 40 |
1. | Amounts represent the potential gain for each 1 bps widening of our credit spread. |
2. | Relates to |
$ in millions | At June 30, 2019 | At March 31, 2019 | At September 30, 2019 | At June 30, 2019 | ||||||||
Basis point change | ||||||||||||
+100 | $ | 273 | $ | 274 | $ | 256 | $ | 273 | ||||
-100 | (722 | ) | (619 | ) | (751 | ) | (722 | ) |
31 |
Risk Disclosures |
Loss from 10% Decline | Loss from 10% Decline | |||||||||||
$ in millions | At June 30, 2019 | At March 31, 2019 | At September 30, 2019 | At June 30, 2019 | ||||||||
Investments related to Investment Management activities | $ | 333 | $ | 334 | $ | 341 | $ | 333 | ||||
Other investments: | ||||||||||||
MUMSS | 169 | 164 | 168 | 169 | ||||||||
Other Firm investments | 194 | 187 | 186 | 194 |
At June 30, 2019 | At September 30, 2019 | |||||||||||||||||||||||
$ in millions | IS | WM | IM1 | Total | IS | WM | IM1 | Total | ||||||||||||||||
Corporate | $ | 23,970 | $ | 16,308 | $ | 5 | $ | 40,283 | $ | 27,709 | $ | 17,403 | $ | 5 | $ | 45,117 | ||||||||
Consumer | — | 29,196 | — | 29,196 | — | 30,010 | — | 30,010 | ||||||||||||||||
Residential real estate | — | 28,595 | — | 28,595 | — | 29,184 | — | 29,184 | ||||||||||||||||
Commercial real estate | 7,336 | — | — | 7,336 | 6,801 | — | — | 6,801 | ||||||||||||||||
Loans held for investment, gross of allowance | 31,306 | 74,099 | 5 | 105,410 | 34,510 | 76,597 | 5 | 111,112 | ||||||||||||||||
Allowance for loan losses | (219 | ) | (46 | ) | — | (265 | ) | (248 | ) | (49 | ) | — | (297 | ) | ||||||||||
Loans held for investment, net of allowance | 31,087 | 74,053 | 5 | 105,145 | 34,262 | 76,548 | 5 | 110,815 | ||||||||||||||||
Corporate | 14,132 | — | — | 14,132 | 13,525 | — | — | 13,525 | ||||||||||||||||
Residential real estate | — | 21 | — | 21 | — | 17 | — | 17 | ||||||||||||||||
Commercial real estate | 1,603 | — | — | 1,603 | 1,165 | — | — | 1,165 | ||||||||||||||||
Loans held for sale | 15,735 | 21 | — | 15,756 | 14,690 | 17 | — | 14,707 | ||||||||||||||||
Corporate | 8,219 | — | 22 | 8,241 | 7,349 | — | 38 | 7,387 | ||||||||||||||||
Residential real estate | 1,274 | — | — | 1,274 | 1,206 | — | — | 1,206 | ||||||||||||||||
Commercial real estate | 1,541 | — | — | 1,541 | 1,431 | — | — | 1,431 | ||||||||||||||||
Loans held at fair value | 11,034 | — | 22 | 11,056 | 9,986 | — | 38 | 10,024 | ||||||||||||||||
Total loans | 57,856 | 74,074 | 27 | 131,957 | 58,938 | 76,565 | 43 | 135,546 | ||||||||||||||||
Lending commitments2 | 114,012 | 12,310 | — | 126,322 | 108,536 | 11,771 | — | 120,307 | ||||||||||||||||
Total loans and lending commitments2 | $ | 171,868 | $ | 86,384 | $ | 27 | $ | 258,279 | $ | 167,474 | $ | 88,336 | $ | 43 | $ | 255,853 |
At December 31, 2018 | ||||||||||||
$ in millions | IS | WM | IM1 | Total | ||||||||
Corporate | $ | 20,020 | $ | 16,884 | $ | 5 | $ | 36,909 | ||||
Consumer | — | 27,868 | — | 27,868 | ||||||||
Residential real estate | — | 27,466 | — | 27,466 | ||||||||
Commercial real estate3 | 7,810 | — | — | 7,810 | ||||||||
Loans held for investment, gross of allowance | 27,830 | 72,218 | 5 | 100,053 | ||||||||
Allowance for loan losses | (193 | ) | (45 | ) | — | (238 | ) | |||||
Loans held for investment, net of allowance | 27,637 | 72,173 | 5 | 99,815 | ||||||||
Corporate | 13,886 | — | — | 13,886 | ||||||||
Residential real estate | 1 | 21 | — | 22 | ||||||||
Commercial real estate3 | 1,856 | — | — | 1,856 | ||||||||
Loans held for sale | 15,743 | 21 | — | 15,764 | ||||||||
Corporate | 9,150 | — | 21 | 9,171 | ||||||||
Residential real estate | 1,153 | — | — | 1,153 | ||||||||
Commercial real estate3 | 601 | — | — | 601 | ||||||||
Loans held at fair value | 10,904 | — | 21 | 10,925 | ||||||||
Total loans | 54,284 | 72,194 | 26 | 126,504 | ||||||||
Lending commitments2 | 95,065 | 10,663 | — | 105,728 | ||||||||
Total loans and lending commitments2 | $ | 149,349 | $ | 82,857 | $ | 26 | $ | 232,232 |
1. | Investment Management business segment loans are |
2. | Due to the nature of our obligations under the commitments, these amounts include certain commitments participated to third parties. |
3. | Beginning in 2019, loans previously referred to as Wholesale real estate are referred to as Commercial real estate. |
32 |
Risk Disclosures |
$ in millions | At June 30, 2019 | At December 31, 2018 | At September 30, 2019 | At December 31, 2018 | ||||||||
Loans | $ | 265 | $ | 238 | $ | 297 | $ | 238 | ||||
Lending commitments | 221 | 203 | 234 | 203 | ||||||||
Total allowance for loans and lending commitments | $ | 486 | $ | 441 | $ | 531 | $ | 441 |
At June 30, 2019 | At December 31, 2018 | At September 30, 2019 | At December 31, 2018 | |||||||||||||
IS | WM | IS | WM | IS | WM | IS | WM | |||||||||
Current | 99.2 | % | 99.9 | % | 99.8 | % | 99.9 | % | 99.2 | % | 99.9 | % | 99.8 | % | 99.9 | % |
Nonaccrual1 | 0.8 | % | 0.1 | % | 0.2 | % | 0.1 | % | 0.8 | % | 0.1 | % | 0.2 | % | 0.1 | % |
1. | These loans are on nonaccrual status because the loans were past due for a period of 90 days or more or payment of principal or interest was in doubt. |
At June 30, 2019 | At September 30, 2019 | |||||||||||||||||||||||||||||
Years to Maturity | Years to Maturity | |||||||||||||||||||||||||||||
$ in millions | Less than 1 | 1-3 | 3-5 | Over 5 | Total | Less than 1 | 1-3 | 3-5 | Over 5 | Total | ||||||||||||||||||||
Loans | ||||||||||||||||||||||||||||||
AA | $ | 333 | $ | 51 | $ | — | $ | 5 | $ | 389 | $ | 308 | $ | 41 | $ | — | $ | 5 | $ | 354 | ||||||||||
A | 540 | 1,388 | 941 | 259 | 3,128 | 814 | 733 | 748 | 363 | 2,658 | ||||||||||||||||||||
BBB | 2,278 | 5,281 | 3,553 | 434 | 11,546 | 3,095 | 4,886 | 3,106 | 569 | 11,656 | ||||||||||||||||||||
NIG | 9,232 | 15,372 | 10,852 | 4,194 | 39,650 | 9,453 | 16,223 | 11,709 | 5,143 | 42,528 | ||||||||||||||||||||
Unrated2 | 51 | 87 | 332 | 2,673 | 3,143 | 66 | 76 | 119 | 1,481 | 1,742 | ||||||||||||||||||||
Total loans | 12,434 | 22,179 | 15,678 | 7,565 | 57,856 | 13,736 | 21,959 | 15,682 | 7,561 | 58,938 | ||||||||||||||||||||
Lending commitments | Lending commitments | Lending commitments | ||||||||||||||||||||||||||||
AAA | 90 | 50 | — | — | 140 | 90 | 50 | — | — | 140 | ||||||||||||||||||||
AA | 2,262 | 1,382 | 2,420 | — | 6,064 | 2,405 | 1,362 | 2,121 | — | 5,888 | ||||||||||||||||||||
A | 3,432 | 5,814 | 9,482 | 628 | 19,356 | 4,334 | 6,506 | 9,600 | 715 | 21,155 | ||||||||||||||||||||
BBB | 17,659 | 13,294 | 20,052 | 192 | 51,197 | 10,843 | 13,710 | 20,949 | 546 | 46,048 | ||||||||||||||||||||
NIG | 4,408 | 10,983 | 15,305 | 6,484 | 37,180 | 4,261 | 10,914 | 15,933 | 4,140 | 35,248 | ||||||||||||||||||||
Unrated2 | — | 14 | 51 | 10 | 75 | 2 | 26 | 22 | 7 | 57 | ||||||||||||||||||||
Total lending commitments | 27,851 | 31,537 | 47,310 | 7,314 | 114,012 | 21,935 | 32,568 | 48,625 | 5,408 | 108,536 | ||||||||||||||||||||
Total exposure | $ | 40,285 | $ | 53,716 | $ | 62,988 | $ | 14,879 | $ | 171,868 | $ | 35,671 | $ | 54,527 | $ | 64,307 | $ | 12,969 | $ | 167,474 |
At December 31, 2018 | |||||||||||||||
Years to Maturity | |||||||||||||||
$ in millions | Less than 1 | 1-3 | 3-5 | Over 5 | Total | ||||||||||
Loans | |||||||||||||||
AA | $ | 7 | $ | 430 | $ | — | $ | 19 | $ | 456 | |||||
A | 565 | 1,580 | 858 | 267 | 3,270 | ||||||||||
BBB | 3,775 | 4,697 | 4,251 | 495 | 13,218 | ||||||||||
NIG | 7,151 | 12,882 | 9,313 | 5,889 | 35,235 | ||||||||||
Unrated2 | 88 | 95 | 160 | 1,762 | 2,105 | ||||||||||
Total loans | 11,586 | 19,684 | 14,582 | 8,432 | 54,284 | ||||||||||
Lending commitments | |||||||||||||||
AAA | 90 | 75 | — | — | 165 | ||||||||||
AA | 2,491 | 1,177 | 2,863 | — | 6,531 | ||||||||||
A | 2,892 | 6,006 | 9,895 | 502 | 19,295 | ||||||||||
BBB | 2,993 | 11,825 | 19,461 | 638 | 34,917 | ||||||||||
NIG | 1,681 | 10,604 | 16,075 | 5,751 | 34,111 | ||||||||||
Unrated2 | 8 | — | 38 | — | 46 | ||||||||||
Total lending commitments | 10,155 | 29,687 | 48,332 | 6,891 | 95,065 | ||||||||||
Total exposure | $ | 21,741 | $ | 49,371 | $ | 62,914 | $ | 15,323 | $ | 149,349 |
1. | Obligor credit ratings are internally determined by |
2. | Unrated loans and lending commitments are primarily trading positions that are measured at fair value and risk managed as a component of market risk. For a further discussion of our market risk, see “Market Risk” herein. |
33 |
Risk Disclosures |
$ in millions | At June 30, 2019 | At December 31, 2018 | At September 30, 2019 | At December 31, 2018 | ||||||||
Industry | ||||||||||||
Financials | $ | 36,429 | $ | 32,655 | $ | 38,935 | $ | 32,655 | ||||
Real estate | 28,036 | 24,133 | 26,299 | 24,133 | ||||||||
Healthcare | 24,696 | 10,158 | 20,219 | 10,158 | ||||||||
Communications services | 13,063 | 11,244 | ||||||||||
Industrials | 12,826 | 13,701 | 13,079 | 13,701 | ||||||||
Communications Services | 12,563 | 11,244 | ||||||||||
Consumer discretionary | 10,790 | 8,314 | 9,814 | 8,314 | ||||||||
Energy | 9,998 | 9,847 | 9,704 | 9,847 | ||||||||
Utilities | 9,294 | 9,856 | 9,675 | 9,856 | ||||||||
Information technology | 8,213 | 9,896 | 8,920 | 9,896 | ||||||||
Consumer staples | 7,413 | 7,921 | 7,257 | 7,921 | ||||||||
Materials | 5,740 | 5,969 | 5,108 | 5,969 | ||||||||
Insurance | 3,652 | 3,744 | 3,714 | 3,744 | ||||||||
Other | 1,718 | 1,911 | 2,187 | 1,911 | ||||||||
Total | $ | 171,868 | $ | 149,349 | $ | 167,474 | $ | 149,349 |
$ in millions | At June 30, 2019 | At December 31, 2018 | At September 30, 2019 | At December 31, 2018 | ||||||||
Corporate relationship and event-driven lending2 | $ | 13,395 | $ | 13,317 | $ | 13,432 | $ | 13,317 | ||||
Secured lending facilities3 | 24,919 | 21,408 | 27,834 | 21,408 | ||||||||
Securities-based lending and other4 | 8,007 | 8,331 | 7,317 | 8,331 | ||||||||
Total Corporate | $ | 46,321 | $ | 43,056 | $ | 48,583 | $ | 43,056 |
1. | Amounts include loans held for investment, loans held for sale and loans measured at fair value. Loans at fair value are included in Trading assets in the balance sheets. |
2. | Relationship and event-driven loans typically consist of revolving lines of credit, term loans and bridge loans. For additional information on event-driven loans, see “Institutional Securities Event-Driven Loans and Lending Commitments” herein. |
3. | Secured lending facilities includes loans provided to clients to warehouse loans secured by underlying real estate and other assets. |
4. | Securities-based lending and other includes financing extended to sales and trading customers and corporate loans purchased in the secondary market. |
At June 30, 2019 | At September 30, 2019 | |||||||||||||||||||||||||||||
Years to Maturity | Years to Maturity | |||||||||||||||||||||||||||||
$ in millions | Less than 1 | 1-3 | 3-5 | Over 5 | Total | Less than 1 | 1-3 | 3-5 | Over 5 | Total | ||||||||||||||||||||
Loans | $ | 2,046 | $ | 655 | $ | 477 | $ | 2,103 | $ | 5,281 | $ | 1,198 | $ | 516 | $ | 797 | $ | 2,543 | $ | 5,054 | ||||||||||
Lending commitments | 17,128 | 2,545 | 2,684 | 4,631 | 26,988 | 10,022 | 3,278 | 3,086 | 3,453 | 19,839 | ||||||||||||||||||||
Total loans and lending commitments | $ | 19,174 | $ | 3,200 | $ | 3,161 | $ | 6,734 | $ | 32,269 | $ | 11,220 | $ | 3,794 | $ | 3,883 | $ | 5,996 | $ | 24,893 |
At December 31, 2018 | |||||||||||||||
Years to Maturity | |||||||||||||||
$ in millions | Less than 1 | 1-3 | 3-5 | Over 5 | Total | ||||||||||
Loans | $ | 2,582 | $ | 287 | $ | 656 | $ | 1,618 | $ | 5,143 | |||||
Lending commitments | 1,506 | 2,456 | 2,877 | 3,658 | 10,497 | ||||||||||
Total loans and lending commitments | $ | 4,088 | $ | 2,743 | $ | 3,533 | $ | 5,276 | $ | 15,640 |
September 2019 Form 10-Q | 34 |
Risk Disclosures |
At June 30, 2019 | |||||||||||||||
Contractual Years to Maturity | |||||||||||||||
$ in millions | Less than 1 | 1-3 | 3-5 | Over 5 | Total | ||||||||||
Securities-based lending and other loans | $ | 39,077 | $ | 2,910 | $ | 2,391 | $ | 1,103 | $ | 45,481 | |||||
Residential real estate loans | 6 | 22 | — | 28,565 | 28,593 | ||||||||||
Total loans | $ | 39,083 | $ | 2,932 | $ | 2,391 | $ | 29,668 | $ | 74,074 | |||||
Lending commitments | 9,544 | 2,191 | 302 | 273 | 12,310 | ||||||||||
Total loans and lending commitments | $ | 48,627 | $ | 5,123 | $ | 2,693 | $ | 29,941 | $ | 86,384 | |||||
Securities-based lending—LAL platform loans | $ | 34,852 |
At September 30, 2019 | |||||||||||||||
Contractual Years to Maturity | |||||||||||||||
$ in millions | Less than 1 | 1-3 | 3-5 | Over 5 | Total | ||||||||||
Securities-based lending and other loans | $ | 40,174 | $ | 3,342 | $ | 2,625 | $ | 1,247 | $ | 47,388 | |||||
Residential real estate loans | 9 | 18 | — | 29,150 | 29,177 | ||||||||||
Total loans | $ | 40,183 | $ | 3,360 | $ | 2,625 | $ | 30,397 | $ | 76,565 | |||||
Lending commitments | 9,467 | 1,792 | 195 | 317 | 11,771 | ||||||||||
Total loans and lending commitments | $ | 49,650 | $ | 5,152 | $ | 2,820 | $ | 30,714 | $ | 88,336 | |||||
Securities-based lending—LAL platform loans | $ | 35,549 |
At December 31, 2018 | |||||||||||||||
Contractual Years to Maturity | |||||||||||||||
$ in millions | Less than 1 | 1-3 | 3-5 | Over 5 | Total | ||||||||||
Securities-based lending and other loans | $ | 38,144 | $ | 3,573 | $ | 2,004 | $ | 1,006 | $ | 44,727 | |||||
Residential real estate loans | — | 30 | 1 | 27,436 | 27,467 | ||||||||||
Total loans | $ | 38,144 | $ | 3,603 | $ | 2,005 | $ | 28,442 | $ | 72,194 | |||||
Lending commitments | 9,197 | 1,151 | 42 | 273 | 10,663 | ||||||||||
Total loans and lending commitments | $ | 47,341 | $ | 4,754 | $ | 2,047 | $ | 28,715 | $ | 82,857 | |||||
Securities-based lending—LAL platform loans | $ | 33,247 |
At June 30, 2019 | At September 30, 2019 | |||||||||||||||||
$ in millions | IS | WM | Total | IS | WM | Total | ||||||||||||
Customer receivables representing margin loans | $ | 16,719 | $ | 10,169 | $ | 26,888 | $ | 18,321 | $ | 9,747 | $ | 28,068 |
At December 31, 2018 | |||||||||
$ in millions | IS | WM | Total | ||||||
Customer receivables representing margin loans | $ | 14,842 | $ | 11,383 | $ | 26,225 |
$ in millions | At June 30, 2019 | At December 31, 2018 | At September 30, 2019 | At December 31, 2018 | ||||||||
Balance | $ | 2,975 | $ | 3,415 | $ | 2,990 | $ | 3,415 | ||||
Allowance for loan losses | (63 | ) | (63 | ) | (61 | ) | (63 | ) | ||||
Balance, net | $ | 2,912 | $ | 3,352 | $ | 2,929 | $ | 3,352 | ||||
Remaining repayment term, weighted average in years | 4.7 | 4.3 | 4.7 | 4.3 |
35 | September 2019 Form 10-Q |
Risk Disclosures |
Counterparty Credit Rating1 | Counterparty Credit Rating1 | |||||||||||||||||||||||||||||||||||
$ in millions | AAA | AA | A | BBB | NIG | Total | AAA | AA | A | BBB | NIG | Total | ||||||||||||||||||||||||
At June 30, 2019 | ||||||||||||||||||||||||||||||||||||
At September 30, 2019 | At September 30, 2019 | |||||||||||||||||||||||||||||||||||
<1 year | $ | 492 | $ | 5,292 | $ | 35,922 | $ | 17,355 | $ | 6,419 | $ | 65,480 | $ | 537 | $ | 4,735 | $ | 36,673 | $ | 21,372 | $ | 6,481 | $ | 69,798 | ||||||||||||
1-3 years | 435 | 2,095 | 23,569 | 11,878 | 7,907 | 45,884 | 346 | 2,454 | 24,447 | 15,364 | 8,278 | 50,889 | ||||||||||||||||||||||||
3-5 years | 597 | 2,381 | 11,932 | 7,554 | 2,914 | 25,378 | 456 | 2,629 | 13,795 | 8,774 | 2,900 | 28,554 | ||||||||||||||||||||||||
Over 5 years | 3,807 | 12,271 | 80,793 | 43,529 | 13,037 | 153,437 | 3,749 | 17,709 | 94,707 | 47,846 | 17,387 | 181,398 | ||||||||||||||||||||||||
Total, gross | $ | 5,331 | $ | 22,039 | $ | 152,216 | $ | 80,316 | $ | 30,277 | $ | 290,179 | $ | 5,088 | $ | 27,527 | $ | 169,622 | $ | 93,356 | $ | 35,046 | $ | 330,639 | ||||||||||||
Counterparty netting | (2,068 | ) | (13,417 | ) | (122,370 | ) | (59,551 | ) | (18,089 | ) | (215,495 | ) | (2,025 | ) | (17,592 | ) | (138,116 | ) | (71,427 | ) | (21,422 | ) | (250,582 | ) | ||||||||||||
Cash and securities collateral | (3,072 | ) | (6,632 | ) | (22,953 | ) | (15,823 | ) | (8,513 | ) | (56,993 | ) | (2,735 | ) | (8,114 | ) | (26,764 | ) | (16,578 | ) | (9,377 | ) | (63,568 | ) | ||||||||||||
Total, net | $ | 191 | $ | 1,990 | $ | 6,893 | $ | 4,942 | $ | 3,675 | $ | 17,691 | $ | 328 | $ | 1,821 | $ | 4,742 | $ | 5,351 | $ | 4,247 | $ | 16,489 |
Counterparty Credit Rating1 | ||||||||||||||||||
$ in millions | AAA | AA | A | BBB | NIG | Total | ||||||||||||
At December 31, 2018 | ||||||||||||||||||
<1 year | $ | 878 | $ | 7,430 | $ | 38,718 | $ | 15,009 | $ | 7,183 | $ | 69,218 | ||||||
1-3 years | 664 | 2,362 | 22,239 | 10,255 | 7,097 | 42,617 | ||||||||||||
3-5 years | 621 | 2,096 | 11,673 | 6,014 | 2,751 | 23,155 | ||||||||||||
Over 5 years | 3,535 | 9,725 | 67,166 | 36,087 | 11,112 | 127,625 | ||||||||||||
Total, gross | $ | 5,698 | $ | 21,613 | $ | 139,796 | $ | 67,365 | $ | 28,143 | $ | 262,615 | ||||||
Counterparty netting | (2,325 | ) | (13,771 | ) | (113,045 | ) | (49,658 | ) | (16,681 | ) | (195,480 | ) | ||||||
Cash and securities collateral | (3,214 | ) | (5,766 | ) | (21,931 | ) | (12,702 | ) | (8,269 | ) | (51,882 | ) | ||||||
Total, net | $ | 159 | $ | 2,076 | $ | 4,820 | $ | 5,005 | $ | 3,193 | $ | 15,253 |
$ in millions | At June 30, 2019 | At December 31, 2018 | At September 30, 2019 | At December 31, 2018 | ||||||||
Industry | ||||||||||||
Utilities | $ | 4,550 | $ | 4,324 | ||||||||
Financials | $ | 5,118 | $ | 4,480 | 3,903 | 4,480 | ||||||
Utilities | 4,819 | 4,324 | ||||||||||
Industrials | 1,313 | 1,335 | ||||||||||
Healthcare | 1,233 | 787 | 1,298 | 787 | ||||||||
Industrials | 1,151 | 1,335 | ||||||||||
Regional governments | 984 | 779 | 864 | 779 | ||||||||
Not-for-profit organizations | 742 | 583 | ||||||||||
Energy | 616 | 199 | ||||||||||
Sovereign governments | 587 | 385 | ||||||||||
Information technology | 847 | 695 | 569 | 695 | ||||||||
Not-for-profit organizations | 704 | 583 | ||||||||||
Consumer discretionary | 480 | 188 | 494 | 188 | ||||||||
Sovereign governments | 471 | 385 | ||||||||||
Energy | 418 | 199 | ||||||||||
Materials | 391 | 275 | 453 | 275 | ||||||||
Communications services | 368 | 373 | 314 | 373 | ||||||||
Real estate | 256 | 283 | 275 | 283 | ||||||||
Insurance | 195 | 235 | 243 | 235 | ||||||||
Consumer staples | 129 | 216 | 173 | 216 | ||||||||
Other | 127 | 116 | 95 | 116 | ||||||||
Total | $ | 17,691 | $ | 15,253 | $ | 16,489 | $ | 15,253 |
1. | Obligor credit ratings are determined internally by CRM. |
United Kingdom | ||||||||||||||||||
$ in millions | Sovereigns | Non-sovereigns | Total | Sovereigns | Non-sovereigns | Total | ||||||||||||
Net inventory1 | $ | (401 | ) | $ | 763 | $ | 362 | $ | (879 | ) | $ | 718 | $ | (161 | ) | |||
Net counterparty exposure2 | 37 | 9,590 | 9,627 | 4 | 10,262 | 10,266 | ||||||||||||
Loans | — | 2,632 | 2,632 | — | 2,583 | 2,583 | ||||||||||||
Lending commitments | — | 4,602 | 4,602 | — | 5,608 | 5,608 | ||||||||||||
Exposure before hedges | (364 | ) | 17,587 | 17,223 | (875 | ) | 19,171 | 18,296 | ||||||||||
Hedges3 | (312 | ) | (1,205 | ) | (1,517 | ) | (311 | ) | (1,211 | ) | (1,522 | ) | ||||||
Net exposure | $ | (676 | ) | $ | 16,382 | $ | 15,706 | $ | (1,186 | ) | $ | 17,960 | $ | 16,774 |
Japan | |||||||||
$ in millions | Sovereigns | Non-sovereigns | Total | ||||||
Net inventory1 | $ | 4,534 | $ | 283 | $ | 4,817 | |||
Net counterparty exposure2 | 45 | 3,675 | 3,720 | ||||||
Loans | — | 325 | 325 | ||||||
Exposure before hedges | 4,579 | 4,283 | 8,862 | ||||||
Hedges3 | (78 | ) | (116 | ) | (194 | ) | |||
Net exposure | $ | 4,501 | $ | 4,167 | $ | 8,668 |
Germany | |||||||||
$ in millions | Sovereigns | Non-sovereigns | Total | ||||||
Net inventory1 | $ | (950 | ) | $ | 48 | $ | (902 | ) | |
Net counterparty exposure2 | 162 | 3,086 | 3,248 | ||||||
Loans | — | 1,129 | 1,129 | ||||||
Lending commitments | — | 3,233 | 3,233 | ||||||
Exposure before hedges | (788 | ) | 7,496 | 6,708 | |||||
Hedges3 | (268 | ) | (833 | ) | (1,101 | ) | |||
Net exposure | $ | (1,056 | ) | $ | 6,663 | $ | 5,607 |
Spain | |||||||||
$ in millions | Sovereigns | Non-sovereigns | Total | ||||||
Net inventory1 | $ | (181 | ) | $ | (31 | ) | $ | (212 | ) |
Net counterparty exposure2 | — | 244 | 244 | ||||||
Loans | — | 3,420 | 3,420 | ||||||
Lending commitments | — | 2,061 | 2,061 | ||||||
Exposure before hedges | (181 | ) | 5,694 | 5,513 | |||||
Hedges3 | — | (130 | ) | (130 | ) | ||||
Net exposure | $ | (181 | ) | $ | 5,564 | $ | 5,383 |
Canada | ||||||||||||||||||
Japan | ||||||||||||||||||
$ in millions | Sovereigns | Non-sovereigns | Total | Sovereigns | Non-sovereigns | Total | ||||||||||||
Net inventory1 | $ | 643 | $ | 21 | $ | 664 | $ | 5,621 | $ | 662 | $ | 6,283 | ||||||
Net counterparty exposure2 | 18 | 1,894 | 1,912 | |||||||||||||||
Net counterparty exposure2 | 47 | 3,560 | 3,607 | |||||||||||||||
Loans | — | 197 | 197 | — | 324 | 324 | ||||||||||||
Lending commitments | — | 1,384 | 1,384 | |||||||||||||||
Exposure before hedges | 661 | 3,496 | 4,157 | 5,668 | 4,546 | 10,214 | ||||||||||||
Hedges3 | — | (136 | ) | (136 | ) | (77 | ) | (116 | ) | (193 | ) | |||||||
Net exposure | $ | 661 | $ | 3,360 | $ | 4,021 | $ | 5,591 | $ | 4,430 | $ | 10,021 |
36 |
Risk Disclosures |
France | ||||||||||||||||||
Spain | ||||||||||||||||||
$ in millions | Sovereigns | Non-sovereigns | Total | Sovereigns | Non-sovereigns | Total | ||||||||||||
Net inventory1 | $ | (767 | ) | $ | (466 | ) | $ | (1,233 | ) | $ | 15 | $ | (124 | ) | $ | (109 | ) | |
Net counterparty exposure2 | — | 2,578 | 2,578 | — | 218 | 218 | ||||||||||||
Loans | — | 605 | 605 | — | 3,671 | 3,671 | ||||||||||||
Lending commitments | — | 2,192 | 2,192 | — | 617 | 617 | ||||||||||||
Exposure before hedges | (767 | ) | 4,909 | 4,142 | 15 | 4,382 | 4,397 | |||||||||||
Hedges3 | (6 | ) | (558 | ) | (564 | ) | — | (125 | ) | (125 | ) | |||||||
Net exposure | $ | (773 | ) | $ | 4,351 | $ | 3,578 | $ | 15 | $ | 4,257 | $ | 4,272 |
China | |||||||||
$ in millions | Sovereigns | Non-sovereigns | Total | ||||||
Net inventory1 | $ | 183 | $ | 727 | $ | 910 | |||
Net counterparty exposure2 | 79 | 211 | 290 | ||||||
Loans | — | 1,510 | 1,510 | ||||||
Lending commitments | — | 881 | 881 | ||||||
Exposure before hedges | 262 | 3,329 | 3,591 | ||||||
Hedges3 | (112 | ) | (49 | ) | (161 | ) | |||
Net exposure | $ | 150 | $ | 3,280 | $ | 3,430 |
Ireland | |||||||||
$ in millions | Sovereigns | Non-sovereigns | Total | ||||||
Net inventory1 | $ | 50 | $ | 532 | $ | 582 | |||
Net counterparty exposure2 | — | 218 | 218 | ||||||
Loans | — | 2,085 | 2,085 | ||||||
Lending commitments | — | 293 | 293 | ||||||
Exposure before hedges | 50 | 3,128 | 3,178 | ||||||
Hedges3 | (30 | ) | — | (30 | ) | ||||
Net exposure | $ | 20 | $ | 3,128 | $ | 3,148 |
Germany | |||||||||
$ in millions | Sovereigns | Non-sovereigns | Total | ||||||
Net inventory1 | $ | (2,378 | ) | $ | 1 | $ | (2,377 | ) | |
Net counterparty exposure2 | 96 | 2,643 | 2,739 | ||||||
Loans | — | 1,097 | 1,097 | ||||||
Lending commitments | — | 3,792 | 3,792 | ||||||
Exposure before hedges | (2,282 | ) | 7,533 | 5,251 | |||||
Hedges3 | (231 | ) | (811 | ) | (1,042 | ) | |||
Net exposure | $ | (2,513 | ) | $ | 6,722 | $ | 4,209 |
Brazil | |||||||||
$ in millions | Sovereigns | Non-sovereigns | Total | ||||||
Net inventory1 | $ | 2,566 | $ | 77 | $ | 2,643 | |||
Net counterparty exposure2 | — | 72 | 72 | ||||||
Loans | — | 40 | 40 | ||||||
Lending commitments | — | 269 | 269 | ||||||
Exposure before hedges | 2,566 | 458 | 3,024 | ||||||
Hedges3 | (12 | ) | (18 | ) | (30 | ) | |||
Net exposure | $ | 2,554 | $ | 440 | $ | 2,994 |
Brazil | |||||||||
$ in millions | Sovereigns | Non-sovereigns | Total | ||||||
Net inventory1 | $ | 3,730 | $ | 49 | $ | 3,779 | |||
Net counterparty exposure2 | — | 178 | 178 | ||||||
Loans | — | 37 | 37 | ||||||
Lending commitments | — | 235 | 235 | ||||||
Exposure before hedges | 3,730 | 499 | 4,229 | ||||||
Hedges3 | (12 | ) | (32 | ) | (44 | ) | |||
Net exposure | $ | 3,718 | $ | 467 | $ | 4,185 |
China | |||||||||
$ in millions | Sovereigns | Non-sovereigns | Total | ||||||
Net inventory1 | $ | (284 | ) | $ | 964 | $ | 680 | ||
Net counterparty exposure2 | 126 | 237 | 363 | ||||||
Loans | — | 1,866 | 1,866 | ||||||
Lending commitments | — | 865 | 865 | ||||||
Exposure before hedges | (158 | ) | 3,932 | 3,774 | |||||
Hedges3 | (82 | ) | (80 | ) | (162 | ) | |||
Net exposure | $ | (240 | ) | $ | 3,852 | $ | 3,612 |
Canada | |||||||||
$ in millions | Sovereigns | Non-sovereigns | Total | ||||||
Net inventory1 | $ | (168 | ) | $ | 101 | $ | (67 | ) | |
Net counterparty exposure2 | 107 | 1,944 | 2,051 | ||||||
Loans | — | 218 | 218 | ||||||
Lending commitments | — | 1,473 | 1,473 | ||||||
Exposure before hedges | (61 | ) | 3,736 | 3,675 | |||||
Hedges3 | — | (140 | ) | (140 | ) | ||||
Net exposure | $ | (61 | ) | $ | 3,596 | $ | 3,535 |
India | ||||||||||||||||||
France | ||||||||||||||||||
$ in millions | Sovereigns | Non-sovereigns | Total | Sovereigns | Non-sovereigns | Total | ||||||||||||
Net inventory1 | $ | 1,503 | $ | 661 | $ | 2,164 | $ | (1,367 | ) | $ | (784 | ) | $ | (2,151 | ) | |||
Net counterparty exposure2 | — | 537 | 537 | — | 2,585 | 2,585 | ||||||||||||
Loans | — | 246 | 246 | — | 595 | 595 | ||||||||||||
Lending commitments | — | 2,851 | 2,851 | |||||||||||||||
Exposure before hedges | 1,503 | 1,444 | 2,947 | (1,367 | ) | 5,247 | 3,880 | |||||||||||
Hedges3 | (6 | ) | (553 | ) | (559 | ) | ||||||||||||
Net exposure | $ | 1,503 | $ | 1,444 | $ | 2,947 | $ | (1,373 | ) | $ | 4,694 | $ | 3,321 |
India | |||||||||
$ in millions | Sovereigns | Non-sovereigns | Total | ||||||
Net inventory1 | $ | 1,624 | $ | 592 | $ | 2,216 | |||
Net counterparty exposure2 | — | 655 | 655 | ||||||
Loans | — | 242 | 242 | ||||||
Exposure before hedges | 1,624 | 1,489 | 3,113 | ||||||
Net exposure | $ | 1,624 | $ | 1,489 | $ | 3,113 |
Ireland | |||||||||
$ in millions | Sovereigns | Non-sovereigns | Total | ||||||
Net inventory1 | $ | (23 | ) | $ | 223 | $ | 200 | ||
Net counterparty exposure2 | 3 | 220 | 223 | ||||||
Loans | — | 2,177 | 2,177 | ||||||
Lending commitments | — | 361 | 361 | ||||||
Exposure before hedges | (20 | ) | 2,981 | 2,961 | |||||
Hedges3 | (30 | ) | — | (30 | ) | ||||
Net exposure | $ | (50 | ) | $ | 2,981 | $ | 2,931 |
1. | Net inventory represents exposure to both long and short single-name and index positions (i.e., bonds and equities at fair value and CDS based on a notional amount assuming zero recovery adjusted for the fair value of any receivable or payable). |
2. | Net counterparty exposure (e.g., repurchase transactions, securities lending and OTC derivatives) takes into consideration legally enforceable master netting agreements and collateral. Net counterparty exposure is net of the benefit of collateral received. For more information, see “Additional Information—Top 10 Non-U.S. Country Exposures” herein. |
3. | Amounts represent CDS hedges (purchased and sold) on net counterparty exposure and lending executed by trading desks responsible for hedging counterparty and lending credit risk exposures. Amounts are based on the CDS notional amount assuming zero recovery adjusted for any fair value receivable or payable. For |
$ in millions | At June 30, 2019 | At September 30, 2019 | ||||||
Counterparty credit exposure | Collateral1 | Collateral1 | ||||||
Germany | Germany and France | $ | 11,245 | Germany and Austria | $ | 12,964 | ||
United Kingdom | U.K., U.S. and Japan | 9,856 | U.K., U.S. and Japan | 10,416 | ||||
Other | Japan, France and Spain | 15,958 | Japan, France and U.S. | 19,298 |
1. | Collateral primarily consists of cash and government obligations. |
37 | September 2019 Form 10-Q |
Risk Disclosures |
38 |
/s/ Deloitte & Touche LLP |
New York, New York |
39 |
Consolidated Income Statements (Unaudited) |
Three Months Ended June 30, | Six Months Ended June 30, | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||
in millions, except per share data | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||
Revenues | ||||||||||||||||||||||||
Investment banking | $ | 1,590 | $ | 1,793 | $ | 2,832 | $ | 3,427 | $ | 1,635 | $ | 1,567 | $ | 4,467 | $ | 4,994 | ||||||||
Trading | 2,732 | 3,293 | 6,173 | 7,063 | 2,608 | 2,752 | 8,781 | 9,815 | ||||||||||||||||
Investments | 441 | 147 | 714 | 273 | 87 | 136 | 801 | 409 | ||||||||||||||||
Commissions and fees | 979 | 1,039 | 1,945 | 2,212 | 990 | 932 | 2,935 | 3,144 | ||||||||||||||||
Asset management | 3,220 | 3,189 | 6,269 | 6,381 | 3,363 | 3,251 | 9,632 | 9,632 | ||||||||||||||||
Other | 253 | 243 | 554 | 450 | 131 | 298 | 685 | 748 | ||||||||||||||||
Total non-interest revenues | 9,215 | 9,704 | 18,487 | 19,806 | 8,814 | 8,936 | 27,301 | 28,742 | ||||||||||||||||
Interest income | 4,506 | 3,294 | 8,796 | 6,154 | 4,350 | 3,627 | 13,146 | 9,781 | ||||||||||||||||
Interest expense | 3,477 | 2,388 | 6,753 | 4,273 | 3,132 | 2,691 | 9,885 | 6,964 | ||||||||||||||||
Net interest | 1,029 | 906 | 2,043 | 1,881 | 1,218 | 936 | 3,261 | 2,817 | ||||||||||||||||
Net revenues | 10,244 | 10,610 | 20,530 | 21,687 | 10,032 | 9,872 | 30,562 | 31,559 | ||||||||||||||||
Non-interest expenses | ||||||||||||||||||||||||
Compensation and benefits | 4,531 | 4,621 | 9,182 | 9,535 | 4,427 | 4,310 | 13,609 | 13,845 | ||||||||||||||||
Occupancy and equipment | 353 | 346 | 700 | 682 | 353 | 351 | 1,053 | 1,033 | ||||||||||||||||
Brokerage, clearing and exchange fees | 630 | 609 | 1,223 | 1,236 | 637 | 559 | 1,860 | 1,795 | ||||||||||||||||
Information processing and communications | 538 | 496 | 1,070 | 974 | 557 | 513 | 1,627 | 1,487 | ||||||||||||||||
Marketing and business development | 162 | 179 | 303 | 319 | 157 | 152 | 460 | 471 | ||||||||||||||||
Professional services | 537 | 580 | 1,051 | 1,090 | 531 | 570 | 1,582 | 1,660 | ||||||||||||||||
Other | 590 | 670 | 1,143 | 1,322 | 660 | 566 | 1,803 | 1,888 | ||||||||||||||||
Total non-interest expenses | 7,341 | 7,501 | 14,672 | 15,158 | 7,322 | 7,021 | 21,994 | 22,179 | ||||||||||||||||
Income from continuing operations before income taxes | 2,903 | 3,109 | 5,858 | 6,529 | 2,710 | 2,851 | 8,568 | 9,380 | ||||||||||||||||
Provision for income taxes | 657 | 640 | 1,144 | 1,354 | 492 | 696 | 1,636 | 2,050 | ||||||||||||||||
Income from continuing operations | 2,246 | 2,469 | 4,714 | 5,175 | 2,218 | 2,155 | 6,932 | 7,330 | ||||||||||||||||
Income (loss) from discontinued operations, net of income taxes | — | (2 | ) | — | (4 | ) | — | (1 | ) | — | (5 | ) | ||||||||||||
Net income | $ | 2,246 | $ | 2,467 | $ | 4,714 | $ | 5,171 | $ | 2,218 | $ | 2,154 | $ | 6,932 | $ | 7,325 | ||||||||
Net income applicable to noncontrolling interests | 45 | 30 | 84 | 66 | 45 | 42 | 129 | 108 | ||||||||||||||||
Net income applicable to Morgan Stanley | $ | 2,201 | $ | 2,437 | $ | 4,630 | $ | 5,105 | $ | 2,173 | $ | 2,112 | $ | 6,803 | $ | 7,217 | ||||||||
Preferred stock dividends and other | 170 | 170 | 263 | 263 | ||||||||||||||||||||
Preferred stock dividends | 113 | 93 | 376 | 356 | ||||||||||||||||||||
Earnings applicable to Morgan Stanley common shareholders | $ | 2,031 | $ | 2,267 | $ | 4,367 | $ | 4,842 | $ | 2,060 | $ | 2,019 | $ | 6,427 | $ | 6,861 | ||||||||
Earnings per common share | ||||||||||||||||||||||||
Basic | $ | 1.24 | $ | 1.32 | $ | 2.65 | $ | 2.80 | $ | 1.28 | $ | 1.19 | $ | 3.94 | $ | 3.99 | ||||||||
Diluted | $ | 1.23 | $ | 1.30 | $ | 2.62 | $ | 2.75 | $ | 1.27 | $ | 1.17 | $ | 3.89 | $ | 3.92 | ||||||||
Average common shares outstanding | ||||||||||||||||||||||||
Basic | 1,634 | 1,720 | 1,646 | 1,730 | 1,604 | 1,697 | 1,632 | 1,719 | ||||||||||||||||
Diluted | 1,655 | 1,748 | 1,666 | 1,760 | 1,627 | 1,727 | 1,653 | 1,749 |
40 | See Notes to Consolidated Financial Statements |
Consolidated Comprehensive Income Statements (Unaudited) |
Three Months Ended June 30, | Six Months Ended June 30, | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||
$ in millions | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||
Net income | $ | 2,246 | $ | 2,467 | $ | 4,714 | $ | 5,171 | $ | 2,218 | $ | 2,154 | $ | 6,932 | $ | 7,325 | ||||||||
Other comprehensive income (loss), net of tax: | ||||||||||||||||||||||||
Foreign currency translation adjustments | $ | 65 | $ | (192 | ) | $ | 43 | $ | (75 | ) | $ | (99 | ) | $ | (79 | ) | $ | (56 | ) | $ | (154 | ) | ||
Change in net unrealized gains (losses) on available-for-sale securities | 609 | (126 | ) | 1,038 | (536 | ) | 214 | (171 | ) | 1,252 | (707 | ) | ||||||||||||
Pension, postretirement and other | 3 | 6 | 4 | 11 | 3 | 5 | 7 | 16 | ||||||||||||||||
Change in net debt valuation adjustment | (246 | ) | 639 | (866 | ) | 1,090 | 337 | (743 | ) | (529 | ) | 347 | ||||||||||||
Total other comprehensive income (loss) | $ | 431 | $ | 327 | $ | 219 | $ | 490 | $ | 455 | $ | (988 | ) | $ | 674 | $ | (498 | ) | ||||||
Comprehensive income | $ | 2,677 | $ | 2,794 | $ | 4,933 | $ | 5,661 | $ | 2,673 | $ | 1,166 | $ | 7,606 | $ | 6,827 | ||||||||
Net income applicable to noncontrolling interests | 45 | 30 | 84 | 66 | 45 | 42 | 129 | 108 | ||||||||||||||||
Other comprehensive income (loss) applicable to noncontrolling interests | 9 | (9 | ) | (22 | ) | 63 | 2 | (59 | ) | (20 | ) | 4 | ||||||||||||
Comprehensive income applicable to Morgan Stanley | $ | 2,623 | $ | 2,773 | $ | 4,871 | $ | 5,532 | $ | 2,626 | $ | 1,183 | $ | 7,497 | $ | 6,715 |
See Notes to Consolidated Financial Statements | 41 |
Consolidated Balance Sheets |
$ in millions, except share data | (Unaudited) At June 30, 2019 | At December 31, 2018 | (Unaudited) At September 30, 2019 | At December 31, 2018 | ||||||||
Assets | ||||||||||||
Cash and cash equivalents: | ||||||||||||
Cash and due from banks | $ | 38,257 | $ | 30,541 | $ | 35,721 | $ | 30,541 | ||||
Interest bearing deposits with banks | 10,888 | 21,299 | 13,196 | 21,299 | ||||||||
Restricted cash | 30,435 | 35,356 | 30,739 | 35,356 | ||||||||
Trading assets at fair value ($118,200 and $120,437 were pledged to various parties) | 286,965 | 266,299 | ||||||||||
Investment securities (includes $63,038 and $61,061 at fair value) | 103,066 | 91,832 | ||||||||||
Trading assets at fair value ($116,506 and $120,437 were pledged to various parties) | 277,423 | 266,299 | ||||||||||
Investment securities (includes $64,714 and $61,061 at fair value) | 105,790 | 91,832 | ||||||||||
Securities purchased under agreements to resell (includes $4 and $— at fair value) | 85,398 | 98,522 | 93,367 | 98,522 | ||||||||
Securities borrowed | 133,580 | 116,313 | 132,401 | 116,313 | ||||||||
Customer and other receivables | 53,381 | 53,298 | 59,514 | 53,298 | ||||||||
Loans: | ||||||||||||
Held for investment (net of allowance of $265 and $238) | 105,145 | 99,815 | ||||||||||
Held for investment (net of allowance of $297 and $238) | 110,815 | 99,815 | ||||||||||
Held for sale | 15,756 | 15,764 | 14,707 | 15,764 | ||||||||
Goodwill | 7,158 | 6,688 | 7,139 | 6,688 | ||||||||
Intangible assets (net of accumulated amortization of $3,044 and $2,877) | 2,276 | 2,163 | ||||||||||
Intangible assets (net of accumulated amortization of $3,124 and $2,877) | 2,211 | 2,163 | ||||||||||
Other assets | 19,654 | 15,641 | 19,581 | 15,641 | ||||||||
Total assets | $ | 891,959 | $ | 853,531 | $ | 902,604 | $ | 853,531 | ||||
Liabilities | ||||||||||||
Deposits (includes $934 and $442 at fair value) | $ | 176,593 | $ | 187,820 | ||||||||
Deposits (includes $1,622 and $442 at fair value) | $ | 180,738 | $ | 187,820 | ||||||||
Trading liabilities at fair value | 139,405 | 126,747 | 143,405 | 126,747 | ||||||||
Securities sold under agreements to repurchase (includes $658 and $812 at fair value) | 62,294 | 49,759 | ||||||||||
Securities sold under agreements to repurchase (includes $732 and $812 at fair value) | 59,462 | 49,759 | ||||||||||
Securities loaned | 10,325 | 11,908 | 9,691 | 11,908 | ||||||||
Other secured financings (includes $8,476 and $5,245 at fair value) | 11,981 | 9,466 | ||||||||||
Other secured financings (includes $6,352 and $5,245 at fair value) | 9,836 | 9,466 | ||||||||||
Customer and other payables | 192,098 | 179,559 | 202,915 | 179,559 | ||||||||
Other liabilities and accrued expenses | 18,570 | 17,204 | 19,348 | 17,204 | ||||||||
Borrowings (includes $61,509 and $51,184 at fair value) | 197,848 | 189,662 | ||||||||||
Borrowings (includes $61,654 and $51,184 at fair value) | 193,659 | 189,662 | ||||||||||
Total liabilities | 809,114 | 772,125 | 819,054 | 772,125 | ||||||||
Commitments and contingent liabilities (see Note 11) | ||||||||||||
Equity | ||||||||||||
Morgan Stanley shareholders’ equity: | ||||||||||||
Preferred stock | 8,520 | 8,520 | 8,520 | 8,520 | ||||||||
Common stock, $0.01 par value: | ||||||||||||
Shares authorized: 3,500,000,000; Shares issued: 2,038,893,979; Shares outstanding: 1,658,805,108 and 1,699,828,943 | 20 | 20 | ||||||||||
Shares authorized: 3,500,000,000; Shares issued: 2,038,893,979; Shares outstanding: 1,623,587,078 and 1,699,828,943 | 20 | 20 | ||||||||||
Additional paid-in capital | 23,446 | 23,794 | 23,649 | 23,794 | ||||||||
Retained earnings | 67,588 | 64,175 | 69,071 | 64,175 | ||||||||
Employee stock trusts | 2,889 | 2,836 | 2,865 | 2,836 | ||||||||
Accumulated other comprehensive income (loss) | (2,051 | ) | (2,292 | ) | (1,598 | ) | (2,292 | ) | ||||
Common stock held in treasury at cost, $0.01 par value (380,088,871 and 339,065,036 shares) | (15,799 | ) | (13,971 | ) | ||||||||
Common stock held in treasury at cost, $0.01 par value (415,306,901 and 339,065,036 shares) | (17,280 | ) | (13,971 | ) | ||||||||
Common stock issued to employee stock trusts | (2,889 | ) | (2,836 | ) | (2,865 | ) | (2,836 | ) | ||||
Total Morgan Stanley shareholders’ equity | 81,724 | 80,246 | 82,382 | 80,246 | ||||||||
Noncontrolling interests | 1,121 | 1,160 | 1,168 | 1,160 | ||||||||
Total equity | 82,845 | 81,406 | 83,550 | 81,406 | ||||||||
Total liabilities and equity | $ | 891,959 | $ | 853,531 | $ | 902,604 | $ | 853,531 |
42 | See Notes to Consolidated Financial Statements |
Consolidated Statements of Changes in Total Equity (Unaudited) |
Three Months Ended June 30, | Six Months Ended June 30, | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||
$ in millions | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||
Preferred Stock | ||||||||||||||||||||||||
Beginning and ending balance | $ | 8,520 | $ | 8,520 | $ | 8,520 | $ | 8,520 | $ | 8,520 | $ | 8,520 | $ | 8,520 | $ | 8,520 | ||||||||
Common Stock | ||||||||||||||||||||||||
Beginning and ending balance | 20 | 20 | 20 | 20 | 20 | 20 | 20 | 20 | ||||||||||||||||
Additional Paid-in Capital | ||||||||||||||||||||||||
Beginning balance | 23,178 | 23,260 | 23,794 | 23,545 | 23,446 | 23,454 | 23,794 | 23,545 | ||||||||||||||||
Share-based award activity | 268 | 194 | (350 | ) | (91 | ) | 196 | 210 | (154 | ) | 119 | |||||||||||||
Other net increases | — | — | 2 | — | 7 | — | 9 | — | ||||||||||||||||
Ending balance | 23,446 | 23,454 | 23,446 | 23,454 | 23,649 | 23,664 | 23,649 | 23,664 | ||||||||||||||||
Retained Earnings | ||||||||||||||||||||||||
Beginning balance | 66,061 | 60,009 | 64,175 | 57,577 | 67,588 | 61,835 | 64,175 | 57,577 | ||||||||||||||||
Cumulative adjustments for accounting changes1 | — | — | 63 | 306 | — | — | 63 | 306 | ||||||||||||||||
Net income applicable to Morgan Stanley | 2,201 | 2,437 | 4,630 | 5,105 | 2,173 | 2,112 | 6,803 | 7,217 | ||||||||||||||||
Preferred stock dividends2 | (170 | ) | (170 | ) | (263 | ) | (263 | ) | (113 | ) | (93 | ) | (376 | ) | (356 | ) | ||||||||
Common stock dividends2 | (504 | ) | (441 | ) | (1,017 | ) | (890 | ) | (577 | ) | (524 | ) | (1,594 | ) | (1,414 | ) | ||||||||
Ending balance | 67,588 | 61,835 | 67,588 | 61,835 | 69,071 | 63,330 | 69,071 | 63,330 | ||||||||||||||||
Employee Stock Trusts | ||||||||||||||||||||||||
Beginning balance | 3,000 | 2,907 | 2,836 | 2,907 | 2,889 | 2,829 | 2,836 | 2,907 | ||||||||||||||||
Share-based award activity | (111 | ) | (78 | ) | 53 | (78 | ) | (24 | ) | (32 | ) | 29 | (110 | ) | ||||||||||
Ending balance | 2,889 | 2,829 | 2,889 | 2,829 | 2,865 | 2,797 | 2,865 | 2,797 | ||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | ||||||||||||||||||||||||
Beginning balance | (2,473 | ) | (3,406 | ) | (2,292 | ) | (3,060 | ) | (2,051 | ) | (3,070 | ) | (2,292 | ) | (3,060 | ) | ||||||||
Cumulative adjustments for accounting changes1 | — | — | — | (437 | ) | — | — | — | (437 | ) | ||||||||||||||
Net change in Accumulated other comprehensive income (loss) | 422 | 336 | 241 | 427 | 453 | (929 | ) | 694 | (502 | ) | ||||||||||||||
Ending balance | (2,051 | ) | (3,070 | ) | (2,051 | ) | (3,070 | ) | (1,598 | ) | (3,999 | ) | (1,598 | ) | (3,999 | ) | ||||||||
Common Stock Held In Treasury at Cost | ||||||||||||||||||||||||
Beginning balance | (14,582 | ) | (10,369 | ) | (13,971 | ) | (9,211 | ) | (15,799 | ) | (11,650 | ) | (13,971 | ) | (9,211 | ) | ||||||||
Share-based award activity | 47 | 24 | 1,081 | 734 | 57 | 25 | 1,138 | 759 | ||||||||||||||||
Repurchases of common stock and employee tax withholdings | (1,264 | ) | (1,305 | ) | (2,909 | ) | (3,173 | ) | (1,538 | ) | (1,207 | ) | (4,447 | ) | (4,380 | ) | ||||||||
Ending balance | (15,799 | ) | (11,650 | ) | (15,799 | ) | (11,650 | ) | (17,280 | ) | (12,832 | ) | (17,280 | ) | (12,832 | ) | ||||||||
Common Stock Issued to Employee Stock Trusts | ||||||||||||||||||||||||
Beginning balance | (3,000 | ) | (2,907 | ) | (2,836 | ) | (2,907 | ) | (2,889 | ) | (2,829 | ) | (2,836 | ) | (2,907 | ) | ||||||||
Share-based award activity | 111 | 78 | (53 | ) | 78 | 24 | 32 | (29 | ) | 110 | ||||||||||||||
Ending balance | (2,889 | ) | (2,829 | ) | (2,889 | ) | (2,829 | ) | (2,865 | ) | (2,797 | ) | (2,865 | ) | (2,797 | ) | ||||||||
Non-Controlling Interests | ||||||||||||||||||||||||
Beginning balance | 1,168 | 1,455 | 1,160 | 1,075 | 1,121 | 1,397 | 1,160 | 1,075 | ||||||||||||||||
Net income applicable to non-controlling interests | 45 | 30 | 84 | 66 | 45 | 42 | 129 | 108 | ||||||||||||||||
Net change in Accumulated other comprehensive income (loss) | 9 | (9 | ) | (22 | ) | 63 | 2 | (59 | ) | (20 | ) | 4 | ||||||||||||
Other net increases (decreases) | (101 | ) | (79 | ) | (101 | ) | 193 | — | (9 | ) | (101 | ) | 184 | |||||||||||
Ending balance | 1,121 | 1,397 | 1,121 | 1,397 | 1,168 | 1,371 | 1,168 | 1,371 | ||||||||||||||||
Total Equity | $ | 82,845 | $ | 80,506 | $ | 82,845 | $ | 80,506 | $ | 83,550 | $ | 80,074 | $ | 83,550 | $ | 80,074 |
1. | Cumulative adjustments for accounting changes relate to the adoption of certain accounting updates during the current and prior year periods. See Notes 2 and 14 for further information. |
2. | See Note 14 for information regarding dividends per share for common stock and each class of preferred stock. |
See Notes to Consolidated Financial Statements | 43 |
Consolidated Cash Flow Statements (Unaudited) |
Six Months Ended June 30, | Nine Months Ended September 30, | |||||||||||
$ in millions | 2019 | 2018 | 2019 | 2018 | ||||||||
Cash flows from operating activities | ||||||||||||
Net income | $ | 4,714 | $ | 5,171 | $ | 6,932 | $ | 7,325 | ||||
Adjustments to reconcile net income to net cash provided by (used for) operating activities: | ||||||||||||
Stock-based compensation expense | 592 | 526 | 825 | 743 | ||||||||
Depreciation and amortization | 1,333 | 907 | 1,987 | 1,375 | ||||||||
(Release of) Provision for credit losses on lending activities | 54 | (29 | ) | 104 | (27 | ) | ||||||
Other operating adjustments | (121 | ) | 18 | (114 | ) | (27 | ) | |||||
Changes in assets and liabilities: | ||||||||||||
Trading assets, net of Trading liabilities | 2,621 | 39,106 | 17,036 | 10,039 | ||||||||
Securities borrowed | (17,267 | ) | (29,238 | ) | (16,088 | ) | (18,479 | ) | ||||
Securities loaned | (1,583 | ) | (872 | ) | (2,217 | ) | (1,759 | ) | ||||
Customer and other receivables and other assets | 48 | (9,279 | ) | (5,135 | ) | (4,092 | ) | |||||
Customer and other payables and other liabilities | 11,522 | 9,053 | 22,721 | 310 | ||||||||
Securities purchased under agreements to resell | 13,124 | (9,670 | ) | 5,155 | 15,172 | |||||||
Securities sold under agreements to repurchase | 12,535 | (5,774 | ) | 9,703 | 3,904 | |||||||
Net cash provided by (used for) operating activities | 27,572 | (81 | ) | 40,909 | 14,484 | |||||||
Cash flows from investing activities | ||||||||||||
Proceeds from (payments for): | ||||||||||||
Other assets—Premises, equipment and software, net | (1,008 | ) | (908 | ) | (1,460 | ) | (1,361 | ) | ||||
Changes in loans, net | (4,886 | ) | (4,560 | ) | (10,079 | ) | (7,697 | ) | ||||
Investment securities: | ||||||||||||
Purchases | (26,061 | ) | (12,388 | ) | (35,078 | ) | (16,836 | ) | ||||
Proceeds from sales | 9,869 | 2,231 | 13,561 | 2,947 | ||||||||
Proceeds from paydowns and maturities | 5,040 | 6,469 | 8,183 | 9,126 | ||||||||
Other investing activities | (776 | ) | (147 | ) | (848 | ) | (245 | ) | ||||
Net cash provided by (used for) investing activities | (17,822 | ) | (9,303 | ) | (25,721 | ) | (14,066 | ) | ||||
Cash flows from financing activities | ||||||||||||
Net proceeds from (payments for): | ||||||||||||
Other secured financings | 214 | (2,275 | ) | (587 | ) | (1,874 | ) | |||||
Deposits | (11,227 | ) | 13,366 | (7,084 | ) | 15,749 | ||||||
Proceeds from issuance of Borrowings | 16,692 | 28,234 | 23,697 | 34,233 | ||||||||
Payments for: | ||||||||||||
Borrowings | (18,513 | ) | (22,981 | ) | (30,391 | ) | (28,235 | ) | ||||
Repurchases of common stock and employee tax withholdings | (2,909 | ) | (3,173 | ) | (4,447 | ) | (4,380 | ) | ||||
Cash dividends | (1,412 | ) | (1,115 | ) | (2,082 | ) | (1,788 | ) | ||||
Other financing activities | (106 | ) | (230 | ) | (286 | ) | (343 | ) | ||||
Net cash provided by (used for) financing activities | (17,261 | ) | 11,826 | (21,180 | ) | 13,362 | ||||||
Effect of exchange rate changes on cash and cash equivalents | (105 | ) | (1,248 | ) | (1,548 | ) | (1,694 | ) | ||||
Net increase (decrease) in cash and cash equivalents | (7,616 | ) | 1,194 | (7,540 | ) | 12,086 | ||||||
Cash and cash equivalents, at beginning of period | 87,196 | 80,395 | 87,196 | 80,395 | ||||||||
Cash and cash equivalents, at end of period | $ | 79,580 | $ | 81,589 | $ | 79,656 | $ | 92,481 | ||||
Cash and cash equivalents: | ||||||||||||
Cash and due from banks | $ | 38,257 | $ | 30,176 | $ | 35,721 | $ | 36,641 | ||||
Interest bearing deposits with banks | 10,888 | 18,707 | 13,196 | 22,638 | ||||||||
Restricted cash | 30,435 | 32,706 | 30,739 | 33,202 | ||||||||
Cash and cash equivalents, at end of period | $ | 79,580 | $ | 81,589 | $ | 79,656 | $ | 92,481 | ||||
Supplemental Disclosure of Cash Flow Information | ||||||||||||
Cash payments for: | ||||||||||||
Interest | $ | 6,311 | $ | 3,934 | $ | 9,760 | $ | 6,818 | ||||
Income taxes, net of refunds | 1,115 | 790 | 1,603 | 1,009 |
44 | See Notes to Consolidated Financial Statements |
Notes to Consolidated Financial Statements (Unaudited) |
45 |
Notes to Consolidated Financial Statements (Unaudited) |
At June 30, 2019 | At September 30, 2019 | |||||||||||||||||||||||||||||
$ in millions | Level 1 | Level 2 | Level 3 | Netting1 | Total | Level 1 | Level 2 | Level 3 | Netting1 | Total | ||||||||||||||||||||
Assets at fair value | ||||||||||||||||||||||||||||||
Trading assets: | ||||||||||||||||||||||||||||||
U.S. Treasury and agency securities | $ | 55,358 | $ | 27,102 | $ | 5 | $ | — | $ | 82,465 | $ | 44,129 | $ | 25,280 | $ | 18 | $ | — | $ | 69,427 | ||||||||||
Other sovereign government obligations | 32,032 | 5,221 | 10 | — | 37,263 | 33,333 | 5,512 | 12 | — | 38,857 | ||||||||||||||||||||
State and municipal securities | — | 3,335 | 16 | — | 3,351 | — | 3,080 | 1 | — | 3,081 | ||||||||||||||||||||
MABS | — | 1,471 | 480 | — | 1,951 | — | 1,593 | 401 | — | 1,994 | ||||||||||||||||||||
Loans and lending commitments2 | — | 5,452 | 5,604 | — | 11,056 | — | 5,155 | 4,869 | — | 10,024 | ||||||||||||||||||||
Corporate and other debt | — | 19,872 | 1,364 | — | 21,236 | — | 21,646 | 1,390 | — | 23,036 | ||||||||||||||||||||
Corporate equities3 | 90,741 | 463 | 98 | — | 91,302 | 92,191 | 459 | 103 | — | 92,753 | ||||||||||||||||||||
Derivative and other contracts: | Derivative and other contracts: | Derivative and other contracts: | ||||||||||||||||||||||||||||
Interest rate | 3,158 | 190,360 | 1,359 | — | 194,877 | 1,965 | 220,709 | 1,502 | — | 224,176 | ||||||||||||||||||||
Credit | — | 5,540 | 786 | — | 6,326 | — | 6,870 | 849 | — | 7,719 | ||||||||||||||||||||
Foreign exchange | 15 | 56,361 | 21 | — | 56,397 | 55 | 64,477 | 100 | — | 64,632 | ||||||||||||||||||||
Equity | 1,632 | 41,040 | 1,401 | — | 44,073 | 982 | 46,836 | 1,082 | — | 48,900 | ||||||||||||||||||||
Commodity and other | 1,081 | 9,200 | 3,042 | — | 13,323 | 1,305 | 6,866 | 3,099 | — | 11,270 | ||||||||||||||||||||
Netting1 | (4,645 | ) | (228,574 | ) | (1,073 | ) | (47,940 | ) | (282,232 | ) | (3,686 | ) | (265,103 | ) | (1,122 | ) | (54,162 | ) | (324,073 | ) | ||||||||||
Total derivative and other contracts | 1,241 | 73,927 | 5,536 | (47,940 | ) | 32,764 | 621 | 80,655 | 5,510 | (54,162 | ) | 32,624 | ||||||||||||||||||
Investments4 | 516 | 275 | 785 | — | 1,576 | 514 | 200 | 785 | — | 1,499 | ||||||||||||||||||||
Physical commodities | — | 908 | — | — | 908 | — | 1,022 | — | — | 1,022 | ||||||||||||||||||||
Total trading assets4 | 179,888 | 138,026 | 13,898 | (47,940 | ) | 283,872 | ||||||||||||||||||||||||
Total trading assets | 170,788 | 144,602 | 13,089 | (54,162 | ) | 274,317 | ||||||||||||||||||||||||
Investment securities—AFS | 33,692 | 29,346 | — | — | 63,038 | 34,931 | 29,783 | — | — | 64,714 | ||||||||||||||||||||
Securities purchased under agreements to resell | — | 4 | — | — | 4 | — | 4 | — | — | 4 | ||||||||||||||||||||
Total assets at fair value | $ | 213,580 | $ | 167,376 | $ | 13,898 | $ | (47,940 | ) | $ | 346,914 | $ | 205,719 | $ | 174,389 | $ | 13,089 | $ | (54,162 | ) | $ | 339,035 |
46 |
Notes to Consolidated Financial Statements (Unaudited) |
At June 30, 2019 | At September 30, 2019 | |||||||||||||||||||||||||||||
$ in millions | Level 1 | Level 2 | Level 3 | Netting1 | Total | Level 1 | Level 2 | Level 3 | Netting1 | Total | ||||||||||||||||||||
Liabilities at fair value | ||||||||||||||||||||||||||||||
Deposits | $ | — | $ | 796 | $ | 138 | $ | — | $ | 934 | $ | — | $ | 1,477 | $ | 145 | $ | — | $ | 1,622 | ||||||||||
Trading liabilities: | ||||||||||||||||||||||||||||||
U.S. Treasury and agency securities | 12,309 | 423 | — | — | 12,732 | 12,826 | 194 | 1 | — | 13,021 | ||||||||||||||||||||
Other sovereign government obligations | 22,769 | 1,960 | 1 | — | 24,730 | 22,090 | 1,593 | 3 | — | 23,686 | ||||||||||||||||||||
Corporate and other debt | — | 7,753 | 2 | — | 7,755 | — | 7,968 | 4 | — | 7,972 | ||||||||||||||||||||
Corporate equities3 | 61,937 | 198 | 33 | — | 62,168 | 63,197 | 95 | 32 | — | 63,324 | ||||||||||||||||||||
Derivative and other contracts: | Derivative and other contracts: | Derivative and other contracts: | ||||||||||||||||||||||||||||
Interest rate | 2,872 | 179,899 | 543 | — | 183,314 | 1,730 | 211,860 | 714 | — | 214,304 | ||||||||||||||||||||
Credit | — | 5,967 | 924 | — | 6,891 | — | 7,361 | 744 | — | 8,105 | ||||||||||||||||||||
Foreign exchange | 7 | 59,147 | 50 | — | 59,204 | 13 | 66,223 | 48 | — | 66,284 | ||||||||||||||||||||
Equity | 1,366 | 41,795 | 3,116 | — | 46,277 | 987 | 46,484 | 2,463 | — | 49,934 | ||||||||||||||||||||
Commodity and other | 1,246 | 6,779 | 1,181 | — | 9,206 | 1,324 | 6,456 | 1,125 | — | 8,905 | ||||||||||||||||||||
Netting1 | (4,645 | ) | (228,574 | ) | (1,073 | ) | (38,580 | ) | (272,872 | ) | (3,686 | ) | (265,103 | ) | (1,122 | ) | (42,219 | ) | (312,130 | ) | ||||||||||
Total derivative and other contracts | 846 | 65,013 | 4,741 | (38,580 | ) | 32,020 | 368 | 73,281 | 3,972 | (42,219 | ) | 35,402 | ||||||||||||||||||
Total trading liabilities | 97,861 | 75,347 | 4,777 | (38,580 | ) | 139,405 | 98,481 | 83,131 | 4,012 | (42,219 | ) | 143,405 | ||||||||||||||||||
Securities sold under agreements to repurchase | — | 658 | — | — | 658 | — | 732 | — | — | 732 | ||||||||||||||||||||
Other secured financings | — | 8,322 | 154 | — | 8,476 | — | 6,242 | 110 | — | 6,352 | ||||||||||||||||||||
Borrowings | — | 57,570 | 3,939 | — | 61,509 | — | 58,116 | 3,538 | — | 61,654 | ||||||||||||||||||||
Total liabilities at fair value | $ | 97,861 | $ | 142,693 | $ | 9,008 | $ | (38,580 | ) | $ | 210,982 | $ | 98,481 | $ | 149,698 | $ | 7,805 | $ | (42,219 | ) | $ | 213,765 |
At December 31, 2018 | At December 31, 2018 | |||||||||||||||||||||||||||||
$ in millions | Level 1 | Level 2 | Level 3 | Netting1 | Total | Level 1 | Level 2 | Level 3 | Netting1 | Total | ||||||||||||||||||||
Assets at fair value | ||||||||||||||||||||||||||||||
Trading assets: | ||||||||||||||||||||||||||||||
U.S. Treasury and agency securities | $ | 38,767 | $ | 29,594 | $ | 54 | $ | — | $ | 68,415 | $ | 38,767 | $ | 29,594 | $ | 54 | $ | — | $ | 68,415 | ||||||||||
Other sovereign government obligations | 28,395 | 5,529 | 17 | — | 33,941 | 28,395 | 5,529 | 17 | — | 33,941 | ||||||||||||||||||||
State and municipal securities | — | 3,161 | 148 | — | 3,309 | — | 3,161 | 148 | — | 3,309 | ||||||||||||||||||||
MABS | — | 2,154 | 354 | — | 2,508 | — | 2,154 | 354 | — | 2,508 | ||||||||||||||||||||
Loans and lending commitments2 | — | 4,055 | 6,870 | — | 10,925 | — | 4,055 | 6,870 | — | 10,925 | ||||||||||||||||||||
Corporate and other debt | — | 18,129 | 1,076 | — | 19,205 | — | 18,129 | 1,076 | — | 19,205 | ||||||||||||||||||||
Corporate equities3 | 93,626 | 522 | 95 | — | 94,243 | 93,626 | 522 | 95 | — | 94,243 | ||||||||||||||||||||
Derivative and other contracts: | Derivative and other contracts: | Derivative and other contracts: | ||||||||||||||||||||||||||||
Interest rate | 2,793 | 155,027 | 1,045 | — | 158,865 | 2,793 | 155,027 | 1,045 | — | 158,865 | ||||||||||||||||||||
Credit | — | 5,707 | 421 | — | 6,128 | — | 5,707 | 421 | — | 6,128 | ||||||||||||||||||||
Foreign exchange | 62 | 63,023 | 161 | — | 63,246 | 62 | 63,023 | 161 | — | 63,246 | ||||||||||||||||||||
Equity | 1,256 | 45,596 | 1,022 | — | 47,874 | 1,256 | 45,596 | 1,022 | — | 47,874 | ||||||||||||||||||||
Commodity and other | 963 | 8,517 | 2,992 | — | 12,472 | 963 | 8,517 | 2,992 | — | 12,472 | ||||||||||||||||||||
Netting1 | (4,151 | ) | (210,190 | ) | (896 | ) | (44,175 | ) | (259,412 | ) | (4,151 | ) | (210,190 | ) | (896 | ) | (44,175 | ) | (259,412 | ) | ||||||||||
Total derivative and other contracts | 923 | 67,680 | 4,745 | (44,175 | ) | 29,173 | 923 | 67,680 | 4,745 | (44,175 | ) | 29,173 | ||||||||||||||||||
Investments4 | 412 | 293 | 757 | — | 1,462 | 412 | 293 | 757 | — | 1,462 | ||||||||||||||||||||
Physical commodities | — | 536 | — | — | 536 | — | 536 | — | — | 536 | ||||||||||||||||||||
Total trading assets4 | 162,123 | 131,653 | 14,116 | (44,175 | ) | 263,717 | ||||||||||||||||||||||||
Total trading assets | 162,123 | 131,653 | 14,116 | (44,175 | ) | 263,717 | ||||||||||||||||||||||||
Investment securities—AFS | 36,399 | 24,662 | — | — | 61,061 | 36,399 | 24,662 | — | — | 61,061 | ||||||||||||||||||||
Intangible assets | — | 5 | — | — | 5 | — | 5 | — | — | 5 | ||||||||||||||||||||
Total assets at fair value | $ | 198,522 | $ | 156,320 | $ | 14,116 | $ | (44,175 | ) | $ | 324,783 | $ | 198,522 | $ | 156,320 | $ | 14,116 | $ | (44,175 | ) | $ | 324,783 |
47 |
Notes to Consolidated Financial Statements (Unaudited) |
At December 31, 2018 | |||||||||||||||
$ in millions | Level 1 | Level 2 | Level 3 | Netting1 | Total | ||||||||||
Liabilities at fair value | |||||||||||||||
Deposits | $ | — | $ | 415 | $ | 27 | $ | — | $ | 442 | |||||
Trading liabilities: | |||||||||||||||
U.S. Treasury and agency securities | 11,272 | 543 | — | — | 11,815 | ||||||||||
Other sovereign government obligations | 21,391 | 1,454 | — | — | 22,845 | ||||||||||
Corporate and other debt | — | 8,550 | 1 | — | 8,551 | ||||||||||
Corporate equities3 | 56,064 | 199 | 15 | — | 56,278 | ||||||||||
Derivative and other contracts: | |||||||||||||||
Interest rate | 2,927 | 142,746 | 427 | — | 146,100 | ||||||||||
Credit | — | 5,772 | 381 | — | 6,153 | ||||||||||
Foreign exchange | 41 | 63,379 | 86 | — | 63,506 | ||||||||||
Equity | 1,042 | 47,091 | 2,507 | — | 50,640 | ||||||||||
Commodity and other | 1,228 | 6,872 | 940 | — | 9,040 | ||||||||||
Netting1 | (4,151 | ) | (210,190 | ) | (896 | ) | (32,944 | ) | (248,181 | ) | |||||
Total derivative and other contracts | 1,087 | 55,670 | 3,445 | (32,944 | ) | 27,258 | |||||||||
Total trading liabilities | 89,814 | 66,416 | 3,461 | (32,944 | ) | 126,747 | |||||||||
Securities sold under agreements to repurchase | — | 812 | — | — | 812 | ||||||||||
Other secured financings | — | 5,037 | 208 | — | 5,245 | ||||||||||
Borrowings | — | 47,378 | 3,806 | — | 51,184 | ||||||||||
Total liabilities at fair value | $ | 89,814 | $ | 120,058 | $ | 7,502 | $ | (32,944 | ) | $ | 184,430 |
1. | For positions with the same counterparty classified in different levels of the fair value hierarchy, both counterparty netting and cash collateral netting are included in the column titled “Netting.” Positions classified within the same level that are with the same counterparty are netted within the column for that level. For further information on derivative instruments and hedging activities, see Note 4. |
2. | For a further breakdown by type, see the following Breakdown of Loans and Lending Commitments at Fair Value table. |
3. | For trading purposes, the Firm holds or sells short equity securities issued by entities in diverse industries and of varying sizes. |
4. | Amounts exclude certain investments that are measured based on NAV per share, which are not classified in the fair value hierarchy. For additional disclosure about such investments, see “Net Asset Value Measurements—Fund Interests” herein. |
$ in millions | At June 30, 2019 | At December 31, 2018 | At September 30, 2019 | At December 31, 2018 | ||||||||
Corporate | $ | 8,241 | $ | 9,171 | $ | 7,387 | $ | 9,171 | ||||
Residential real estate | 1,274 | 1,153 | 1,206 | 1,153 | ||||||||
Commercial real estate | 1,541 | 601 | 1,431 | 601 | ||||||||
Total | $ | 11,056 | $ | 10,925 | $ | 10,024 | $ | 10,925 |
$ in millions | At June 30, 2019 | At December 31, 2018 | At September 30, 2019 | At December 31, 2018 | ||||||||
Customer and other receivables, net | $ | 507 | $ | 615 | $ | 501 | $ | 615 |
1. | These contracts are primarily Level 1, actively traded, valued based on quoted prices from the exchange and are excluded from the previous recurring fair value tables. |
Three Months Ended June 30, | Six Months Ended June 30, | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||
$ in millions | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | Assets at Fair value | U.S. Treasury and agency securities | ||||||||||||||
Beginning balance | $ | 7 | $ | — | $ | 54 | $ | — | $ | 5 | $ | — | $ | 54 | $ | — | ||||||||
Purchases | 5 | — | 5 | — | 11 | 5 | 18 | 5 | ||||||||||||||||
Sales | (4 | ) | — | (54 | ) | — | — | — | (54 | ) | — | |||||||||||||
Net transfers | (3 | ) | — | — | — | 2 | — | — | — | |||||||||||||||
Ending balance | $ | 5 | $ | — | $ | 5 | $ | — | $ | 18 | $ | 5 | $ | 18 | $ | 5 | ||||||||
Unrealized gains (losses) | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | Other sovereign government obligations | |||||||
Beginning balance | $ | 5 | $ | 7 | $ | 17 | $ | 1 | $ | 10 | $ | 5 | $ | 17 | $ | 1 | ||||||||
Realized and unrealized gains (losses) | — | (3 | ) | — | — | (3 | ) | — | (2 | ) | — | |||||||||||||
Purchases | 8 | 2 | 8 | 4 | 2 | 32 | 13 | 35 | ||||||||||||||||
Sales | (3 | ) | (1 | ) | (4 | ) | — | (2 | ) | (2 | ) | (6 | ) | — | ||||||||||
Settlements | — | — | — | — | ||||||||||||||||||||
Net transfers | — | — | (11 | ) | — | 5 | 1 | (10 | ) | — | ||||||||||||||
Ending balance | $ | 10 | $ | 5 | $ | 10 | $ | 5 | $ | 12 | $ | 36 | $ | 12 | $ | 36 | ||||||||
Unrealized gains (losses) | $ | — | $ | — | $ | — | $ | — | $ | (3 | ) | $ | — | $ | (2 | ) | $ | — | State and municipal securities | |||||
Beginning balance | $ | 12 | $ | 2 | $ | 148 | $ | 8 | $ | 16 | $ | 2 | $ | 148 | $ | 8 | ||||||||
Realized and unrealized gains (losses) | — | — | — | — | — | — | — | — | ||||||||||||||||
Purchases | 15 | 1 | 15 | 1 | — | 2 | — | 3 | ||||||||||||||||
Sales | (11 | ) | (1 | ) | (43 | ) | (7 | ) | (2 | ) | — | (43 | ) | (7 | ) | |||||||||
Net transfers | — | — | (104 | ) | — | (13 | ) | — | (104 | ) | — | |||||||||||||
Ending balance | $ | 16 | $ | 2 | $ | 16 | $ | 2 | $ | 1 | $ | 4 | $ | 1 | $ | 4 | ||||||||
Unrealized gains (losses) | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | MABS | |||||||
Beginning balance | $ | 301 | $ | 342 | $ | 354 | $ | 423 | $ | 480 | $ | 327 | $ | 354 | $ | 423 | ||||||||
Realized and unrealized gains (losses) | (5 | ) | — | 3 | 76 | (10 | ) | (1 | ) | (9 | ) | 88 | ||||||||||||
Purchases | 52 | 35 | 63 | 74 | 5 | 23 | 66 | 73 | ||||||||||||||||
Sales | (43 | ) | (88 | ) | (133 | ) | (282 | ) | (58 | ) | (46 | ) | (157 | ) | (317 | ) | ||||||||
Settlements | (19 | ) | (7 | ) | (22 | ) | (12 | ) | — | (14 | ) | (39 | ) | (16 | ) | |||||||||
Net transfers | 194 | 45 | 215 | 48 | (16 | ) | 27 | 186 | 65 | |||||||||||||||
Ending balance | $ | 480 | $ | 327 | $ | 480 | $ | 327 | $ | 401 | $ | 316 | $ | 401 | $ | 316 | ||||||||
Unrealized gains (losses) | $ | (12 | ) | $ | (6 | ) | $ | (24 | ) | $ | — | $ | (8 | ) | $ | (8 | ) | $ | (38 | ) | $ | (6 | ) | Loans and lending commitments |
Beginning balance | $ | 6,343 | $ | 8,128 | $ | 6,870 | $ | 5,945 | $ | 5,604 | $ | 6,923 | $ | 6,870 | $ | 5,945 | ||||||||
Realized and unrealized gains (losses) | 73 | (62 | ) | 44 | (6 | ) | (51 | ) | 17 | 3 | 16 | |||||||||||||
Purchases and originations | 957 | 1,726 | 1,548 | 3,841 | 852 | 2,076 | 1,934 | 4,030 | ||||||||||||||||
Sales | (1,021 | ) | (615 | ) | (588 | ) | (913 | ) | (464 | ) | (1,184 | ) | (1,541 | ) | (978 | ) | ||||||||
Settlements | (733 | ) | (1,781 | ) | (1,487 | ) | (1,531 | ) | (811 | ) | (777 | ) | (2,130 | ) | (1,926 | ) | ||||||||
Net transfers | (15 | ) | (473 | ) | (783 | ) | (413 | ) | (261 | ) | (320 | ) | (267 | ) | (352 | ) | ||||||||
Ending balance | $ | 5,604 | $ | 6,923 | $ | 5,604 | $ | 6,923 | $ | 4,869 | $ | 6,735 | $ | 4,869 | $ | 6,735 | ||||||||
Unrealized gains (losses) | $ | 66 | $ | (78 | ) | $ | 44 | $ | (61 | ) | $ | (55 | ) | $ | 12 | $ | 283 | $ | (8 | ) | ||||
48 |
Notes to Consolidated Financial Statements (Unaudited) |
Three Months Ended June 30, | Six Months Ended June 30, | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||
$ in millions | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | Corporate and other debt | |||||||||||||||
Beginning balance | $ | 1,061 | $ | 814 | $ | 1,076 | $ | 701 | $ | 1,364 | $ | 701 | $ | 1,076 | $ | 701 | ||||||||
Realized and unrealized gains (losses) | 86 | 37 | 161 | 43 | 157 | (4 | ) | 269 | 51 | |||||||||||||||
Purchases | 407 | 166 | 428 | 366 | 341 | 109 | 632 | 276 | ||||||||||||||||
Sales | (101 | ) | (194 | ) | (267 | ) | (165 | ) | (474 | ) | (153 | ) | (587 | ) | (227 | ) | ||||||||
Settlements | (3 | ) | (3 | ) | (5 | ) | (1 | ) | — | (6 | ) | (7 | ) | (8 | ) | |||||||||
Net transfers | (86 | ) | (119 | ) | (29 | ) | (243 | ) | 2 | 63 | 7 | (83 | ) | |||||||||||
Ending balance | $ | 1,364 | $ | 701 | $ | 1,364 | $ | 701 | $ | 1,390 | $ | 710 | $ | 1,390 | $ | 710 | ||||||||
Unrealized gains (losses) | $ | 85 | $ | 5 | $ | 152 | $ | 6 | $ | 114 | $ | 9 | $ | 217 | $ | 16 | Corporate equities | |||||||
Beginning balance | $ | 152 | $ | 233 | $ | 95 | $ | 166 | $ | 98 | $ | 171 | $ | 95 | $ | 166 | ||||||||
Realized and unrealized gains (losses) | (12 | ) | (4 | ) | (10 | ) | 2 | 1 | (7 | ) | (41 | ) | 17 | |||||||||||
Purchases | 21 | 21 | 28 | 43 | 5 | 15 | 44 | 69 | ||||||||||||||||
Sales | (13 | ) | (25 | ) | (31 | ) | (49 | ) | (16 | ) | (50 | ) | (268 | ) | (134 | ) | ||||||||
Net transfers | (50 | ) | (54 | ) | 16 | 9 | 15 | (23 | ) | 273 | (12 | ) | ||||||||||||
Ending balance | $ | 98 | $ | 171 | $ | 98 | $ | 171 | $ | 103 | $ | 106 | $ | 103 | $ | 106 | ||||||||
Unrealized gains (losses) | $ | (10 | ) | $ | (3 | ) | $ | (7 | ) | $ | (7 | ) | $ | 7 | $ | 5 | $ | (38 | ) | $ | 14 | Investments | ||
Beginning balance | $ | 974 | $ | 1,012 | $ | 757 | $ | 1,020 | $ | 785 | $ | 941 | $ | 757 | $ | 1,020 | ||||||||
Realized and unrealized gains (losses) | 26 | (8 | ) | 38 | 23 | (15 | ) | 5 | 19 | 5 | ||||||||||||||
Purchases | 9 | 17 | 14 | 64 | 7 | 72 | 28 | 134 | ||||||||||||||||
Sales | (32 | ) | (28 | ) | (36 | ) | (133 | ) | (7 | ) | (103 | ) | (43 | ) | (209 | ) | ||||||||
Net transfers | (192 | ) | (52 | ) | 12 | (33 | ) | 15 | (97 | ) | 24 | (132 | ) | |||||||||||
Ending balance | $ | 785 | $ | 941 | $ | 785 | $ | 941 | $ | 785 | $ | 818 | $ | 785 | $ | 818 | ||||||||
Unrealized gains (losses) | $ | 29 | $ | 2 | $ | 38 | $ | 7 | $ | (12 | ) | $ | 2 | $ | 22 | $ | 5 | Net derivative and other contracts: | Interest rate | |||||
Beginning balance | $ | 551 | $ | 670 | $ | 618 | $ | 1,218 | $ | 816 | $ | 567 | $ | 618 | $ | 1,218 | ||||||||
Realized and unrealized gains (losses) | 238 | (75 | ) | 183 | (1 | ) | (40 | ) | (3 | ) | 143 | (46 | ) | |||||||||||
Purchases | 53 | 61 | 59 | 69 | 69 | 12 | 132 | 84 | ||||||||||||||||
Issuances | (19 | ) | (24 | ) | (30 | ) | (51 | ) | (11 | ) | (9 | ) | (22 | ) | (38 | ) | ||||||||
Settlements | (1 | ) | (45 | ) | (15 | ) | (131 | ) | 2 | (2 | ) | 16 | (92 | ) | ||||||||||
Net transfers | (6 | ) | (20 | ) | 1 | (537 | ) | (48 | ) | 12 | (99 | ) | (549 | ) | ||||||||||
Ending balance | $ | 816 | $ | 567 | $ | 816 | $ | 567 | $ | 788 | $ | 577 | $ | 788 | $ | 577 | ||||||||
Unrealized gains (losses) | $ | 230 | $ | (99 | ) | $ | 234 | $ | (13 | ) | $ | 120 | $ | 24 | $ | 214 | $ | (47 | ) | Credit | ||||
Beginning balance | $ | (261 | ) | $ | (30 | ) | $ | 40 | $ | 41 | $ | (138 | ) | $ | (2 | ) | $ | 40 | $ | 41 | ||||
Realized and unrealized gains (losses) | 30 | 111 | 217 | (22 | ) | (183 | ) | (39 | ) | 36 | (17 | ) | ||||||||||||
Purchases | 28 | 15 | 93 | 4 | 44 | 4 | 103 | 9 | ||||||||||||||||
Issuances | (19 | ) | (41 | ) | (470 | ) | (40 | ) | (19 | ) | — | (162 | ) | (40 | ) | |||||||||
Settlements | 39 | (57 | ) | (8 | ) | 17 | 389 | 58 | 90 | 30 | ||||||||||||||
Net transfers | 45 | — | (10 | ) | (2 | ) | 12 | — | (2 | ) | (2 | ) | ||||||||||||
Ending balance | $ | (138 | ) | $ | (2 | ) | $ | (138 | ) | $ | (2 | ) | $ | 105 | $ | 21 | $ | 105 | $ | 21 | ||||
Unrealized gains (losses) | $ | 30 | $ | 115 | $ | 224 | $ | (28 | ) | $ | 20 | $ | (41 | ) | $ | 41 | $ | (20 | ) | |||||
Three Months Ended June 30, | Six Months Ended June 30, | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||
$ in millions | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | Foreign exchange | |||||||||||||||
Beginning balance | $ | 5 | $ | (33 | ) | $ | 75 | $ | (112 | ) | $ | (29 | ) | $ | (26 | ) | $ | 75 | $ | (112 | ) | |||
Realized and unrealized gains (losses) | (33 | ) | 37 | (154 | ) | 96 | 67 | (35 | ) | (83 | ) | 71 | ||||||||||||
Purchases | — | — | — | — | — | — | — | 2 | ||||||||||||||||
Issuances | — | (19 | ) | — | (46 | ) | — | — | — | (48 | ) | |||||||||||||
Settlements | (22 | ) | (3 | ) | (12 | ) | 46 | 5 | 2 | — | 43 | |||||||||||||
Net transfers | 21 | (8 | ) | 62 | (10 | ) | 9 | 15 | 60 | — | ||||||||||||||
Ending balance | $ | (29 | ) | $ | (26 | ) | $ | (29 | ) | $ | (26 | ) | $ | 52 | $ | (44 | ) | $ | 52 | $ | (44 | ) | ||
Unrealized gains (losses) | $ | (37 | ) | $ | 43 | $ | (45 | ) | $ | 28 | $ | 79 | $ | (9 | ) | $ | 26 | $ | 1 | Equity | ||||
Beginning balance | $ | (1,760 | ) | $ | 1,015 | $ | (1,485 | ) | $ | 1,208 | $ | (1,715 | ) | $ | (1,535 | ) | $ | (1,485 | ) | $ | 1,208 | |||
Realized and unrealized gains (losses) | 86 | 51 | (92 | ) | 163 | (61 | ) | (149 | ) | 59 | 83 | |||||||||||||
Purchases | 60 | 29 | 96 | 94 | 36 | 29 | 75 | 120 | ||||||||||||||||
Issuances | (158 | ) | (191 | ) | (359 | ) | (930 | ) | (207 | ) | (138 | ) | (227 | ) | (1,052 | ) | ||||||||
Settlements | 43 | 185 | 185 | 294 | (56 | ) | 84 | (173 | ) | 319 | ||||||||||||||
Net transfers | 14 | (2,624 | ) | (60 | ) | (2,364 | ) | 622 | 38 | 370 | (2,349 | ) | ||||||||||||
Ending balance | $ | (1,715 | ) | $ | (1,535 | ) | $ | (1,715 | ) | $ | (1,535 | ) | $ | (1,381 | ) | $ | (1,671 | ) | $ | (1,381 | ) | $ | (1,671 | ) |
Unrealized gains (losses) | $ | 70 | $ | (14 | ) | $ | (106 | ) | $ | 135 | $ | (86 | ) | $ | (132 | ) | $ | 81 | $ | 19 | Commodity and other | |||
Beginning balance | $ | 2,106 | $ | 1,660 | $ | 2,052 | $ | 1,446 | $ | 1,861 | $ | 2,032 | $ | 2,052 | $ | 1,446 | ||||||||
Realized and unrealized gains (losses) | (145 | ) | 170 | (113 | ) | 392 | 120 | (29 | ) | 35 | 332 | |||||||||||||
Purchases | 8 | 1 | 16 | 35 | 126 | — | 145 | 80 | ||||||||||||||||
Issuances | (2 | ) | (3 | ) | (17 | ) | (6 | ) | (36 | ) | (11 | ) | (71 | ) | (18 | ) | ||||||||
Settlements | (106 | ) | 122 | (183 | ) | 7 | (107 | ) | (1 | ) | (307 | ) | 17 | |||||||||||
Net transfers | — | 82 | 106 | 158 | 10 | 29 | 120 | 163 | ||||||||||||||||
Ending balance | $ | 1,861 | $ | 2,032 | $ | 1,861 | $ | 2,032 | $ | 1,974 | $ | 2,020 | $ | 1,974 | $ | 2,020 | ||||||||
Unrealized gains (losses) | $ | (272 | ) | $ | 107 | $ | (306 | ) | $ | 230 | $ | 33 | $ | (105 | ) | $ | (89 | ) | $ | 33 | Liabilities at Fair Value | Deposits | ||
Beginning balance | $ | 99 | $ | 44 | $ | 27 | $ | 47 | $ | 138 | $ | 37 | $ | 27 | $ | 47 | ||||||||
Realized and unrealized losses (gains) | 6 | (1 | ) | 12 | (1 | ) | 5 | 2 | 16 | (1 | ) | |||||||||||||
Issuances | 24 | 5 | 51 | 10 | 23 | 11 | 70 | 27 | ||||||||||||||||
Settlements | (4 | ) | — | (4 | ) | (1 | ) | (8 | ) | — | (12 | ) | (2 | ) | ||||||||||
Net transfers | 13 | (11 | ) | 52 | (18 | ) | (13 | ) | 23 | 44 | 2 | |||||||||||||
Ending balance | $ | 138 | $ | 37 | $ | 138 | $ | 37 | $ | 145 | $ | 73 | $ | 145 | $ | 73 | ||||||||
Unrealized losses (gains) | $ | 6 | $ | (1 | ) | $ | 12 | $ | (1 | ) | $ | 5 | $ | 2 | $ | 16 | $ | (1 | ) | Nonderivative trading liabilities | ||||
Beginning balance | $ | 43 | $ | 39 | $ | 16 | $ | 25 | $ | 36 | $ | 25 | $ | 16 | $ | 25 | ||||||||
Realized and unrealized losses (gains) | (9 | ) | (3 | ) | (10 | ) | (6 | ) | (7 | ) | — | (37 | ) | (4 | ) | |||||||||
Purchases | (24 | ) | (17 | ) | (30 | ) | (19 | ) | (13 | ) | (12 | ) | (31 | ) | (15 | ) | ||||||||
Sales | 11 | 7 | 28 | 22 | 6 | 3 | 36 | 12 | ||||||||||||||||
Net transfers | 15 | (1 | ) | 32 | 3 | 18 | (2 | ) | 56 | (4 | ) | |||||||||||||
Ending balance | $ | 36 | $ | 25 | $ | 36 | $ | 25 | $ | 40 | $ | 14 | $ | 40 | $ | 14 | ||||||||
Unrealized losses (gains) | $ | (9 | ) | $ | (2 | ) | $ | (10 | ) | $ | (4 | ) | $ | (7 | ) | $ | — | $ | (37 | ) | $ | (4 | ) | |
49 |
Notes to Consolidated Financial Statements (Unaudited) |
Three Months Ended June 30, | Six Months Ended June 30, | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||
$ in millions | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | Securities sold under agreements to repurchase | |||||||||||||||
Beginning balance | $ | — | $ | — | $ | — | $ | 150 | $ | — | $ | — | $ | — | $ | 150 | ||||||||
Net transfers | — | — | — | (150 | ) | — | — | — | (150 | ) | ||||||||||||||
Ending balance | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||
Unrealized losses (gains) | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||
Other secured financings | Other secured financings | Other secured financings | ||||||||||||||||||||||
Beginning balance | $ | 153 | $ | 220 | $ | 208 | $ | 239 | $ | 154 | $ | 170 | $ | 208 | $ | 239 | ||||||||
Realized and unrealized losses (gains) | 2 | (5 | ) | 6 | (17 | ) | (1 | ) | 2 | 5 | (16 | ) | ||||||||||||
Issuances | — | 4 | — | 7 | — | — | — | 8 | ||||||||||||||||
Settlements | (1 | ) | (8 | ) | (8 | ) | (18 | ) | — | — | (8 | ) | (18 | ) | ||||||||||
Net transfers | — | (41 | ) | (52 | ) | (41 | ) | (43 | ) | — | (95 | ) | (41 | ) | ||||||||||
Ending balance | $ | 154 | $ | 170 | $ | 154 | $ | 170 | $ | 110 | $ | 172 | $ | 110 | $ | 172 | ||||||||
Unrealized losses (gains) | $ | 2 | $ | (5 | ) | $ | 6 | $ | (17 | ) | $ | (1 | ) | $ | 2 | $ | 5 | $ | (16 | ) | Borrowings | |||
Beginning balance | $ | 3,775 | $ | 3,626 | $ | 3,806 | $ | 2,984 | $ | 3,939 | $ | 3,295 | $ | 3,806 | $ | 2,984 | ||||||||
Realized and unrealized losses (gains) | 172 | (130 | ) | 444 | (201 | ) | 88 | 56 | 498 | (156 | ) | |||||||||||||
Issuances | 354 | 306 | 598 | 825 | 201 | 344 | 610 | 1,275 | ||||||||||||||||
Settlements | (99 | ) | (141 | ) | (243 | ) | (195 | ) | (260 | ) | (81 | ) | (438 | ) | (339 | ) | ||||||||
Net transfers | (263 | ) | (366 | ) | (666 | ) | (118 | ) | (430 | ) | 6 | (938 | ) | (144 | ) | |||||||||
Ending balance | $ | 3,939 | $ | 3,295 | $ | 3,939 | $ | 3,295 | $ | 3,538 | $ | 3,620 | $ | 3,538 | $ | 3,620 | ||||||||
Unrealized losses (gains) | $ | 173 | $ | (133 | ) | $ | 419 | $ | (199 | ) | $ | 91 | $ | 55 | $ | 459 | $ | (168 | ) | |||||
Portion of Unrealized losses (gains) recorded in OCI—Change in net DVA | 35 | (16 | ) | 91 | (119 | ) | (23 | ) | 82 | 68 | (45 | ) |
Balance / Range (Average)1 | Balance / Range (Average)1 | |||||||||||
$ in millions, except inputs | At June 30, 2019 | At December 31, 2018 | At September 30, 2019 | At December 31, 2018 | Assets Measured at Fair Value on a Recurring Basis | |||||||
MABS | $ | 480 | $ | 354 | $ | 401 | $ | 354 | ||||
Comparable pricing: | Comparable pricing: | Comparable pricing: | ||||||||||
Bond price | 1 to 97 points (50 points) | 0 to 97 points (38 points) | 0 to 97 points (47 points) | 0 to 97 points (38 points) | ||||||||
Loans and lending commitments | $ | 5,604 | $ | 6,870 | $ | 4,869 | $ | 6,870 | ||||
Margin loan model: | ||||||||||||
Discount rate | 1% to 6% (2%) | 1% to 7% (2%) | 1% to 7% (2%) | 1% to 7% (2%) | ||||||||
Volatility skew | 14% to 63% (21%) | 19% to 56% (28%) | 17% to 73% (27%) | 19% to 56% (28%) | ||||||||
Credit Spread | 10 to 63 bps (28 bps) | 14 to 90 bps (36 bps) | 9 to 41 bps (26 bps) | 14 to 90 bps (36 bps) | ||||||||
Comparable pricing: | Comparable pricing: | Comparable pricing: | ||||||||||
Loan price | 76 to 103 points (94 points) | 60 to 101 points (95 points) | 70 to 100 points (93 points) | 60 to 101 points (95 points) | ||||||||
Corporate and other debt | $ | 1,364 | $ | 1,076 | $ | 1,390 | $ | 1,076 | ||||
Comparable pricing: | Comparable pricing: | Comparable pricing: | ||||||||||
Bond price | 12 to 100 points (75 points) | 12 to 100 points (72 points) | 12 to 105 points (82 points) | 12 to 100 points (72 points) | ||||||||
Discounted cash flow: | Discounted cash flow: | Discounted cash flow: | ||||||||||
Recovery rate | 27 | % | 20 | % | 36 | % | 20 | % | ||||
Discount rate | N/M | 15% to 21% (16%) | N/M | 15% to 21% (16%) | ||||||||
Option model: | ||||||||||||
At the money volatility | 20 | % | 24% to 78% (50%) | 21 | % | 24% to 78% (50%) | ||||||
Corporate equities | $ | 98 | $ | 95 | $ | 103 | $ | 95 | ||||
Comparable pricing: | Comparable pricing: | Comparable pricing: | ||||||||||
Equity price | 100 | % | 100 | % | 100 | % | 100 | % | ||||
Investments | $ | 785 | $ | 757 | $ | 785 | $ | 757 | ||||
Discounted cash flow: | Discounted cash flow: | Discounted cash flow: | ||||||||||
WACC | 14% to 17% (15%) | 9% to 15% (10%) | 15% to 16% (15%) | 9% to 15% (10%) | ||||||||
Exit multiple | 7 to 15 times (11 times) | 7 to 10 times (10 times) | 7 to 16 times (11 times) | 7 to 10 times (10 times) | ||||||||
Market approach: | ||||||||||||
EBITDA multiple | 6 to 25 times (11 times) | 6 to 24 times (12 times) | 7 to 25 times (11 times) | 6 to 24 times (12 times) | ||||||||
Comparable pricing: | Comparable pricing: | Comparable pricing: | ||||||||||
Equity price | 75% to 100% (99%) | 75% to 100% (96%) | 75% to 100% (99%) | 75% to 100% (96%) | ||||||||
Net derivative and other contracts: | Net derivative and other contracts: | Net derivative and other contracts: | ||||||||||
Interest rate | $ | 816 | $ | 618 | $ | 788 | $ | 618 | ||||
Option model: | ||||||||||||
IR volatility skew | 25% to 127% (74% / 63%) | 22% to 95% (48% / 51%) | 34% to 163% (71% / 71%) | 22% to 95% (48% / 51%) | ||||||||
Contingency probability | 90% to 95% (93% / 93%) | N/M | 95% | N/M | ||||||||
IR curve correlation | 37% to 89% (66% / 67%) | N/M | ||||||||||
Bond volatility | 4% to 19% (14% / 14%) | N/M | ||||||||||
Inflation volatility | 23% to 62% (43% / 40%) | 23% to 65% (44% / 40%) | 23% to 62% (43% / 40%) | 23% to 65% (44% / 40%) | ||||||||
IR curve | 1 | % | 1 | % | 1 | % | 1 | % | ||||
50 |
Notes to Consolidated Financial Statements (Unaudited) |
Balance / Range (Average)1 | Balance / Range (Average)1 | |||||||||||
$ in millions, except inputs | At June 30, 2019 | At December 31, 2018 | At September 30, 2019 | At December 31, 2018 | ||||||||
Credit | $ | (138 | ) | $ | 40 | $ | 105 | $ | 40 | |||
Comparable pricing: | Comparable pricing: | Comparable pricing: | ||||||||||
Cash-synthetic basis | 12 points | 8 to 9 points (9 points) | 6 points | 8 to 9 points (9 points) | ||||||||
Bond price | 0 to 83 points (39 points) | 0 to 75 points (26 points) | 0 to 103 points (55 points) | 0 to 75 points (26 points) | ||||||||
Credit spread | 12 to 499 bps (100 bps) | 246 to 499 bps (380 bps) | 9 to 507 bps (91 bps) | 246 to 499 bps (380 bps) | ||||||||
Funding spread | 63 to 105 bps (95 bps) | 47 to 98 bps (93 bps) | 69 to 131 bps (100 bps) | 47 to 98 bps (93 bps) | ||||||||
Correlation model: | ||||||||||||
Credit correlation | 31% to 64% (38%) | 36% to 69% (44%) | 32% to 62% (36%) | 36% to 69% (44%) | ||||||||
Foreign exchange2 | $ | (29 | ) | $ | 75 | $ | 52 | $ | 75 | |||
Option model: | ||||||||||||
IR FX correlation | 29% to 57% (46% / 46%) | 53% to 56% (55% / 55%) | ||||||||||
IR - FX correlation | 29% to 56% (47% / 47%) | 53% to 56% (55% / 55%) | ||||||||||
IR volatility skew | 25% to 127% (74% / 63%) | 22% to 95% (48% / 51%) | 34% to 163% (71% / 71%) | 22% to 95% (48% / 51%) | ||||||||
IR curve | 10% to 11% (10% / 10%) | N/M | ||||||||||
Contingency probability | 67% to 97% (82% / 82%) | 90% to 95% (93% / 95%) | 85% to 95% (92% / 95%) | 90% to 95% (93% / 95%) | ||||||||
Equity2 | $ | (1,715 | ) | $ | (1,485 | ) | $ | (1,381 | ) | $ | (1,485 | ) |
Option model: | ||||||||||||
At the money volatility | 6% to 72% (36%) | 17% to 63% (38%) | 13% to 81% (35%) | 17% to 63% (38%) | ||||||||
Volatility skew | -2% to 0% (-1%) | -2% to 0% (-1%) | -2% to 0% (-1%) | -2% to 0% (-1%) | ||||||||
Equity correlation | 5% to 96% (71%) | 5% to 96% (71%) | 5% to 96% (68%) | 5% to 96% (71%) | ||||||||
FX correlation | -60% to 55% (-17%) | -60% to 55% (-26%) | -60% to 55% (-25%) | -60% to 55% (-26%) | ||||||||
IR correlation | -7% to 44% (16% / 13%) | -7% to 45% (15% / 12%) | -8% to 44% (17% / 15%) | -7% to 45% (15% / 12%) | ||||||||
Commodity and other | $ | 1,861 | $ | 2,052 | $ | 1,974 | $ | 2,052 | ||||
Option model: | ||||||||||||
Forward power price | $4 to $118 ($28) per MWh | 3 to $185 ($31) per MWh | $5 to $178 ($28) per MWh | 3 to $185 ($31) per MWh | ||||||||
Commodity volatility | 7% to 213% (16%) | 7% to 187% (17%) | 1% to 96% (19%) | 7% to 187% (17%) | ||||||||
Cross-commodity correlation | 5% to 99% (93%) | 5% to 99% (93%) | 43% to 99% (93%) | 5% to 99% (93%) | Liabilities Measured at Fair Value on a Recurring Basis | |||||||
Deposits | $ | 138 | $ | 27 | $ | 145 | $ | 27 | ||||
Option Model: | ||||||||||||
At the money volatility | 20% to 30% (22%) | N/M | 20% to 39% (21%) | N/M | ||||||||
Other secured financings | $ | 154 | $ | 208 | $ | 110 | $ | 208 | ||||
Discounted cash flow: | Discounted cash flow: | Discounted cash flow: | ||||||||||
Funding spread | 111 to 155 bps (133 bps) | 103 to 193 bps (148 bps) | 107 to 122 bps (115 bps) | 103 to 193 bps (148 bps) | ||||||||
Option model: | ||||||||||||
Volatility skew | N/M | -1 | % | N/M | -1 | % | ||||||
At the money volatility | 10% to 40% (30%) | 10% to 40% (25%) | 25% to 28% (28%) | 10% to 40% (25%) | ||||||||
Borrowings | $ | 3,939 | $ | 3,806 | $ | 3,538 | $ | 3,806 | ||||
Option model: | ||||||||||||
At the money volatility | 6% to 35% (21%) | 5% to 35% (22%) | 6% to 45% (22%) | 5% to 35% (22%) | ||||||||
Volatility skew | -1% to 0% (0%) | -2% to 0% (0%) | -2% to 0% (0%) | -2% to 0% (0%) | ||||||||
Equity correlation | 38% to 94% (75%) | 45% to 98% (85%) | 39% to 94% (80%) | 45% to 98% (85%) | ||||||||
Equity - FX correlation | -72% to 30% (-28%) | -75% to 50% (-27%) | -70% to 30% (-22%) | -75% to 50% (-27%) | ||||||||
IR Correlation | N/M | 58% to 97% (85% / 91%) | N/M | 58% to 97% (85% / 91%) | ||||||||
IR FX Correlation | 25% to 58% (38% / 34%) | 28% to 58% (44% / 44%) | ||||||||||
IR - FX Correlation | -33% to 7% (-8% / -8%) | 28% to 58% (44% / 44%) |
Balance / Range (Average)1 | Balance / Range (Average)1 | |||||||||||
$ in millions, except inputs | At June 30, 2019 | At December 31, 2018 | At September 30, 2019 | At December 31, 2018 | Nonrecurring Fair Value Measurement | |||||||
Loans | $ | 1,298 | $ | 1,380 | $ | 1,665 | $ | 1,380 | ||||
Corporate loan model: | Corporate loan model: | Corporate loan model: | ||||||||||
Credit spread | 58 to 448 bps (202 bps) | 97 to 434 bps (181 bps) | 54 to 435 bps (220 bps) | 97 to 434 bps (181 bps) | ||||||||
Warehouse model: | ||||||||||||
Credit spread | 264 to 271 bps (266 bps) | 223 to 313 bps (247 bps) | 183 to 317 bps (220 bps) | 223 to 313 bps (247 bps) |
1. | A single amount is disclosed for range and average when there is no significant difference between the minimum, maximum and average. Amounts represent weighted averages except where simple averages and the median of the inputs are more relevant. |
2. | Includes derivative contracts with multiple risks (i.e., hybrid products). |
At June 30, 2019 | At December 31, 2018 | At September 30, 2019 | At December 31, 2018 | |||||||||||||||||||||
$ in millions | Carrying Value | Commitment | Carrying Value | Commitment | Carrying Value | Commitment | Carrying Value | Commitment | ||||||||||||||||
Private equity | $ | 1,545 | $ | 368 | $ | 1,374 | $ | 316 | $ | 1,542 | $ | 363 | $ | 1,374 | $ | 316 | ||||||||
Real estate | 1,452 | 155 | 1,105 | 161 | 1,469 | 153 | 1,105 | 161 | ||||||||||||||||
Hedge1 | 96 | 4 | 103 | 4 | 95 | 4 | 103 | 4 | ||||||||||||||||
Total | $ | 3,093 | $ | 527 | $ | 2,582 | $ | 481 | $ | 3,106 | $ | 520 | $ | 2,582 | $ | 481 |
1. | Investments in hedge funds may be subject to initial period lock-up or gate provisions, which restrict an investor from withdrawing from the fund during a certain initial period or restrict the redemption amount on any redemption date, respectively. |
51 |
Notes to Consolidated Financial Statements (Unaudited) |
Carrying Value at June 30, 2019 | Carrying Value at September 30, 2019 | |||||||||||
$ in millions | Private Equity | Real Estate | Private Equity | Real Estate | ||||||||
Less than 5 years | $ | 802 | $ | 634 | $ | 765 | $ | 1,151 | ||||
5-10 years | 720 | 740 | 753 | 230 | ||||||||
Over 10 years | 23 | 78 | 24 | 88 | ||||||||
Total | $ | 1,545 | $ | 1,452 | $ | 1,542 | $ | 1,469 |
$ in millions | At June 30, 2019 | At December 31, 2018 | At September 30, 2019 | At December 31, 2018 | Business Unit Responsible for Risk Management | |||||||
Equity | $ | 29,459 | $ | 24,494 | $ | 29,508 | $ | 24,494 | ||||
Interest rates | 26,343 | 22,343 | 26,427 | 22,343 | ||||||||
Commodities | 3,975 | 2,735 | 3,973 | 2,735 | ||||||||
Credit | 1,159 | 856 | 1,229 | 856 | ||||||||
Foreign exchange | 573 | 756 | 517 | 756 | ||||||||
Total | $ | 61,509 | $ | 51,184 | $ | 61,654 | $ | 51,184 |
Three Months Ended June 30, | Six Months Ended June 30, | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||
$ in millions | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||
Trading revenues | $ | (2,190 | ) | $ | 859 | $ | (5,093 | ) | $ | 885 | $ | (795 | ) | $ | 449 | $ | (5,888 | ) | $ | 1,334 | ||||
Interest expense | (94 | ) | (73 | ) | (187 | ) | (175 | ) | 93 | 59 | 280 | 234 | ||||||||||||
Net revenues1 | $ | (2,284 | ) | $ | 786 | $ | (5,280 | ) | $ | 710 | $ | (888 | ) | $ | 390 | $ | (6,168 | ) | $ | 1,100 |
1. | Amounts do not reflect any gains or losses from related economic hedges. |
Three Months Ended June 30, | Three Months Ended September 30, | |||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||||||||||
$ in millions | Trading Revenues | OCI | Trading Revenues | OCI | Trading Revenues | OCI | Trading Revenues | OCI | ||||||||||||||||
Borrowings | $ | (3 | ) | $ | (328 | ) | $ | (3 | ) | $ | 842 | $ | (2 | ) | $ | 442 | $ | (4 | ) | $ | (1,010 | ) | ||
Loans and other debt1 | 58 | — | 63 | — | (3 | ) | — | 55 | — | |||||||||||||||
Lending commitments | (1 | ) | — | 1 | — | — | — | (6 | ) | — | ||||||||||||||
Other | — | 1 | — | — | — | 1 | (32 | ) | 28 |
Six Months Ended June 30, | Nine Months Ended September 30, | |||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||||||||||
$ in millions | Trading Revenues | OCI | Trading Revenues | OCI | Trading Revenues | OCI | Trading Revenues | OCI | ||||||||||||||||
Borrowings | $ | (7 | ) | $ | (1,144 | ) | $ | (18 | ) | $ | 1,435 | $ | (9 | ) | $ | (702 | ) | $ | (22 | ) | $ | 425 | ||
Loans and other debt1 | 151 | — | 144 | — | 148 | — | 199 | — | ||||||||||||||||
Lending commitments | (2 | ) | — | 3 | — | (2 | ) | — | (3 | ) | — | |||||||||||||
Other | — | (3 | ) | — | 2 | — | (2 | ) | (32 | ) | 32 |
$ in millions | At June 30, 2019 | At December 31, 2018 | At September 30, 2019 | At December 31, 2018 | ||||||||
Cumulative pre-tax DVA gain (loss) recognized in AOCI | $ | (975 | ) | $ | 172 | $ | (532 | ) | $ | 172 |
1. | Loans and other debt instrument-specific credit gains (losses) were determined by excluding the non-credit components of gains and losses. |
$ in millions | At June 30, 2019 | At December 31, 2018 | At September 30, 2019 | At December 31, 2018 | ||||||||
Loans and other debt2 | $ | 13,064 | $ | 13,094 | $ | 13,154 | $ | 13,094 | ||||
Nonaccrual loans2 | 10,950 | 10,831 | 10,919 | 10,831 | ||||||||
Borrowings3 | (503 | ) | 2,657 | (986 | ) | 2,657 |
1. | Amounts indicate contractual principal greater than or (less than) fair value. |
2. | The majority of the difference between principal and fair value amounts for loans and other debt relates to distressed debt positions purchased at amounts well below par. |
3. | Borrowings in this table do not include structured notes where the repayment of the initial principal amount fluctuates based on changes in a reference price or index. |
$ in millions | At June 30, 2019 | At December 31, 2018 | At September 30, 2019 | At December 31, 2018 | ||||||||
Nonaccrual loans | $ | 971 | $ | 1,497 | $ | 839 | $ | 1,497 | ||||
Nonaccrual loans 90 or more days past due | $ | 526 | $ | 812 | $ | 452 | $ | 812 |
52 |
Notes to Consolidated Financial Statements (Unaudited) |
At June 30, 2019 | At September 30, 2019 | |||||||||||||||||
Fair Value | Fair Value | |||||||||||||||||
$ in millions | Level 2 | Level 31 | Total | Level 2 | Level 31 | Total | ||||||||||||
Assets | ||||||||||||||||||
Loans | $ | 2,065 | $ | 1,298 | $ | 3,363 | $ | 1,513 | $ | 1,665 | $ | 3,178 | ||||||
Other assets—Other investments | — | 30 | 30 | — | 26 | 26 | ||||||||||||
Other assets—Premises, equipment and software | — | — | — | — | — | — | ||||||||||||
Total | $ | 2,065 | $ | 1,328 | $ | 3,393 | $ | 1,513 | $ | 1,691 | $ | 3,204 | ||||||
Liabilities | ||||||||||||||||||
Other liabilities and accrued expenses—Lending commitments | $ | 168 | $ | 55 | $ | 223 | $ | (161 | ) | $ | (64 | ) | $ | (225 | ) | |||
Total | $ | 168 | $ | 55 | $ | 223 | $ | (161 | ) | $ | (64 | ) | $ | (225 | ) |
At December 31, 2018 | |||||||||
Fair Value | |||||||||
$ in millions | Level 2 | Level 31 | Total | ||||||
Assets | |||||||||
Loans | $ | 2,307 | $ | 1,380 | $ | 3,687 | |||
Other assets—Other investments | 14 | 100 | 114 | ||||||
Other assets—Premises, equipment and software | — | — | — | ||||||
Total | $ | 2,321 | $ | 1,480 | $ | 3,801 | |||
Liabilities | |||||||||
Other liabilities and accrued expenses—Lending commitments | $ | 292 | $ | 65 | $ | 357 | |||
Total | $ | 292 | $ | 65 | $ | 357 |
1. | For significant Level 3 balances, refer to “Significant Unobservable Inputs Used in Recurring and Nonrecurring Level 3 Fair Value Measurements” section herein for details of the significant unobservable inputs used for nonrecurring fair value measurement. |
Three Months Ended June 30, | Six Months Ended June 30, | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||
$ in millions | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||
Assets | ||||||||||||||||||||||||
Loans2 | $ | (10 | ) | $ | (1 | ) | $ | 17 | $ | 8 | $ | (27 | ) | $ | (5 | ) | $ | (12 | ) | $ | 1 | |||
Other assets—Other investments | — | (7 | ) | (5 | ) | (7 | ) | (3 | ) | (2 | ) | (8 | ) | (9 | ) | |||||||||
Other assets—Premises, equipment and software | (2 | ) | (2 | ) | (4 | ) | (10 | ) | (4 | ) | (3 | ) | (8 | ) | (13 | ) | ||||||||
Total | $ | (12 | ) | $ | (10 | ) | $ | 8 | $ | (9 | ) | $ | (34 | ) | $ | (10 | ) | $ | (28 | ) | $ | (21 | ) | |
Liabilities | ||||||||||||||||||||||||
Other liabilities and accrued expenses—Lending commitments2 | $ | 7 | $ | (30 | ) | $ | 74 | $ | (12 | ) | $ | (19 | ) | $ | 31 | $ | 82 | $ | 41 | |||||
Total | $ | 7 | $ | (30 | ) | $ | 74 | $ | (12 | ) | $ | (19 | ) | $ | 31 | $ | 82 | $ | 41 |
1. | Gains and losses for Loans and Other assets—Other investments are classified in Other revenues. For other items, gains and losses are recorded in Other revenues if the item is held for sale; otherwise they are recorded in Other expenses. |
2. | Nonrecurring changes in the fair value of loans and lending commitments were calculated as follows: for the held-for-investment category, based on the value of the underlying collateral; and for the held-for-sale category, based on recently executed transactions, market price quotations, valuation models that incorporate market observable inputs where possible, such as comparable loan or debt prices and CDS spread levels adjusted for any basis difference between cash and derivative instruments, or default recovery analysis where such transactions and quotations are unobservable. |
53 |
Notes to Consolidated Financial Statements (Unaudited) |
At June 30, 2019 | At September 30, 2019 | |||||||||||||||||||||||||||||
Carrying Value | Fair Value | Carrying Value | Fair Value | |||||||||||||||||||||||||||
$ in millions | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||
Financial assets | Financial assets | Financial assets | ||||||||||||||||||||||||||||
Cash and cash equivalents: | Cash and cash equivalents: | Cash and cash equivalents: | ||||||||||||||||||||||||||||
Cash and due from banks | $ | 38,257 | $ | 38,257 | $ | — | $ | — | $ | 38,257 | $ | 35,721 | $ | 35,721 | $ | — | $ | — | $ | 35,721 | ||||||||||
Interest bearing deposits with banks | 10,888 | 10,888 | — | — | 10,888 | 13,196 | 13,196 | — | — | 13,196 | ||||||||||||||||||||
Restricted cash | 30,435 | 30,435 | — | — | 30,435 | 30,739 | 30,739 | — | — | 30,739 | ||||||||||||||||||||
Investment securities—HTM | 40,028 | 25,672 | 14,243 | 604 | 40,519 | 41,076 | 27,816 | 13,513 | 662 | 41,991 | ||||||||||||||||||||
Securities purchased under agreements to resell | 85,394 | — | 84,026 | 1,435 | 85,461 | 93,363 | — | 91,966 | 1,374 | 93,340 | ||||||||||||||||||||
Securities borrowed | 133,580 | — | 133,581 | — | 133,581 | 132,401 | — | 132,406 | — | 132,406 | ||||||||||||||||||||
Customer and other receivables1 | 48,423 | — | 45,511 | 2,845 | 48,356 | 54,784 | — | 51,855 | 2,880 | 54,735 | ||||||||||||||||||||
Loans2 | 120,901 | — | 22,661 | 98,563 | 121,224 | 125,522 | — | 23,119 | 102,403 | 125,522 | ||||||||||||||||||||
Other assets | 461 | — | 461 | — | 461 | 474 | — | 474 | — | 474 | ||||||||||||||||||||
Financial liabilities | Financial liabilities | Financial liabilities | ||||||||||||||||||||||||||||
Deposits | $ | 175,659 | $ | — | $ | 175,954 | $ | — | $ | 175,954 | $ | 179,116 | $ | — | $ | 179,536 | $ | — | $ | 179,536 | ||||||||||
Securities sold under agreements to repurchase | 61,636 | — | 61,083 | 525 | 61,608 | 58,730 | — | 58,724 | — | 58,724 | ||||||||||||||||||||
Securities loaned | 10,325 | — | 10,324 | — | 10,324 | 9,691 | — | 9,694 | — | 9,694 | ||||||||||||||||||||
Other secured financings | 3,505 | — | 3,508 | — | 3,508 | 3,484 | — | 3,488 | — | 3,488 | ||||||||||||||||||||
Customer and other payables1 | 188,622 | — | 188,622 | — | 188,622 | 199,944 | — | 199,944 | — | 199,944 | ||||||||||||||||||||
Borrowings | 136,339 | — | 140,512 | 11 | 140,523 | 132,005 | — | 135,409 | 10 | 135,419 | ||||||||||||||||||||
Commitment Amount | Commitment Amount | |||||||||||||||||||||||||||||
Lending commitments3 | $ | 125,417 | $ | — | $ | 919 | $ | 325 | $ | 1,244 | $ | 118,524 | $ | — | $ | 889 | $ | 348 | $ | 1,237 |
At December 31, 2018 | |||||||||||||||
Carrying Value | Fair Value | ||||||||||||||
$ in millions | Level 1 | Level 2 | Level 3 | Total | |||||||||||
Financial assets | |||||||||||||||
Cash and cash equivalents: | |||||||||||||||
Cash and due from banks | $ | 30,541 | $ | 30,541 | $ | — | $ | — | $ | 30,541 | |||||
Interest bearing deposits with banks | 21,299 | 21,299 | — | — | 21,299 | ||||||||||
Restricted cash | 35,356 | 35,356 | — | — | 35,356 | ||||||||||
Investment securities—HTM | 30,771 | 17,473 | 12,018 | 474 | 29,965 | ||||||||||
Securities purchased under agreements to resell | 98,522 | — | 97,611 | 866 | 98,477 | ||||||||||
Securities borrowed | 116,313 | — | 116,312 | — | 116,312 | ||||||||||
Customer and other receivables1 | 47,972 | — | 44,620 | 3,219 | 47,839 | ||||||||||
Loans2 | 115,579 | — | 25,604 | 90,121 | 115,725 | ||||||||||
Other assets | 461 | — | 461 | — | 461 | ||||||||||
Financial liabilities | |||||||||||||||
Deposits | $ | 187,378 | $ | — | $ | 187,372 | $ | — | $ | 187,372 | |||||
Securities sold under agreements to repurchase | 48,947 | — | 48,385 | 525 | 48,910 | ||||||||||
Securities loaned | 11,908 | — | 11,906 | — | 11,906 | ||||||||||
Other secured financings | 4,221 | — | 3,233 | 994 | 4,227 | ||||||||||
Customer and other payables1 | 176,561 | — | 176,561 | — | 176,561 | ||||||||||
Borrowings | 138,478 | — | 140,085 | 30 | 140,115 | ||||||||||
Commitment Amount | |||||||||||||||
Lending commitments3 | $ | 104,844 | $ | — | $ | 1,249 | $ | 321 | $ | 1,570 |
1. | Accrued interest and dividend receivables and payables, where carrying value approximates fair value, have been |
2. | Amounts include loans measured at fair value on a nonrecurring basis. |
3. | Represents Lending Commitments accounted for as Held for |
54 |
Notes to Consolidated Financial Statements (Unaudited) |
Assets | Assets | |||||||||||||||||||||||
$ in millions | Bilateral OTC | Cleared OTC | Exchange- Traded | Total | Bilateral OTC | Cleared OTC | Exchange- Traded | Total | ||||||||||||||||
Designated as accounting hedges | Designated as accounting hedges | Designated as accounting hedges | ||||||||||||||||||||||
Interest rate | $ | 604 | $ | 2 | $ | — | $ | 606 | $ | 761 | $ | 2 | $ | — | $ | 763 | ||||||||
Foreign exchange | 1 | 5 | — | 6 | 114 | 8 | — | 122 | ||||||||||||||||
Total | 605 | 7 | — | 612 | 875 | 10 | — | 885 | ||||||||||||||||
Not designated as accounting hedges | Not designated as accounting hedges | Not designated as accounting hedges | ||||||||||||||||||||||
Interest rate | 187,449 | 5,417 | 1,405 | 194,271 | 216,358 | 6,090 | 965 | 223,413 | ||||||||||||||||
Credit | 4,438 | 1,888 | — | 6,326 | 4,932 | 2,787 | — | 7,719 | ||||||||||||||||
Foreign exchange | 54,977 | 1,369 | 45 | 56,391 | 63,326 | 1,069 | 115 | 64,510 | ||||||||||||||||
Equity | 23,127 | — | 20,946 | 44,073 | 26,395 | — | 22,505 | 48,900 | ||||||||||||||||
Commodity and other | 10,902 | — | 2,421 | 13,323 | 8,797 | — | 2,473 | 11,270 | ||||||||||||||||
Total | 280,893 | 8,674 | 24,817 | 314,384 | 319,808 | 9,946 | 26,058 | 355,812 | ||||||||||||||||
Total gross derivatives | $ | 281,498 | $ | 8,681 | $ | 24,817 | $ | 314,996 | $ | 320,683 | $ | 9,956 | $ | 26,058 | $ | 356,697 | ||||||||
Amounts offset | ||||||||||||||||||||||||
Counterparty netting | (208,559 | ) | (6,936 | ) | (23,321 | ) | (238,816 | ) | (242,002 | ) | (8,580 | ) | (24,298 | ) | (274,880 | ) | ||||||||
Cash collateral netting | (42,075 | ) | (1,341 | ) | — | (43,416 | ) | (47,994 | ) | (1,199 | ) | — | (49,193 | ) | ||||||||||
Total in Trading assets | $ | 30,864 | $ | 404 | $ | 1,496 | $ | 32,764 | $ | 30,687 | $ | 177 | $ | 1,760 | $ | 32,624 | ||||||||
Amounts not offset1 | ||||||||||||||||||||||||
Financial instruments collateral | (13,536 | ) | — | — | (13,536 | ) | (14,340 | ) | — | — | (14,340 | ) | ||||||||||||
Other cash collateral | (41 | ) | — | — | (41 | ) | (35 | ) | — | — | (35 | ) | ||||||||||||
Net amounts | $ | 17,287 | $ | 404 | $ | 1,496 | $ | 19,187 | $ | 16,312 | $ | 177 | $ | 1,760 | $ | 18,249 | ||||||||
Net amounts for which master netting or collateral agreements are not in place or may not be legally enforceable | Net amounts for which master netting or collateral agreements are not in place or may not be legally enforceable | $ | 2,083 | Net amounts for which master netting or collateral agreements are not in place or may not be legally enforceable | $ | 2,132 |
Liabilities | Liabilities | |||||||||||||||||||||||
$ in millions | Bilateral OTC | Cleared OTC | Exchange- Traded | Total | Bilateral OTC | Cleared OTC | Exchange- Traded | Total | ||||||||||||||||
Designated as accounting hedges | Designated as accounting hedges | Designated as accounting hedges | ||||||||||||||||||||||
Interest rate | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 1 | $ | — | $ | 1 | ||||||||
Foreign exchange | 130 | 43 | — | 173 | 26 | 19 | — | 45 | ||||||||||||||||
Total | 130 | 43 | — | 173 | 26 | 20 | — | 46 | ||||||||||||||||
Not designated as accounting hedges | Not designated as accounting hedges | Not designated as accounting hedges | ||||||||||||||||||||||
Interest rate | 178,461 | 3,724 | 1,129 | 183,314 | 208,515 | 4,956 | 832 | 214,303 | ||||||||||||||||
Credit | 4,491 | 2,400 | — | 6,891 | 4,649 | 3,456 | — | 8,105 | ||||||||||||||||
Foreign exchange | 57,499 | 1,490 | 42 | 59,031 | 65,081 | 1,092 | 66 | 66,239 | ||||||||||||||||
Equity | 25,358 | — | 20,919 | 46,277 | 27,820 | — | 22,114 | 49,934 | ||||||||||||||||
Commodity and other | 6,742 | — | 2,464 | 9,206 | 6,690 | — | 2,215 | 8,905 | ||||||||||||||||
Total | 272,551 | 7,614 | 24,554 | 304,719 | 312,755 | 9,504 | 25,227 | 347,486 | ||||||||||||||||
Total gross derivatives | $ | 272,681 | $ | 7,657 | $ | 24,554 | $ | 304,892 | $ | 312,781 | $ | 9,524 | $ | 25,227 | $ | 347,532 | ||||||||
Amounts offset | ||||||||||||||||||||||||
Counterparty netting | (208,559 | ) | (6,936 | ) | (23,321 | ) | (238,816 | ) | (242,002 | ) | (8,580 | ) | (24,298 | ) | (274,880 | ) | ||||||||
Cash collateral netting | (33,408 | ) | (648 | ) | — | (34,056 | ) | (36,520 | ) | (730 | ) | — | (37,250 | ) | ||||||||||
Total in Trading liabilities | $ | 30,714 | $ | 73 | $ | 1,233 | $ | 32,020 | $ | 34,259 | $ | 214 | $ | 929 | $ | 35,402 | ||||||||
Amounts not offset1 | ||||||||||||||||||||||||
Financial instruments collateral | (11,291 | ) | — | (488 | ) | (11,779 | ) | (15,526 | ) | — | (323 | ) | (15,849 | ) | ||||||||||
Other cash collateral | (39 | ) | (10 | ) | — | (49 | ) | (26 | ) | (27 | ) | — | (53 | ) | ||||||||||
Net amounts | $ | 19,384 | $ | 63 | $ | 745 | $ | 20,192 | $ | 18,707 | $ | 187 | $ | 606 | $ | 19,500 | ||||||||
Net amounts for which master netting or collateral agreements are not in place or may not be legally enforceable | Net amounts for which master netting or collateral agreements are not in place or may not be legally enforceable | $ | 3,247 | Net amounts for which master netting or collateral agreements are not in place or may not be legally enforceable | $ | 3,054 |
Assets | ||||||||||||
$ in millions | Bilateral OTC | Cleared OTC | Exchange- Traded | Total | ||||||||
Designated as accounting hedges | ||||||||||||
Interest rate | $ | 512 | $ | 1 | $ | — | $ | 513 | ||||
Foreign exchange | 27 | 8 | — | 35 | ||||||||
Total | 539 | 9 | — | 548 | ||||||||
Not designated as accounting hedges | ||||||||||||
Interest rate | 153,768 | 3,887 | 697 | 158,352 | ||||||||
Credit | 4,630 | 1,498 | — | 6,128 | ||||||||
Foreign exchange | 61,846 | 1,310 | 55 | 63,211 | ||||||||
Equity | 24,590 | — | 23,284 | 47,874 | ||||||||
Commodity and other | 10,538 | — | 1,934 | 12,472 | ||||||||
Total | 255,372 | 6,695 | 25,970 | 288,037 | ||||||||
Total gross derivatives | $ | 255,911 | $ | 6,704 | $ | 25,970 | $ | 288,585 | ||||
Amounts offset | ||||||||||||
Counterparty netting | (190,220 | ) | (5,260 | ) | (24,548 | ) | (220,028 | ) | ||||
Cash collateral netting | (38,204 | ) | (1,180 | ) | — | (39,384 | ) | |||||
Total in Trading assets | $ | 27,487 | $ | 264 | $ | 1,422 | $ | 29,173 | ||||
Amounts not offset1 | ||||||||||||
Financial instruments collateral | (12,467 | ) | — | — | (12,467 | ) | ||||||
Other cash collateral | (31 | ) | — | — | (31 | ) | ||||||
Net amounts | $ | 14,989 | $ | 264 | $ | 1,422 | $ | 16,675 | ||||
Net amounts for which master netting or collateral agreements are not in place or may not be legally enforceable | $ | 2,206 |
Liabilities | ||||||||||||
$ in millions | Bilateral OTC | Cleared OTC | Exchange- Traded | Total | ||||||||
Designated as accounting hedges | ||||||||||||
Interest rate | $ | 176 | $ | — | $ | — | $ | 176 | ||||
Foreign exchange | 62 | 24 | — | 86 | ||||||||
Total | 238 | 24 | — | 262 | ||||||||
Not designated as accounting hedges | ||||||||||||
Interest rate | 142,592 | 2,669 | 663 | 145,924 | ||||||||
Credit | 4,545 | 1,608 | — | 6,153 | ||||||||
Foreign exchange | 62,099 | 1,302 | 19 | 63,420 | ||||||||
Equity | 27,119 | — | 23,521 | 50,640 | ||||||||
Commodity and other | 6,983 | — | 2,057 | 9,040 | ||||||||
Total | 243,338 | 5,579 | 26,260 | 275,177 | ||||||||
Total gross derivatives | $ | 243,576 | $ | 5,603 | $ | 26,260 | $ | 275,439 | ||||
Amounts offset | ||||||||||||
Counterparty netting | (190,220 | ) | (5,260 | ) | (24,548 | ) | (220,028 | ) | ||||
Cash collateral netting | (27,860 | ) | (293 | ) | — | (28,153 | ) | |||||
Total in Trading liabilities | $ | 25,496 | $ | 50 | $ | 1,712 | $ | 27,258 | ||||
Amounts not offset1 | ||||||||||||
Financial instruments collateral | (4,709 | ) | — | (766 | ) | (5,475 | ) | |||||
Other cash collateral | (53 | ) | (1 | ) | — | (54 | ) | |||||
Net amounts | $ | 20,734 | $ | 49 | $ | 946 | $ | 21,729 | ||||
Net amounts for which master netting or collateral agreements are not in place or may not be legally enforceable | $ | 4,773 |
1. | Amounts relate to master netting agreements and collateral agreements that have been determined by the Firm to be legally enforceable in the event of default but where certain other criteria are not met in accordance with applicable offsetting accounting guidance. |
55 |
Notes to Consolidated Financial Statements (Unaudited) |
Assets | Assets | |||||||||||||||||||||||
$ in billions | Bilateral OTC | Cleared OTC | Exchange- Traded | Total | Bilateral OTC | Cleared OTC | Exchange- Traded | Total | Designated as accounting hedges | |||||||||||||||
Interest rate | $ | 14 | $ | 132 | $ | — | $ | 146 | $ | 11 | $ | 142 | $ | — | $ | 153 | ||||||||
Foreign exchange | — | 1 | — | 1 | 5 | 1 | — | 6 | ||||||||||||||||
Total | 14 | 133 | — | 147 | 16 | 143 | — | 159 | Not designated as accounting hedges | |||||||||||||||
Interest rate | 4,899 | 8,622 | 1,059 | 14,580 | 4,465 | 8,357 | 858 | 13,680 | ||||||||||||||||
Credit | 121 | 71 | — | 192 | 138 | 92 | — | 230 | ||||||||||||||||
Foreign exchange | 2,781 | 106 | 12 | 2,899 | 3,030 | 119 | 17 | 3,166 | ||||||||||||||||
Equity | 402 | — | 404 | 806 | 404 | — | 432 | 836 | ||||||||||||||||
Commodity and other | 100 | — | 70 | 170 | 105 | — | 69 | 174 | ||||||||||||||||
Total | 8,303 | 8,799 | 1,545 | 18,647 | 8,142 | 8,568 | 1,376 | 18,086 | ||||||||||||||||
Total gross derivatives | $ | 8,317 | $ | 8,932 | $ | 1,545 | $ | 18,794 | $ | 8,158 | $ | 8,711 | $ | 1,376 | $ | 18,245 |
Liabilities | Liabilities | |||||||||||||||||||||||
$ in billions | Bilateral OTC | Cleared OTC | Exchange- Traded | Total | Bilateral OTC | Cleared OTC | Exchange- Traded | Total | Designated as accounting hedges | |||||||||||||||
Interest rate | $ | — | $ | 29 | $ | — | $ | 29 | $ | — | $ | 17 | $ | — | $ | 17 | ||||||||
Foreign exchange | 10 | 1 | — | 11 | 5 | 2 | — | 7 | ||||||||||||||||
Total | 10 | 30 | — | 40 | 5 | 19 | — | 24 | Not designated as accounting hedges | |||||||||||||||
Interest rate | 4,876 | 8,583 | 957 | 14,416 | 4,462 | 8,189 | 794 | 13,445 | ||||||||||||||||
Credit | 139 | 79 | — | 218 | 149 | 105 | — | 254 | ||||||||||||||||
Foreign exchange | 2,885 | 109 | 13 | 3,007 | 2,985 | 119 | 15 | 3,119 | ||||||||||||||||
Equity | 407 | — | 460 | 867 | 525 | — | 493 | 1,018 | ||||||||||||||||
Commodity and other | 90 | — | 66 | 156 | 84 | — | 66 | 150 | ||||||||||||||||
Total | 8,397 | 8,771 | 1,496 | 18,664 | 8,205 | 8,413 | 1,368 | 17,986 | ||||||||||||||||
Total gross derivatives | $ | 8,407 | $ | 8,801 | $ | 1,496 | $ | 18,704 | $ | 8,210 | $ | 8,432 | $ | 1,368 | $ | 18,010 |
Assets | ||||||||||||
$ in billions | Bilateral OTC | Cleared OTC | Exchange- Traded | Total | ||||||||
Designated as accounting hedges | ||||||||||||
Interest rate | $ | 15 | $ | 52 | $ | — | $ | 67 | ||||
Foreign exchange | 5 | 1 | — | 6 | ||||||||
Total | 20 | 53 | — | 73 | ||||||||
Not designated as accounting hedges | ||||||||||||
Interest rate | 4,807 | 6,708 | 1,157 | 12,672 | ||||||||
Credit | 162 | 74 | — | 236 | ||||||||
Foreign exchange | 2,436 | 118 | 14 | 2,568 | ||||||||
Equity | 373 | — | 371 | 744 | ||||||||
Commodity and other | 97 | — | 67 | 164 | ||||||||
Total | 7,875 | 6,900 | 1,609 | 16,384 | ||||||||
Total gross derivatives | $ | 7,895 | $ | 6,953 | $ | 1,609 | $ | 16,457 |
Liabilities | ||||||||||||
$ in billions | Bilateral OTC | Cleared OTC | Exchange- Traded | Total | ||||||||
Designated as accounting hedges | ||||||||||||
Interest rate | $ | 2 | $ | 107 | $ | — | $ | 109 | ||||
Foreign exchange | 5 | 1 | — | 6 | ||||||||
Total | 7 | 108 | — | 115 | ||||||||
Not designated as accounting hedges | ||||||||||||
Interest rate | 4,946 | 5,735 | 781 | 11,462 | ||||||||
Credit | 162 | 73 | — | 235 | ||||||||
Foreign exchange | 2,451 | 114 | 17 | 2,582 | ||||||||
Equity | 389 | — | 602 | 991 | ||||||||
Commodity and other | 72 | — | 65 | 137 | ||||||||
Total | 8,020 | 5,922 | 1,465 | 15,407 | ||||||||
Total gross derivatives | $ | 8,027 | $ | 6,030 | $ | 1,465 | $ | 15,522 |
56 |
Notes to Consolidated Financial Statements (Unaudited) |
Three Months Ended June 30, | Six Months Ended June 30, | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||
$ in millions | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||
Fair Value Hedges—Recognized in Interest Income1 | Fair Value Hedges—Recognized in Interest Income1 | Fair Value Hedges—Recognized in Interest Income1 | ||||||||||||||||||||||
Interest rate contracts | $ | (14 | ) | $ | — | $ | (19 | ) | $ | — | $ | (7 | ) | $ | — | $ | (26 | ) | $ | — | ||||
Investment Securities—AFS | 14 | — | 19 | — | 8 | — | 27 | — | ||||||||||||||||
Fair Value Hedges—Recognized in Interest Expense | Fair Value Hedges—Recognized in Interest Expense | Fair Value Hedges—Recognized in Interest Expense | ||||||||||||||||||||||
Interest rate contracts | $ | 2,470 | $ | (619 | ) | $ | 4,047 | $ | (2,460 | ) | $ | 1,999 | $ | (1,124 | ) | $ | 6,046 | $ | (3,584 | ) | ||||
Borrowings | (2,494 | ) | 587 | (4,115 | ) | 2,439 | (1,996 | ) | 1,124 | (6,111 | ) | 3,563 | ||||||||||||
Net Investment Hedges—Foreign exchange contracts | Net Investment Hedges—Foreign exchange contracts | Net Investment Hedges—Foreign exchange contracts | ||||||||||||||||||||||
Recognized in OCI, net of tax | $ | (114 | ) | $ | 395 | $ | (50 | ) | $ | 247 | $ | 251 | $ | 107 | $ | 201 | $ | 354 | ||||||
Forward points excluded from hedge effectiveness testing—Recognized in Interest income | 42 | 24 | 77 | 31 | 30 | 13 | 107 | 44 |
$ in millions | At June 30, 2019 | At December 31, 2018 | At September 30, 2019 | At December 31, 2018 | ||||||||
Investment Securities—AFS | ||||||||||||
Carrying amount2 currently or previously hedged | $ | 532 | $ | 201 | $ | 689 | $ | 201 | ||||
Basis adjustments included in carrying amount3 | $ | 23 | $ | 4 | $ | 30 | $ | 4 | ||||
Borrowings | ||||||||||||
Carrying amount2 currently or previously hedged | $ | 104,752 | $ | 102,899 | $ | 103,659 | $ | 102,899 | ||||
Basis adjustments included in carrying amount3 | $ | 2,428 | $ | (1,689 | ) | $ | 4,393 | $ | (1,689 | ) |
1. | The Firm began designating interest rate swaps as fair value hedges of certain AFS securities in the third quarter of 2018. |
2. | Carrying amount represents amortized cost basis. |
3. | Hedge accounting basis adjustments for AFS securities and Borrowings are primarily related to outstanding hedges. |
$ in millions | At June 30, 2019 | At December 31, 2018 | At September 30, 2019 | At December 31, 2018 | ||||||||
Net derivative liabilities with credit risk-related contingent features | $ | 22,589 | $ | 16,403 | $ | 27,319 | $ | 16,403 | ||||
Collateral posted | 17,556 | 11,981 | 22,154 | 11,981 |
$ in millions | At June 30, 2019 | At September 30, 2019 | ||||
One-notch downgrade | $ | 492 | $ | 468 | ||
Two-notch downgrade | 339 | 308 | ||||
Bilateral downgrade agreements included in the amounts above1 | $ | 755 | $ | 699 |
1. | Amount represents arrangements between the Firm and other parties where upon the downgrade of one party, the downgraded party must deliver collateral to the other party. These bilateral downgrade arrangements are used by the Firm to manage the risk of counterparty downgrades. |
Years to Maturity at June 30, 2019 | Years to Maturity at September 30, 2019 | |||||||||||||||||||||||||||||
$ in billions | < 1 | 1-3 | 3-5 | Over 5 | Total | < 1 | 1-3 | 3-5 | Over 5 | Total | ||||||||||||||||||||
Single-name CDS | ||||||||||||||||||||||||||||||
Investment grade | $ | 17 | $ | 20 | $ | 24 | $ | 9 | $ | 70 | $ | 16 | $ | 18 | $ | 26 | $ | 16 | $ | 76 | ||||||||||
Non-investment grade | 9 | 11 | 10 | 2 | 32 | 8 | 9 | 12 | 5 | 34 | ||||||||||||||||||||
Total | $ | 26 | $ | 31 | $ | 34 | $ | 11 | $ | 102 | $ | 24 | $ | 27 | $ | 38 | $ | 21 | $ | 110 | ||||||||||
Index and basket CDS | Index and basket CDS | Index and basket CDS | ||||||||||||||||||||||||||||
Investment grade | $ | 3 | $ | 7 | $ | 34 | $ | 10 | $ | 54 | $ | 5 | $ | 10 | $ | 40 | $ | 22 | $ | 77 | ||||||||||
Non-investment grade | 7 | 6 | 13 | 11 | 37 | 5 | 3 | 17 | 17 | 42 | ||||||||||||||||||||
Total | $ | 10 | $ | 13 | $ | 47 | $ | 21 | $ | 91 | $ | 10 | $ | 13 | $ | 57 | $ | 39 | $ | 119 | ||||||||||
Total CDS sold | $ | 36 | $ | 44 | $ | 81 | $ | 32 | $ | 193 | $ | 34 | $ | 40 | $ | 95 | $ | 60 | $ | 229 | ||||||||||
Other credit contracts | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||
Total credit protection sold | $ | 36 | $ | 44 | $ | 81 | $ | 32 | $ | 193 | $ | 34 | $ | 40 | $ | 95 | $ | 60 | $ | 229 | ||||||||||
CDS protection sold with identical protection purchased | CDS protection sold with identical protection purchased | $ | 181 | CDS protection sold with identical protection purchased | $ | 219 |
Years to Maturity at December 31, 2018 | |||||||||||||||
$ in billions | < 1 | 1-3 | 3-5 | Over 5 | Total | ||||||||||
Single-name CDS | |||||||||||||||
Investment grade | $ | 22 | $ | 24 | $ | 19 | $ | 8 | $ | 73 | |||||
Non-investment grade | 10 | 11 | 9 | 1 | 31 | ||||||||||
Total | $ | 32 | $ | 35 | $ | 28 | $ | 9 | $ | 104 | |||||
Index and basket CDS | |||||||||||||||
Investment grade | $ | 5 | $ | 10 | $ | 61 | $ | 7 | $ | 83 | |||||
Non-investment grade | 5 | 6 | 13 | 13 | 37 | ||||||||||
Total | $ | 10 | $ | 16 | $ | 74 | $ | 20 | $ | 120 | |||||
Total CDS sold | $ | 42 | $ | 51 | $ | 102 | $ | 29 | $ | 224 | |||||
Other credit contracts | — | — | — | — | — | ||||||||||
Total credit protection sold | $ | 42 | $ | 51 | $ | 102 | $ | 29 | $ | 224 | |||||
CDS protection sold with identical protection purchased | $ | 210 |
57 |
Notes to Consolidated Financial Statements (Unaudited) |
$ in millions | At June 30, 2019 | At December 31, 2018 | At September 30, 2019 | At December 31, 2018 | ||||||||
Single-name CDS | ||||||||||||
Investment grade | $ | 446 | $ | 118 | $ | 663 | $ | 118 | ||||
Non-investment grade | (487 | ) | (403 | ) | (959 | ) | (403 | ) | ||||
Total | $ | (41 | ) | $ | (285 | ) | $ | (296 | ) | $ | (285 | ) |
Index and basket CDS | ||||||||||||
Investment grade | $ | 906 | $ | 314 | $ | 1,040 | $ | 314 | ||||
Non-investment grade | (381 | ) | (1,413 | ) | 45 | (1,413 | ) | |||||
Total | $ | 525 | $ | (1,099 | ) | $ | 1,085 | $ | (1,099 | ) | ||
Total CDS sold | $ | 484 | $ | (1,384 | ) | $ | 789 | $ | (1,384 | ) | ||
Other credit contracts | (11 | ) | (14 | ) | (18 | ) | (14 | ) | ||||
Total credit protection sold | $ | 473 | $ | (1,398 | ) | $ | 771 | $ | (1,398 | ) |
1. | Investment grade/non-investment grade determination is based on the internal credit rating of the reference obligation. Internal credit ratings serve as the Credit Risk Management Department’s assessment of credit risk and the basis for a comprehensive credit limits framework used to control credit risk. The Firm uses quantitative models and judgment to estimate the various risk parameters related to each obligor. |
Fair Value Asset (Liability) | Fair Value Asset (Liability) | |||||||||||
$ in millions | At June 30, 2019 | At December 31, 2018 | At September 30, 2019 | At December 31, 2018 | ||||||||
Single name | $ | (226 | ) | $ | 277 | $ | 147 | $ | 277 | |||
Index and basket | (396 | ) | 1,333 | (977 | ) | 1,333 | ||||||
Tranched index and basket | (427 | ) | (251 | ) | (345 | ) | (251 | ) | ||||
Total | $ | (1,049 | ) | $ | 1,359 | $ | (1,175 | ) | $ | 1,359 |
Notional | Notional | |||||||||||
$ in billions | At June 30, 2019 | At December 31, 2018 | At September 30, 2019 | At December 31, 2018 | ||||||||
Single name | $ | 111 | $ | 116 | $ | 119 | $ | 116 | ||||
Index and basket | 89 | 117 | 120 | 117 | ||||||||
Tranched index and basket | 17 | 14 | 16 | 14 | ||||||||
Total | $ | 217 | $ | 247 | $ | 255 | $ | 247 |
58 |
Notes to Consolidated Financial Statements (Unaudited) |
At June 30, 2019 | ||||||||||||
$ in millions | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||
AFS securities | ||||||||||||
U.S. government and agency securities: | ||||||||||||
U.S. Treasury securities | $ | 32,931 | $ | 218 | $ | 159 | $ | 32,990 | ||||
U.S. agency securities1 | 22,972 | 188 | 126 | 23,034 | ||||||||
Total U.S. government and agency securities | 55,903 | 406 | 285 | 56,024 | ||||||||
Corporate and other debt: | ||||||||||||
Agency CMBS | 2,888 | 57 | 37 | 2,908 | ||||||||
Non-agency CMBS | 220 | — | 2 | 218 | ||||||||
Auto loan ABS | 4 | — | — | 4 | ||||||||
Corporate bonds | 1,842 | 10 | 5 | 1,847 | ||||||||
State and municipal securities | 333 | 10 | — | 343 | ||||||||
FFELP student loan ABS2 | 1,706 | 5 | 17 | 1,694 | ||||||||
Total corporate and other debt | 6,993 | 82 | 61 | 7,014 | ||||||||
Total AFS securities | 62,896 | 488 | 346 | 63,038 | ||||||||
HTM securities | ||||||||||||
U.S. government and agency securities: | ||||||||||||
U.S. Treasury securities | 25,232 | 509 | 69 | 25,672 | ||||||||
U.S. agency securities1 | 14,212 | 117 | 86 | 14,243 | ||||||||
Total U.S. government and agency securities | 39,444 | 626 | 155 | 39,915 | ||||||||
Corporate and other debt: | ||||||||||||
Non-agency CMBS | 584 | 20 | — | 604 | ||||||||
Total HTM securities | 40,028 | 646 | 155 | 40,519 | ||||||||
Total investment securities | $ | 102,924 | $ | 1,134 | $ | 501 | $ | 103,557 |
At September 30, 2019 | ||||||||||||
$ in millions | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||
AFS securities | ||||||||||||
U.S. government and agency securities: | ||||||||||||
U.S. Treasury securities | $ | 34,422 | $ | 274 | $ | 88 | $ | 34,608 | ||||
U.S. agency securities1 | 21,423 | 248 | 88 | 21,583 | ||||||||
Total U.S. government and agency securities | 55,845 | 522 | 176 | 56,191 | ||||||||
Corporate and other debt: | ||||||||||||
Agency CMBS | 4,512 | 104 | 36 | 4,580 | ||||||||
Corporate bonds | 2,022 | 14 | 4 | 2,032 | ||||||||
State and municipal securities | 252 | 13 | — | 265 | ||||||||
FFELP student loan ABS2 | 1,660 | 3 | 17 | 1,646 | ||||||||
Total corporate and other debt | 8,446 | 134 | 57 | 8,523 | ||||||||
Total AFS securities | 64,291 | 656 | 233 | 64,714 | ||||||||
HTM securities | ||||||||||||
U.S. government and agency securities: | ||||||||||||
U.S. Treasury securities | 27,062 | 764 | 10 | 27,816 | ||||||||
U.S. agency securities1 | 13,381 | 170 | 38 | 13,513 | ||||||||
Total U.S. government and agency securities | 40,443 | 934 | 48 | 41,329 | ||||||||
Corporate and other debt: | ||||||||||||
Non-agency CMBS | 633 | 29 | — | 662 | ||||||||
Total HTM securities | 41,076 | 963 | 48 | 41,991 | ||||||||
Total investment securities | $ | 105,367 | $ | 1,619 | $ | 281 | $ | 106,705 |
At December 31, 2018 | ||||||||||||
$ in millions | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||
AFS securities | ||||||||||||
U.S. government and agency securities: | ||||||||||||
U.S. Treasury securities | $ | 36,268 | $ | 40 | $ | 656 | $ | 35,652 | ||||
U.S. agency securities1 | 20,740 | 10 | 497 | 20,253 | ||||||||
Total U.S. government and agency securities | 57,008 | 50 | 1,153 | 55,905 | ||||||||
Corporate and other debt: | ||||||||||||
Agency CMBS | 1,054 | — | 62 | 992 | ||||||||
Non-agency CMBS | 461 | — | 14 | 447 | ||||||||
Corporate bonds | 1,585 | — | 32 | 1,553 | ||||||||
State and municipal securities | 200 | 2 | — | 202 | ||||||||
FFELP student loan ABS2 | 1,967 | 10 | 15 | 1,962 | ||||||||
Total corporate and other debt | 5,267 | 12 | 123 | 5,156 | ||||||||
Total AFS securities | 62,275 | 62 | 1,276 | 61,061 | ||||||||
HTM securities | ||||||||||||
U.S. government and agency securities: | ||||||||||||
U.S. Treasury securities | 17,832 | 44 | 403 | 17,473 | ||||||||
U.S. agency securities1 | 12,456 | 8 | 446 | 12,018 | ||||||||
Total U.S. government and agency securities | 30,288 | 52 | 849 | 29,491 | ||||||||
Corporate and other debt: | ||||||||||||
Non-agency CMBS | 483 | — | 9 | 474 | ||||||||
Total HTM securities | 30,771 | 52 | 858 | 29,965 | ||||||||
Total investment securities | $ | 93,046 | $ | 114 | $ | 2,134 | $ | 91,026 |
1. | U.S. agency securities consist mainly of agency-issued debt, agency mortgage pass-through pool securities and CMOs. |
2. | Underlying loans are backed by a guarantee, ultimately from the U.S. Department of Education, of at least 95% of the principal balance and interest outstanding. |
59 |
Notes to Consolidated Financial Statements (Unaudited) |
At June 30, 2019 | At September 30, 2019 | |||||||||||||||||||||||||||||||||||
Less than 12 Months | 12 Months or Longer | Total | Less than 12 Months | 12 Months or Longer | Total | |||||||||||||||||||||||||||||||
$ in millions | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | ||||||||||||||||||||||||
AFS securities | ||||||||||||||||||||||||||||||||||||
U.S. government and agency securities: | ||||||||||||||||||||||||||||||||||||
U.S. Treasury securities | $ | — | $ | — | $ | 14,432 | $ | 159 | $ | 14,432 | $ | 159 | $ | 4,233 | $ | 13 | $ | 9,318 | $ | 75 | $ | 13,551 | $ | 88 | ||||||||||||
U.S. agency securities | 1,621 | 11 | 10,951 | 115 | 12,572 | 126 | 3,064 | 15 | 7,283 | 73 | 10,347 | 88 | ||||||||||||||||||||||||
Total U.S. government and agency securities | 1,621 | 11 | 25,383 | 274 | 27,004 | 285 | 7,297 | 28 | 16,601 | 148 | 23,898 | 176 | ||||||||||||||||||||||||
Corporate and other debt: | ||||||||||||||||||||||||||||||||||||
Agency CMBS | 320 | 1 | 750 | 36 | 1,070 | 37 | 837 | 6 | 719 | 30 | 1,556 | 36 | ||||||||||||||||||||||||
Non-agency CMBS | — | — | 218 | 2 | 218 | 2 | ||||||||||||||||||||||||||||||
Corporate bonds | 349 | 2 | 403 | 3 | 752 | 5 | 477 | 3 | 262 | 1 | 739 | 4 | ||||||||||||||||||||||||
FFELP student loan ABS | 520 | 5 | 762 | 12 | 1,282 | 17 | 490 | 4 | 751 | 13 | 1,241 | 17 | ||||||||||||||||||||||||
Total corporate and other debt | 1,189 | 8 | 2,133 | 53 | 3,322 | 61 | 1,804 | 13 | 1,732 | 44 | 3,536 | 57 | ||||||||||||||||||||||||
Total AFS securities | 2,810 | 19 | 27,516 | 327 | 30,326 | 346 | 9,101 | 41 | 18,333 | 192 | 27,434 | 233 | ||||||||||||||||||||||||
HTM securities | ||||||||||||||||||||||||||||||||||||
U.S. government and agency securities: | ||||||||||||||||||||||||||||||||||||
U.S. Treasury securities | — | — | 4,804 | 69 | 4,804 | 69 | 2,811 | 8 | 950 | 2 | 3,761 | 10 | ||||||||||||||||||||||||
U.S. agency securities | 94 | — | 6,937 | 86 | 7,031 | 86 | 2,496 | 7 | 2,572 | 31 | 5,068 | 38 | ||||||||||||||||||||||||
Total U.S. government and agency securities | 5,307 | 15 | 3,522 | 33 | 8,829 | 48 | ||||||||||||||||||||||||||||||
Total HTM securities | 94 | — | 11,741 | 155 | 11,835 | 155 | 5,307 | 15 | 3,522 | 33 | 8,829 | 48 | ||||||||||||||||||||||||
Total investment securities | $ | 2,904 | $ | 19 | $ | 39,257 | $ | 482 | $ | 42,161 | $ | 501 | $ | 14,408 | $ | 56 | $ | 21,855 | $ | 225 | $ | 36,263 | $ | 281 |
At December 31, 2018 | ||||||||||||||||||
Less than 12 Months | 12 Months or Longer | Total | ||||||||||||||||
$ in millions | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | ||||||||||||
AFS securities | ||||||||||||||||||
U.S. government and agency securities: | ||||||||||||||||||
U.S. Treasury securities | $ | 19,937 | $ | 541 | $ | 5,994 | $ | 115 | $ | 25,931 | $ | 656 | ||||||
U.S. agency securities | 12,904 | 383 | 4,142 | 114 | 17,046 | 497 | ||||||||||||
Total U.S. government and agency securities | 32,841 | 924 | 10,136 | 229 | 42,977 | 1,153 | ||||||||||||
Corporate and other debt: | ||||||||||||||||||
Agency CMBS | 808 | 62 | — | — | 808 | 62 | ||||||||||||
Non-agency CMBS | — | — | 446 | 14 | 446 | 14 | ||||||||||||
Corporate bonds | 470 | 7 | 1,010 | 25 | 1,480 | 32 | ||||||||||||
FFELP student loan ABS | 1,366 | 15 | — | — | 1,366 | 15 | ||||||||||||
Total corporate and other debt | 2,644 | 84 | 1,456 | 39 | 4,100 | 123 | ||||||||||||
Total AFS securities | 35,485 | 1,008 | 11,592 | 268 | 47,077 | 1,276 | ||||||||||||
HTM securities | ||||||||||||||||||
U.S. government and agency securities: | ||||||||||||||||||
U.S. Treasury securities | — | — | 11,161 | 403 | 11,161 | 403 | ||||||||||||
U.S. agency securities | 410 | 1 | 10,004 | 445 | 10,414 | 446 | ||||||||||||
Total U.S. government and agency securities | 410 | 1 | 21,165 | 848 | 21,575 | 849 | ||||||||||||
Corporate and other debt: | ||||||||||||||||||
Non-agency CMBS | 206 | 1 | 216 | 8 | 422 | 9 | ||||||||||||
Total HTM securities | 616 | 2 | 21,381 | 856 | 21,997 | 858 | ||||||||||||
Total investment securities | $ | 36,101 | $ | 1,010 | $ | 32,973 | $ | 1,124 | $ | 69,074 | $ | 2,134 |
60 |
Notes to Consolidated Financial Statements (Unaudited) |
At June 30, 2019 | ||||||||
$ in millions | Amortized Cost | Fair Value | Annualized Average Yield | |||||
AFS securities | ||||||||
U.S. government and agency securities: | ||||||||
U.S. Treasury securities: | ||||||||
Due within 1 year | $ | 6,652 | $ | 6,656 | 2.0 | % | ||
After 1 year through 5 years | 22,678 | 22,741 | 1.9 | % | ||||
After 5 years through 10 years | 3,601 | 3,593 | 1.8 | % | ||||
Total | 32,931 | 32,990 | ||||||
U.S. agency securities: | ||||||||
Due within 1 year | 444 | 443 | 1.1 | % | ||||
After 1 year through 5 years | 671 | 668 | 1.1 | % | ||||
After 5 years through 10 years | 1,495 | 1,483 | 1.8 | % | ||||
After 10 years | 20,362 | 20,440 | 2.4 | % | ||||
Total | 22,972 | 23,034 | ||||||
Total U.S. government and agency securities | 55,903 | 56,024 | 2.0 | % | ||||
Corporate and other debt: | ||||||||
Agency CMBS: | ||||||||
After 1 year through 5 years | 144 | 143 | 1.6 | % | ||||
After 5 years through 10 years | 1,813 | 1,862 | 2.8 | % | ||||
After 10 years | 931 | 903 | 1.9 | % | ||||
Total | 2,888 | 2,908 | ||||||
Non-agency CMBS: | ||||||||
After 1 year through 5 years | 35 | 35 | 2.5 | % | ||||
After 10 years | 185 | 183 | 2.0 | % | ||||
Total | 220 | 218 | ||||||
Auto loan ABS: | ||||||||
After 1 year through 5 years | 4 | 4 | 2.5 | % | ||||
Total | 4 | 4 | ||||||
Corporate bonds: | ||||||||
Due within 1 year | 51 | 51 | 1.4 | % | ||||
After 1 year through 5 years | 1,473 | 1,478 | 2.6 | % | ||||
After 5 years through 10 years | 318 | 318 | 3.3 | % | ||||
Total | 1,842 | 1,847 |
At September 30, 2019 | ||||||||
$ in millions | Amortized Cost | Fair Value | Annualized Average Yield | |||||
AFS securities | ||||||||
U.S. government and agency securities: | ||||||||
U.S. Treasury securities: | ||||||||
Due within 1 year | $ | 6,278 | $ | 6,294 | 2.1 | % | ||
After 1 year through 5 years | 23,285 | 23,415 | 1.8 | % | ||||
After 5 years through 10 years | 4,859 | 4,899 | 1.7 | % | ||||
Total | 34,422 | 34,608 | ||||||
U.S. agency securities: | ||||||||
Due within 1 year | 61 | 61 | 2.1 | % | ||||
After 1 year through 5 years | 644 | 641 | 1.1 | % | ||||
After 5 years through 10 years | 1,416 | 1,409 | 1.8 | % | ||||
After 10 years | 19,302 | 19,472 | 2.4 | % | ||||
Total | 21,423 | 21,583 | ||||||
Total U.S. government and agency securities | 55,845 | 56,191 | 2.0 | % | ||||
Corporate and other debt: | ||||||||
Agency CMBS: | ||||||||
After 1 year through 5 years | 615 | 613 | 1.8 | % | ||||
After 5 years through 10 years | 2,942 | 3,029 | 2.5 | % | ||||
After 10 years | 955 | 938 | 2.0 | % | ||||
Total | 4,512 | 4,580 | ||||||
Corporate bonds: | ||||||||
Due within 1 year | 109 | 110 | 2.3 | % | ||||
After 1 year through 5 years | 1,498 | 1,509 | 2.6 | % | ||||
After 5 years through 10 years | 415 | 413 | 3.0 | % | ||||
Total | 2,022 | 2,032 |
At June 30, 2019 | At September 30, 2019 | |||||||||||||||
$ in millions | Amortized Cost | Fair Value | Annualized Average Yield | Amortized Cost | Fair Value | Annualized Average Yield | ||||||||||
State and municipal securities: | ||||||||||||||||
After 1 year through 5 years | $ | 2 | $ | 2 | 3.4 | % | $ | 10 | $ | 10 | 2.2 | % | ||||
After 5 years through 10 years | 211 | 212 | 3.5 | % | 25 | 26 | 2.8 | % | ||||||||
After 10 Years | 120 | 129 | 5.4 | % | 217 | 229 | 4.4 | % | ||||||||
Total | 333 | 343 | 252 | 265 | ||||||||||||
FFELP student loan ABS: | ||||||||||||||||
After 1 year through 5 years | 75 | 74 | 0.8 | % | 74 | 72 | 0.8 | % | ||||||||
After 5 years through 10 years | 403 | 396 | 0.8 | % | 389 | 382 | 0.8 | % | ||||||||
After 10 years | 1,228 | 1,224 | 1.2 | % | 1,197 | 1,192 | 1.2 | % | ||||||||
Total | 1,706 | 1,694 | 1,660 | 1,646 | ||||||||||||
Total corporate and other debt | 6,993 | 7,014 | 2.4 | % | 8,446 | 8,523 | 2.2 | % | ||||||||
Total AFS securities | 62,896 | 63,038 | 2.1 | % | 64,291 | 64,714 | 2.1 | % | ||||||||
HTM securities | U.S. government and agency securities: | |||||||||||||||
U.S. Treasury securities: | ||||||||||||||||
Due within 1 year | 849 | 847 | 1.6 | % | 1,742 | 1,750 | 2.2 | % | ||||||||
After 1 year through 5 years | 13,834 | 14,037 | 2.3 | % | 15,514 | 15,778 | 2.2 | % | ||||||||
After 5 years through 10 years | 9,466 | 9,707 | 2.2 | % | 8,722 | 9,117 | 2.2 | % | ||||||||
After 10 years | 1,083 | 1,081 | 2.5 | % | 1,084 | 1,171 | 2.5 | % | ||||||||
Total | 25,232 | 25,672 | 27,062 | 27,816 | ||||||||||||
U.S. agency securities: | ||||||||||||||||
After 5 years through 10 years | 27 | 27 | 1.9 | % | 25 | 25 | 1.9 | % | ||||||||
After 10 years | 14,185 | 14,216 | 2.6 | % | 13,356 | 13,488 | 2.6 | % | ||||||||
Total | 14,212 | 14,243 | 13,381 | 13,513 | ||||||||||||
Total U.S. government and agency securities | 39,444 | 39,915 | 2.4 | % | 40,443 | 41,329 | 2.3 | % | ||||||||
Corporate and other debt: | ||||||||||||||||
Non-agency CMBS: | ||||||||||||||||
Due within 1 year | 99 | 99 | 4.8 | % | 93 | 93 | 4.8 | % | ||||||||
After 1 year through 5 years | 71 | 71 | 4.2 | % | 85 | 85 | 4.0 | % | ||||||||
After 5 years through 10 years | 376 | 393 | 4.1 | % | 374 | 399 | 4.1 | % | ||||||||
After 10 years | 38 | 41 | 4.4 | % | 81 | 85 | 3.7 | % | ||||||||
Total corporate and other debt | 584 | 604 | 4.3 | % | 633 | 662 | 4.1 | % | ||||||||
Total HTM securities | 40,028 | 40,519 | 2.5 | % | 41,076 | 41,991 | 2.4 | % | ||||||||
Total investment securities | $ | 102,924 | $ | 103,557 | 2.2 | % | $ | 105,367 | $ | 106,705 | 2.2 | % |
Three Months Ended June 30, | Six Months Ended June 30, | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||
$ in millions | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||
Gross realized gains | $ | 53 | $ | 6 | $ | 72 | $ | 7 | $ | 27 | $ | 5 | $ | 99 | $ | 11 | ||||||||
Gross realized (losses) | — | (3 | ) | (9 | ) | (4 | ) | (1 | ) | — | (10 | ) | (3 | ) | ||||||||||
Total1 | $ | 53 | $ | 3 | $ | 63 | $ | 3 | $ | 26 | $ | 5 | $ | 89 | $ | 8 |
1. | Realized gains and losses are recognized in Other revenues in the income statements. |
61 |
Notes to Consolidated Financial Statements (Unaudited) |
At June 30, 2019 | At September 30, 2019 | |||||||||||||||||||||||||||||
$ in millions | Gross Amounts | Amounts Offset | Net Amounts Presented | Amounts Not Offset1 | Net Amounts | Gross Amounts | Amounts Offset | Net Amounts Presented | Amounts Not Offset1 | Net Amounts | ||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||
Securities purchased under agreements to resell | $ | 250,004 | $ | (164,606 | ) | $ | 85,398 | $ | (83,492 | ) | $ | 1,906 | $ | 263,485 | $ | (170,118 | ) | $ | 93,367 | $ | (91,505 | ) | $ | 1,862 | ||||||
Securities borrowed | 143,046 | (9,466 | ) | 133,580 | (129,614 | ) | 3,966 | 142,723 | (10,322 | ) | 132,401 | (126,161 | ) | 6,240 | ||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||||
Securities sold under agreements to repurchase | $ | 226,900 | $ | (164,606 | ) | $ | 62,294 | $ | (53,942 | ) | $ | 8,352 | $ | 229,626 | $ | (170,164 | ) | $ | 59,462 | $ | (42,091 | ) | $ | 17,371 | ||||||
Securities loaned | 19,791 | (9,466 | ) | 10,325 | (10,298 | ) | 27 | 19,967 | (10,276 | ) | 9,691 | (9,660 | ) | 31 | Net amounts for which master netting agreements are not in place or may not be legally enforceable | |||||||||||||||
Securities purchased under agreements to resell | Securities purchased under agreements to resell | $ | 1,425 | Securities purchased under agreements to resell | $ | 1,390 | ||||||||||||||||||||||||
Securities borrowed | Securities borrowed | 828 | Securities borrowed | 1,578 | ||||||||||||||||||||||||||
Securities sold under agreements to repurchase | Securities sold under agreements to repurchase | 6,603 | Securities sold under agreements to repurchase | 15,695 | ||||||||||||||||||||||||||
Securities loaned | 17 | 20 |
At December 31, 2018 | |||||||||||||||
$ in millions | Gross Amounts | Amounts Offset | Net Amounts Presented | Amounts Not Offset1 | Net Amounts | ||||||||||
Assets | |||||||||||||||
Securities purchased under agreements to resell | $ | 262,976 | $ | (164,454 | ) | $ | 98,522 | $ | (95,610 | ) | $ | 2,912 | |||
Securities borrowed | 134,711 | (18,398 | ) | 116,313 | (112,551 | ) | 3,762 | ||||||||
Liabilities | |||||||||||||||
Securities sold under agreements to repurchase | $ | 214,213 | $ | (164,454 | ) | $ | 49,759 | $ | (41,095 | ) | $ | 8,664 | |||
Securities loaned | 30,306 | (18,398 | ) | 11,908 | (11,677 | ) | 231 | ||||||||
Net amounts for which master netting agreements are not in place or may not be legally enforceable | |||||||||||||||
Securities purchased under agreements to resell | $ | 2,579 | |||||||||||||
Securities borrowed | 724 | ||||||||||||||
Securities sold under agreements to repurchase | 6,762 | ||||||||||||||
Securities loaned | 191 |
1. | Amounts relate to master netting agreements that have been determined by the Firm to be legally enforceable in the event of default but where certain other criteria are not met in accordance with applicable offsetting accounting guidance. |
At June 30, 2019 | At September 30, 2019 | |||||||||||||||||||||||||||||
$ in millions | Overnight and Open | Less than 30 Days | 30-90 Days | Over 90 Days | Total | Overnight and Open | Less than 30 Days | 30-90 Days | Over 90 Days | Total | ||||||||||||||||||||
Securities sold under agreements to repurchase | $ | 86,201 | $ | 68,956 | $ | 29,202 | $ | 42,541 | $ | 226,900 | $ | 78,896 | $ | 74,832 | $ | 31,794 | $ | 44,104 | $ | 229,626 | ||||||||||
Securities loaned | 12,314 | 1,595 | 1,196 | 4,686 | 19,791 | 9,780 | 4,540 | 611 | 5,036 | 19,967 | ||||||||||||||||||||
Total included in the offsetting disclosure | $ | 98,515 | $ | 70,551 | $ | 30,398 | $ | 47,227 | $ | 246,691 | $ | 88,676 | $ | 79,372 | $ | 32,405 | $ | 49,140 | $ | 249,593 | ||||||||||
Trading liabilities— Obligation to return securities received as collateral | 20,001 | — | — | — | 20,001 | 21,440 | — | — | — | 21,440 | ||||||||||||||||||||
Total | $ | 118,516 | $ | 70,551 | $ | 30,398 | $ | 47,227 | $ | 266,692 | $ | 110,116 | $ | 79,372 | $ | 32,405 | $ | 49,140 | $ | 271,033 |
At December 31, 2018 | |||||||||||||||
$ in millions | Overnight and Open | Less than 30 Days | 30-90 Days | Over 90 Days | Total | ||||||||||
Securities sold under agreements to repurchase | $ | 56,503 | $ | 93,427 | $ | 35,692 | $ | 28,591 | $ | 214,213 | |||||
Securities loaned | 18,397 | 3,609 | 1,985 | 6,315 | 30,306 | ||||||||||
Total included in the offsetting disclosure | $ | 74,900 | $ | 97,036 | $ | 37,677 | $ | 34,906 | $ | 244,519 | |||||
Trading liabilities— Obligation to return securities received as collateral | 17,594 | — | — | — | 17,594 | ||||||||||
Total | $ | 92,494 | $ | 97,036 | $ | 37,677 | $ | 34,906 | $ | 262,113 |
$ in millions | At June 30, 2019 | At December 31, 2018 | At September 30, 2019 | At December 31, 2018 | Securities sold under agreements to repurchase | |||||||
U.S. Treasury and agency securities | $ | 78,757 | $ | 68,487 | $ | 81,642 | $ | 68,487 | ||||
State and municipal securities | 1,417 | 925 | 1,164 | 925 | ||||||||
Other sovereign government obligations | 120,426 | 120,432 | 117,949 | 120,432 | ||||||||
ABS | 1,634 | 3,017 | 2,338 | 3,017 | ||||||||
Corporate and other debt | 7,265 | 8,719 | 7,718 | 8,719 | ||||||||
Corporate equities | 16,562 | 12,079 | 18,279 | 12,079 | ||||||||
Other | 839 | 554 | 536 | 554 | ||||||||
Total | $ | 226,900 | $ | 214,213 | $ | 229,626 | $ | 214,213 | ||||
Securities loaned | ||||||||||||
Other sovereign government obligations | $ | 9,904 | $ | 19,021 | $ | 10,667 | $ | 19,021 | ||||
Corporate equities | 9,800 | 10,800 | 9,242 | 10,800 | ||||||||
Other | 87 | 485 | 58 | 485 | ||||||||
Total | $ | 19,791 | $ | 30,306 | $ | 19,967 | $ | 30,306 | ||||
Total included in the offsetting disclosure | $ | 246,691 | $ | 244,519 | $ | 249,593 | $ | 244,519 | Trading liabilities—Obligation to return securities received as collateral | |||
Corporate equities | $ | 20,001 | $ | 17,594 | $ | 21,432 | $ | 17,594 | ||||
Other | 8 | — | ||||||||||
Total | $ | 266,692 | $ | 262,113 | $ | 21,440 | $ | 17,594 | ||||
Total | $ | 271,033 | $ | 262,113 |
62 |
Notes to Consolidated Financial Statements (Unaudited) |
$ in millions | At June 30, 2019 | At December 31, 2018 | At September 30, 2019 | At December 31, 2018 | ||||||||
Trading assets | $ | 39,625 | $ | 39,430 | $ | 38,325 | $ | 39,430 | ||||
Loans (gross of allowance for loan losses) | 300 | — | ||||||||||
Total | $ | 38,625 | $ | 39,430 |
$ in millions | At June 30, 2019 | At December 31, 2018 | ||||
Collateral received with right to sell or repledge | $ | 699,097 | $ | 639,610 | ||
Collateral that was sold or repledged1 | 559,790 | 487,983 |
$ in millions | At September 30, 2019 | At December 31, 2018 | ||||
Collateral received with right to sell or repledge | $ | 724,356 | $ | 639,610 | ||
Collateral that was sold or repledged1 | 577,354 | 487,983 |
1. | Does not include securities used to meet federal regulations for the Firm’s U.S. broker-dealers. |
$ in millions | At June 30, 2019 | At December 31, 2018 | ||||
Restricted cash | $ | 30,435 | $ | 35,356 | ||
Segregated securities1 | 22,140 | 26,877 | ||||
Total | $ | 52,575 | $ | 62,233 |
$ in millions | At September 30, 2019 | At December 31, 2018 | ||||
Restricted cash | $ | 30,739 | $ | 35,356 | ||
Segregated securities1 | 24,838 | 26,877 | ||||
Total | $ | 55,577 | $ | 62,233 |
1. | Securities segregated under federal regulations for the Firm’s U.S. broker-dealers are sourced from Securities purchased under agreements to resell and Trading assets in the balance sheets. |
$ in millions | At June 30, 2019 | At December 31, 2018 | At September 30, 2019 | At December 31, 2018 | ||||||||
Customer receivables representing margin loans | $ | 26,888 | $ | 26,225 | $ | 28,068 | $ | 26,225 |
At June 30, 2019 | At September 30, 2019 | |||||||||||||||||
$ in millions | Loans Held for Investment | Loans Held for Sale | Total Loans | Loans Held for Investment | Loans Held for Sale | Total Loans | ||||||||||||
Corporate | $ | 40,283 | $ | 14,132 | $ | 54,415 | $ | 45,117 | $ | 13,525 | $ | 58,642 | ||||||
Consumer | 29,196 | — | 29,196 | 30,010 | — | 30,010 | ||||||||||||
Residential real estate | 28,595 | 21 | 28,616 | 29,184 | 17 | 29,201 | ||||||||||||
Commercial real estate | 7,336 | 1,603 | 8,939 | 6,801 | 1,165 | 7,966 | ||||||||||||
Total loans, gross | 105,410 | 15,756 | 121,166 | 111,112 | 14,707 | 125,819 | ||||||||||||
Allowance for loan losses | (265 | ) | — | (265 | ) | (297 | ) | — | (297 | ) | ||||||||
Total loans, net | $ | 105,145 | $ | 15,756 | $ | 120,901 | $ | 110,815 | $ | 14,707 | $ | 125,522 | ||||||
Fixed rate loans, net | $ | 18,201 | $ | 20,233 | ||||||||||||||
Floating or adjustable rate loans, net | Floating or adjustable rate loans, net | 102,700 | Floating or adjustable rate loans, net | 105,289 | ||||||||||||||
Loans to non-U.S. borrowers, net | Loans to non-U.S. borrowers, net | 20,028 | Loans to non-U.S. borrowers, net | 20,722 |
At December 31, 2018 | |||||||||
$ in millions | Loans Held for Investment | Loans Held for Sale | Total Loans | ||||||
Corporate | $ | 36,909 | $ | 13,886 | $ | 50,795 | |||
Consumer | 27,868 | — | 27,868 | ||||||
Residential real estate | 27,466 | 22 | 27,488 | ||||||
Commercial real estate1 | 7,810 | 1,856 | 9,666 | ||||||
Total loans, gross | 100,053 | 15,764 | 115,817 | ||||||
Allowance for loan losses | (238 | ) | — | (238 | ) | ||||
Total loans, net | $ | 99,815 | $ | 15,764 | $ | 115,579 | |||
Fixed rate loans, net | $ | 15,632 | |||||||
Floating or adjustable rate loans, net | 99,947 | ||||||||
Loans to non-U.S. borrowers, net | 17,568 |
1. | Beginning in 2019, loans previously referred to as Wholesale real estate are referred to as Commercial real estate. |
63 |
Notes to Consolidated Financial Statements (Unaudited) |
At June 30, 2019 | At September 30, 2019 | |||||||||||||||||||||||||||||
$ in millions | Corporate | Consumer | Residential Real Estate | Commercial Real Estate | Total | Corporate | Consumer | Residential Real Estate | Commercial Real Estate | Total | ||||||||||||||||||||
Pass | $ | 39,775 | $ | 29,191 | $ | 28,490 | $ | 6,932 | $ | 104,388 | $ | 44,152 | $ | 30,005 | $ | 29,051 | $ | 6,618 | $ | 109,826 | ||||||||||
Special mention | 94 | — | 10 | 284 | 388 | 373 | — | 27 | 80 | 480 | ||||||||||||||||||||
Substandard | 414 | 5 | 95 | 120 | 634 | 592 | 5 | 106 | 103 | 806 | ||||||||||||||||||||
Doubtful | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||
Loss | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||
Total | $ | 40,283 | $ | 29,196 | $ | 28,595 | $ | 7,336 | $ | 105,410 | $ | 45,117 | $ | 30,010 | $ | 29,184 | $ | 6,801 | $ | 111,112 |
At December 31, 2018 | |||||||||||||||
$ in millions | Corporate | Consumer | Residential Real Estate | Commercial Real Estate | Total | ||||||||||
Pass | $ | 36,217 | $ | 27,863 | $ | 27,387 | $ | 7,378 | $ | 98,845 | |||||
Special mention | 492 | 5 | — | 312 | 809 | ||||||||||
Substandard | 200 | — | 79 | 120 | 399 | ||||||||||
Doubtful | — | — | — | — | — | ||||||||||
Loss | — | — | — | — | — | ||||||||||
Total | $ | 36,909 | $ | 27,868 | $ | 27,466 | $ | 7,810 | $ | 100,053 |
At June 30, 2019 | At September 30, 2019 | |||||||||||||||||||||||
$ in millions | Corporate | Consumer | Residential Real Estate | Total | Corporate | Consumer | Residential Real Estate | Total | ||||||||||||||||
Loans | ||||||||||||||||||||||||
With allowance | $ | 229 | $ | — | $ | — | $ | 229 | $ | 232 | $ | — | $ | — | $ | 232 | ||||||||
Without allowance1 | 26 | 5 | 77 | 108 | 28 | 5 | 92 | 125 | ||||||||||||||||
Total impaired loans | $ | 255 | $ | 5 | $ | 77 | $ | 337 | $ | 260 | $ | 5 | $ | 92 | $ | 357 | ||||||||
UPB | 262 | 5 | 84 | 351 | 267 | 5 | 94 | 366 | ||||||||||||||||
Lending commitments | ||||||||||||||||||||||||
With allowance | $ | 7 | $ | — | $ | — | $ | 7 | $ | 5 | $ | — | $ | — | $ | 5 | ||||||||
Without allowance1 | 40 | — | — | 40 | 37 | — | — | 37 | ||||||||||||||||
Total impaired lending commitments | $ | 47 | $ | — | $ | — | $ | 47 | $ | 42 | $ | — | $ | — | $ | 42 |
At December 31, 2018 | ||||||||||||
$ in millions | Corporate | Consumer | Residential Real Estate | Total | ||||||||
Loans | ||||||||||||
With allowance | $ | 24 | $ | — | $ | — | $ | 24 | ||||
Without allowance1 | 32 | — | 69 | 101 | ||||||||
Total impaired loans | $ | 56 | $ | — | $ | 69 | $ | 125 | ||||
UPB | 63 | — | 70 | 133 | ||||||||
Lending commitments | ||||||||||||
With allowance | $ | 19 | $ | — | $ | — | $ | 19 | ||||
Without allowance1 | 34 | — | — | 34 | ||||||||
Total impaired lending commitments | $ | 53 | $ | — | $ | — | $ | 53 |
1. | No allowance was recorded for these loans and lending commitments as the present value of the expected future cash flows or value of the collateral equaled or exceeded the carrying value. |
At June 30, 2019 | At September 30, 2019 | |||||||||||||||||||||||
$ in millions | Americas | EMEA | Asia | Total | Americas | EMEA | Asia | Total | ||||||||||||||||
Impaired loans | $ | 337 | $ | — | $ | — | $ | 337 | $ | 357 | $ | — | $ | — | $ | 357 | ||||||||
Total Allowance for loan losses | 210 | 52 | 3 | 265 | 227 | 64 | 6 | 297 |
At December 31, 2018 | ||||||||||||
$ in millions | Americas | EMEA | Asia | Total | ||||||||
Impaired loans | $ | 125 | $ | — | $ | — | $ | 125 | ||||
Total Allowance for loan losses | 193 | 42 | 3 | 238 |
$ in millions | At June 30, 2019 | At December 31, 2018 | At September 30, 2019 | At December 31, 2018 | ||||||||
Loans | $ | 43 | $ | 38 | $ | 46 | $ | 38 | ||||
Lending commitments | 62 | 45 | 49 | 45 | ||||||||
Allowance for loan losses and lending commitments | 4 | 4 | 5 | 4 |
$ in millions | Corporate | Consumer | Residential Real Estate | Commercial Real Estate | Total | Corporate | Consumer | Residential Real Estate | Commercial Real Estate | Total | ||||||||||||||||||||
December 31, 2018 | $ | 144 | $ | 7 | $ | 20 | $ | 67 | $ | 238 | $ | 144 | $ | 7 | $ | 20 | $ | 67 | $ | 238 | ||||||||||
Gross charge-offs | — | — | (1 | ) | — | (1 | ) | — | — | (1 | ) | — | (1 | ) | ||||||||||||||||
Provision (release)1 | 33 | — | 4 | (3 | ) | 34 | 69 | — | 5 | (6 | ) | 68 | ||||||||||||||||||
Other | (6 | ) | — | — | — | (6 | ) | (7 | ) | — | — | (1 | ) | (8 | ) | |||||||||||||||
June 30, 2019 | $ | 171 | $ | 7 | $ | 23 | $ | 64 | $ | 265 | ||||||||||||||||||||
September 30, 2019 | $ | 206 | $ | 7 | $ | 24 | $ | 60 | $ | 297 | ||||||||||||||||||||
Inherent | $ | 154 | $ | 7 | $ | 23 | $ | 64 | $ | 248 | $ | 188 | $ | 7 | $ | 24 | $ | 60 | $ | 279 | ||||||||||
Specific | 17 | — | — | — | 17 | 18 | — | — | — | 18 |
64 |
Notes to Consolidated Financial Statements (Unaudited) |
$ in millions | Corporate | Consumer | Residential Real Estate | Commercial Real Estate | Total | Corporate | Consumer | Residential Real Estate | Commercial Real Estate | Total | ||||||||||||||||||||
December 31, 2017 | $ | 126 | $ | 4 | $ | 24 | $ | 70 | $ | 224 | $ | 126 | $ | 4 | $ | 24 | $ | 70 | $ | 224 | ||||||||||
Gross charge-offs | (1 | ) | — | — | — | (1 | ) | (4 | ) | — | — | — | (4 | ) | ||||||||||||||||
Recoveries2 | 54 | — | — | — | 54 | 54 | — | — | — | 54 | ||||||||||||||||||||
Net recoveries (charge-offs) | 53 | — | — | — | 53 | 50 | — | — | — | 50 | ||||||||||||||||||||
Provision (release)1,2 | (51 | ) | 1 | (5 | ) | 21 | (34 | ) | (39 | ) | 1 | (4 | ) | 9 | (33 | ) | ||||||||||||||
Other | (1 | ) | — | (1 | ) | — | (2 | ) | (2 | ) | — | — | (8 | ) | (10 | ) | ||||||||||||||
June 30, 2018 | $ | 127 | $ | 5 | $ | 18 | $ | 91 | $ | 241 | ||||||||||||||||||||
September 30, 2018 | $ | 135 | $ | 5 | $ | 20 | $ | 71 | $ | 231 | ||||||||||||||||||||
Inherent | $ | 123 | $ | 5 | $ | 18 | $ | 91 | $ | 237 | $ | 130 | $ | 5 | $ | 20 | $ | 71 | $ | 226 | ||||||||||
Specific | 4 | — | — | — | 4 | 5 | — | — | — | 5 |
1. | The Firm recorded a provision for loan losses of |
2. | The prior year period release was primarily due to the recovery of a previously charged off energy industry related loan. |
$ in millions | Corporate | Consumer | Residential Real Estate | Commercial Real Estate | Total | Corporate | Consumer | Residential Real Estate | Commercial Real Estate | Total | ||||||||||||||||||||
December 31, 2018 | $ | 198 | $ | 2 | $ | — | $ | 3 | $ | 203 | $ | 198 | $ | 2 | $ | — | $ | 3 | $ | 203 | ||||||||||
Provision (release) | 18 | — | — | 2 | 20 | |||||||||||||||||||||||||
Provision (release)1 | 34 | — | — | 2 | 36 | |||||||||||||||||||||||||
Other | (1 | ) | (1 | ) | — | — | (2 | ) | (4 | ) | (1 | ) | — | — | (5 | ) | ||||||||||||||
June 30, 2019 | $ | 215 | $ | 1 | $ | — | $ | 5 | $ | 221 | ||||||||||||||||||||
September 30, 2019 | $ | 228 | $ | 1 | $ | — | $ | 5 | $ | 234 | ||||||||||||||||||||
Inherent | $ | 213 | $ | 1 | $ | — | $ | 5 | $ | 219 | $ | 224 | $ | 1 | $ | — | $ | 5 | $ | 230 | ||||||||||
Specific | 2 | — | — | — | 2 | 4 | — | — | — | 4 |
$ in millions | Corporate | Consumer | Residential Real Estate | Commercial Real Estate | Total | Corporate | Consumer | Residential Real Estate | Commercial Real Estate | Total | ||||||||||||||||||||
December 31, 2017 | $ | 194 | $ | 1 | $ | — | $ | 3 | $ | 198 | $ | 194 | $ | 1 | $ | — | $ | 3 | $ | 198 | ||||||||||
Provision (release) | 5 | — | — | — | 5 | |||||||||||||||||||||||||
Provision (release)1 | 5 | — | — | 1 | 6 | |||||||||||||||||||||||||
Other | — | — | — | (1 | ) | (1 | ) | (2 | ) | — | — | (1 | ) | (3 | ) | |||||||||||||||
June 30, 2018 | $ | 199 | $ | 1 | $ | — | $ | 2 | $ | 202 | ||||||||||||||||||||
September 30, 2018 | $ | 197 | $ | 1 | $ | — | $ | 3 | $ | 201 | ||||||||||||||||||||
Inherent | $ | 195 | $ | 1 | $ | — | $ | 2 | $ | 198 | $ | 190 | $ | 1 | $ | — | $ | 3 | $ | 194 | ||||||||||
Specific | 4 | — | — | — | 4 | 7 | — | — | — | 7 |
1. | The Firm recorded a provision for lending commitments of $16 million in the current quarter and $1 million in the prior year quarter. |
$ in millions | At June 30, 2019 | At December 31, 2018 | At September 30, 2019 | At December 31, 2018 | ||||||||
Balance | $ | 2,975 | $ | 3,415 | $ | 2,990 | $ | 3,415 | ||||
Allowance for loan losses | (63 | ) | (63 | ) | (61 | ) | (63 | ) | ||||
Balance, net | $ | 2,912 | $ | 3,352 | $ | 2,929 | $ | 3,352 | ||||
Remaining repayment term, weighted average in years | 4.7 | 4.3 | 4.7 | 4.3 |
$ in millions | At June 30, 2019 | At December 31, 2018 | At September 30, 2019 | At December 31, 2018 | ||||||||
Investments | $ | 2,404 | $ | 2,432 | $ | 2,391 | $ | 2,432 |
Three Months Ended June 30, | Six Months Ended June 30, | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||
$ in millions | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||
Income (loss) | $ | (16 | ) | $ | 4 | $ | (26 | ) | $ | 54 | $ | (13 | ) | $ | 8 | $ | (39 | ) | $ | 62 |
Three Months Ended June 30, | Six Months Ended June 30, | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||
$ in millions | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||
Income from investment in MUMSS | $ | 6 | $ | 26 | $ | 9 | $ | 82 | ||||||||||||||||
Income (loss) from investment in MUMSS | $ | (4 | ) | $ | 17 | $ | 5 | $ | 99 |
65 |
Notes to Consolidated Financial Statements (Unaudited) |
$ in millions | At June 30, 2019 | At December 31, 2018 | At September 30, 2019 | At December 31, 2018 | ||||||||
Savings and demand deposits | $ | 138,014 | $ | 154,897 | $ | 141,344 | $ | 154,897 | ||||
Time deposits | 38,579 | 32,923 | 39,394 | 32,923 | ||||||||
Total | $ | 176,593 | $ | 187,820 | $ | 180,738 | $ | 187,820 | ||||
Deposits subject to FDIC insurance | $ | 140,873 | $ | 144,515 | $ | 143,697 | $ | 144,515 | ||||
Time deposits that equal or exceed the FDIC insurance limit | $ | 26 | $ | 11 | $ | 18 | $ | 11 |
$ in millions | At June 30, 2019 | At September 30, 2019 | ||||
2019 | $ | 9,767 | $ | 5,394 | ||
2020 | 16,363 | 18,091 | ||||
2021 | 6,014 | 8,274 | ||||
2022 | 2,480 | 2,783 | ||||
2023 | 2,369 | 2,704 | ||||
Thereafter | 1,586 | 2,148 | ||||
Total | $ | 38,579 | $ | 39,394 |
$ in millions | At June 30, 2019 | At December 31, 2018 | At September 30, 2019 | At December 31, 2018 | ||||||||
Original maturities of one year or less | $ | 1,776 | $ | 1,545 | $ | 1,297 | $ | 1,545 | Original maturities greater than one year | |||
Senior | $ | 185,516 | $ | 178,027 | $ | 181,668 | $ | 178,027 | ||||
Subordinated | 10,556 | 10,090 | 10,694 | 10,090 | ||||||||
Total | $ | 196,072 | $ | 188,117 | $ | 192,362 | $ | 188,117 | ||||
Total borrowings | $ | 197,848 | $ | 189,662 | $ | 193,659 | $ | 189,662 | ||||
Weighted average stated maturity, in years1 | 6.8 | 6.5 | 6.9 | 6.5 |
1. | Only includes borrowings with original maturities greater than one year. |
$ in millions | At June 30, 2019 | At December 31, 2018 | At September 30, 2019 | At December 31, 2018 | ||||||||
Original maturities: | ||||||||||||
Greater than one year | $ | 5,048 | $ | 6,772 | $ | 4,476 | $ | 6,772 | ||||
One year or less | 4,353 | 2,036 | 4,089 | 2,036 | ||||||||
Failed sales | 2,580 | 658 | 1,271 | 658 | ||||||||
Total | $ | 11,981 | $ | 9,466 | $ | 9,836 | $ | 9,466 |
66 |
Notes to Consolidated Financial Statements (Unaudited) |
Years to Maturity at June 30, 2019 | Years to Maturity at September 30, 2019 | |||||||||||||||||||||||||||||
$ in millions | Less than 1 | 1-3 | 3-5 | Over 5 | Total | Less than 1 | 1-3 | 3-5 | Over 5 | Total | ||||||||||||||||||||
Lending: | Lending: | Lending: | ||||||||||||||||||||||||||||
Corporate | $ | 29,788 | $ | 33,262 | $ | 47,590 | $ | 7,109 | $ | 117,749 | $ | 23,252 | $ | 33,207 | $ | 48,734 | $ | 5,447 | $ | 110,640 | ||||||||||
Consumer | 7,522 | 1 | 11 | — | 7,534 | 7,769 | 6 | 12 | — | 7,787 | ||||||||||||||||||||
Residential and commercial real estate | 85 | 466 | 11 | 477 | 1,039 | 380 | 1,148 | 75 | 277 | 1,880 | ||||||||||||||||||||
Forward-starting secured financing receivables | 109,906 | — | — | 8,556 | 118,462 | 75,785 | 635 | — | 11,612 | 88,032 | ||||||||||||||||||||
Underwriting | 1,104 | — | — | — | 1,104 | 561 | — | — | — | 561 | ||||||||||||||||||||
Investment activities | 537 | 121 | 39 | 249 | 946 | 508 | 131 | 50 | 250 | 939 | ||||||||||||||||||||
Letters of credit and other financial guarantees | 186 | 1 | — | 2 | 189 | 189 | 2 | — | 2 | 193 | ||||||||||||||||||||
Total | $ | 149,128 | $ | 33,851 | $ | 47,651 | $ | 16,393 | $ | 247,023 | $ | 108,444 | $ | 35,129 | $ | 48,871 | $ | 17,588 | $ | 210,032 | ||||||||||
Corporate lending commitments participated to third parties | Corporate lending commitments participated to third parties | $ | 7,998 | Corporate lending commitments participated to third parties | $ | 7,867 | ||||||||||||||||||||||||
Forward-starting secured financing receivables settled within three business days | Forward-starting secured financing receivables settled within three business days | $ | 97,767 | Forward-starting secured financing receivables settled within three business days | $ | 60,893 |
$ in millions | At June 30, 2019 | At September 30, 2019 | ||||
Other assets—ROU assets | $ | 3,859 | $ | 3,825 | ||
Other liabilities and accrued expenses— | ||||||
Lease liabilities | 4,595 | 4,535 | ||||
Weighted average: | ||||||
Remaining lease term, in years | 9.8 | 9.6 | ||||
Discount rate | 3.7 | % | 3.7 | % |
$ in millions | At June 30, 2019 | At September 30, 2019 | ||||
Remainder of 2019 | $ | 366 | $ | 185 | ||
2020 | 716 | 719 | ||||
2021 | 653 | 659 | ||||
2022 | 599 | 606 | ||||
2023 | 548 | 554 | ||||
Thereafter | 2,816 | 2,817 | ||||
Total undiscounted cash flows | $ | 5,698 | $ | 5,540 | ||
Imputed interest | (1,103 | ) | (1,005 | ) | ||
Amount on balance sheet | $ | 4,595 | $ | 4,535 |
$ in millions | Three Months Ended June 30, 2019 | Six Months Ended June 30, 2019 | Three Months Ended September 30, 2019 | Nine Months Ended September 30, 2019 | ||||||||
Fixed costs | $ | 156 | $ | 326 | $ | 173 | $ | 499 | ||||
Variable costs1 | 48 | 82 | 33 | 115 | ||||||||
Less: Sublease income | (1 | ) | (2 | ) | (1 | ) | (3 | ) | ||||
Total lease cost, net | 203 | 406 | $ | 205 | $ | 611 |
1. | Includes common area maintenance charges and other variable costs not included in the measurement of ROU assets and lease liabilities. |
$ in millions | Three Months Ended June 30, 2019 | Six Months Ended June 30, 2019 | Three Months Ended September 30, 2019 | Nine Months Ended September 30, 2019 | ||||||||
Cash outflows—Lease liabilities | $ | 167 | $ | 332 | $ | 177 | $ | 509 | ||||
Non-cash—ROU assets recorded for new and modified leases | 71 | 111 | 104 | 215 |
$ in millions | At December 31, 2018 | ||
2019 | $ | 677 | |
2020 | 657 | ||
2021 | 602 | ||
2022 | 555 | ||
2023 | 507 | ||
Thereafter | 2,639 | ||
Total undiscounted cash flows | $ | 5,637 | |
Minimum rental income to be received in the future under non-cancelable operating subleases | $ | 7 |
67 |
Notes to Consolidated Financial Statements (Unaudited) |
Maximum Potential Payout/Notional | Maximum Potential Payout/Notional | |||||||||||||||||||||||||||||
Years to Maturity | Years to Maturity | |||||||||||||||||||||||||||||
$ in millions | Less than 1 | 1-3 | 3-5 | Over 5 | Total | Less than 1 | 1-3 | 3-5 | Over 5 | Total | ||||||||||||||||||||
Credit derivatives | $ | 36,335 | $ | 44,060 | $ | 80,905 | $ | 31,704 | $ | 193,004 | $ | 33,594 | $ | 40,198 | $ | 96,188 | $ | 59,432 | $ | 229,412 | ||||||||||
Other credit contracts | — | — | 7 | 116 | 123 | — | — | — | 116 | 116 | ||||||||||||||||||||
Non-credit derivatives | 1,715,336 | 1,504,933 | 452,278 | 669,229 | 4,341,776 | 1,715,003 | 1,467,985 | 434,155 | 673,378 | 4,290,521 | ||||||||||||||||||||
Standby letters of credit and other financial guarantees issued1 | 1,255 | 889 | 1,357 | 4,193 | 7,694 | 1,018 | 886 | 1,410 | 4,217 | 7,531 | ||||||||||||||||||||
Market value guarantees | 95 | 96 | 3 | — | 194 | 85 | 89 | 1 | — | 175 | ||||||||||||||||||||
Liquidity facilities | 4,501 | — | — | — | 4,501 | 4,545 | — | — | — | 4,545 | ||||||||||||||||||||
Whole loan sales guarantees | — | 1 | — | 23,192 | 23,193 | — | — | — | 23,196 | 23,196 | ||||||||||||||||||||
Securitization representations and warranties | — | — | — | 68,120 | 68,120 | — | — | — | 66,530 | 66,530 | ||||||||||||||||||||
General partner guarantees | 63 | 129 | 6 | 44 | 242 | 65 | 127 | 12 | 71 | 275 | ||||||||||||||||||||
Client clearing guarantees | 1,947 | — | — | — | 1,947 | 9,746 | — | — | — | 9,746 |
$ in millions | Carrying Amount Asset (Liability) | Collateral/ Recourse | Carrying Amount Asset (Liability) | Collateral/ Recourse | ||||||||
Credit derivatives2 | $ | 484 | $ | — | $ | 789 | $ | — | ||||
Other credit contracts | (11 | ) | — | (18 | ) | — | ||||||
Non-credit derivatives2 | (56,357 | ) | — | (76,165 | ) | — | ||||||
Standby letters of credit and other financial guarantees issued1 | 231 | 6,163 | 224 | 6,488 | ||||||||
Market value guarantees | — | 90 | — | 72 | ||||||||
Liquidity facilities | 6 | 7,793 | 6 | 7,925 | ||||||||
Whole loan sales guarantees | (4 | ) | — | — | — | |||||||
Securitization representations and warranties3 | (42 | ) | — | (42 | ) | — | ||||||
General partner guarantees | (53 | ) | — | (44 | ) | — | ||||||
Client clearing guarantees | — | 1,946 | — | 9,745 |
1. | These amounts include certain issued standby letters of credit participated to third parties, totaling $0.6 billion of notional and collateral/recourse, due to the nature of the Firm’s obligations under these arrangements. |
2. |
3. | Primarily related to residential mortgage securitizations. |
68 |
Notes to Consolidated Financial Statements (Unaudited) |
69 |
Notes to Consolidated Financial Statements (Unaudited) |
70 |
Notes to Consolidated Financial Statements (Unaudited) |
At June 30, 2019 | At December 31, 2018 | At September 30, 2019 | At December 31, 2018 | |||||||||||||||||||||
$ in millions | VIE Assets | VIE Liabilities | VIE Assets | VIE Liabilities | VIE Assets | VIE Liabilities | VIE Assets | VIE Liabilities | ||||||||||||||||
OSF | $ | 248 | $ | — | $ | 267 | $ | — | $ | 281 | $ | — | $ | 267 | $ | — | ||||||||
MABS1 | 343 | 15 | 59 | 38 | 13 | 4 | 59 | 38 | ||||||||||||||||
Other2 | 870 | 61 | 809 | 48 | 879 | 69 | 809 | 48 | ||||||||||||||||
Total | $ | 1,461 | $ | 76 | $ | 1,135 | $ | 86 | $ | 1,173 | $ | 73 | $ | 1,135 | $ | 86 |
1. | Amounts include transactions backed by residential mortgage loans, commercial mortgage loans and other types of assets, including consumer or commercial assets. The value of assets is determined based on the fair value of the liabilities and the interests owned by the Firm in such VIEs as the fair values for the liabilities and interests owned are more observable. |
2. | Other primarily includes certain operating entities, investment funds and structured transactions. |
$ in millions | At June 30, 2019 | At December 31, 2018 | At September 30, 2019 | At December 31, 2018 | ||||||||
Assets | ||||||||||||
Cash and cash equivalents: | ||||||||||||
Cash and due from banks | $ | 103 | $ | 77 | $ | 104 | $ | 77 | ||||
Restricted cash | 172 | 171 | 173 | 171 | ||||||||
Trading assets at fair value | 643 | 314 | 374 | 314 | ||||||||
Customer and other receivables | 11 | 25 | 10 | 25 | ||||||||
Goodwill | 18 | 18 | — | 18 | ||||||||
Intangible assets | 99 | 128 | 114 | 128 | ||||||||
Other assets | 415 | 402 | 398 | 402 | ||||||||
Total | $ | 1,461 | $ | 1,135 | $ | 1,173 | $ | 1,135 | ||||
Liabilities | ||||||||||||
Other secured financings | $ | 44 | $ | 64 | $ | 32 | $ | 64 | ||||
Other liabilities and accrued expenses | 32 | 22 | 41 | 22 | ||||||||
Total | $ | 76 | $ | 86 | $ | 73 | $ | 86 | ||||
Noncontrolling interests | $ | 131 | $ | 106 | $ | 160 | $ | 106 |
71 |
Notes to Consolidated Financial Statements (Unaudited) |
At June 30, 2019 | At September 30, 2019 | |||||||||||||||||||||||||||||
$ in millions | MABS | CDO | MTOB | OSF | Other | MABS1 | CDO | MTOB | OSF | Other2 | ||||||||||||||||||||
VIE assets (UPB) | $ | 77,872 | $ | 3,384 | $ | 6,862 | $ | 2,332 | $ | 22,065 | $ | 115,498 | $ | 1,475 | $ | 7,011 | $ | 2,298 | $ | 42,383 | ||||||||||
Maximum exposure to loss1 | ||||||||||||||||||||||||||||||
Maximum exposure to loss3 | Maximum exposure to loss3 | |||||||||||||||||||||||||||||
Debt and equity interests | $ | 8,221 | $ | 241 | $ | — | $ | 982 | $ | 6,281 | $ | 15,538 | $ | 157 | $ | 62 | $ | 965 | $ | 10,393 | ||||||||||
Derivative and other contracts | — | — | 4,501 | — | 2,569 | — | — | 4,545 | — | 2,979 | ||||||||||||||||||||
Commitments, guarantees and other | 364 | — | — | — | 430 | 660 | — | — | — | 783 | ||||||||||||||||||||
Total | $ | 8,585 | $ | 241 | $ | 4,501 | $ | 982 | $ | 9,280 | $ | 16,198 | $ | 157 | $ | 4,607 | $ | 965 | $ | 14,155 | ||||||||||
Carrying value of exposure to loss—Assets | ||||||||||||||||||||||||||||||
Carrying value of variable interests—Assets | Carrying value of variable interests—Assets | |||||||||||||||||||||||||||||
Debt and equity interests | $ | 8,221 | $ | 241 | $ | — | $ | 981 | $ | 6,281 | $ | 15,538 | $ | 157 | $ | 62 | $ | 964 | $ | 10,393 | ||||||||||
Derivative and other contracts | — | — | 6 | — | 153 | — | — | 6 | — | 208 | ||||||||||||||||||||
Total | $ | 8,221 | $ | 241 | $ | 6 | $ | 981 | $ | 6,434 | $ | 15,538 | $ | 157 | $ | 68 | $ | 964 | $ | 10,601 | ||||||||||
Additional VIE assets owned2 | $ | 10,921 | ||||||||||||||||||||||||||||
Carrying value of exposure to loss—Liabilities | ||||||||||||||||||||||||||||||
Additional VIE assets owned4 | Additional VIE assets owned4 | $ | 11,192 | |||||||||||||||||||||||||||
Carrying value of variable interests—Liabilities | Carrying value of variable interests—Liabilities | |||||||||||||||||||||||||||||
Derivative and other contracts | $ | — | $ | — | $ | — | $ | — | $ | 161 | $ | — | $ | — | $ | — | $ | — | $ | 211 |
At December 31, 2018 | At December 31, 20185 | |||||||||||||||||||||||||||||
$ in millions | MABS | CDO | MTOB | OSF | Other | MABS1 | CDO | MTOB | OSF | Other2 | ||||||||||||||||||||
VIE assets (UPB) | $ | 71,287 | $ | 10,848 | $ | 7,014 | $ | 3,314 | $ | 19,682 | $ | 106,197 | $ | 10,848 | $ | 7,014 | $ | 3,314 | $ | 38,603 | ||||||||||
Maximum exposure to loss1 | ||||||||||||||||||||||||||||||
Maximum exposure to loss3 | Maximum exposure to loss3 | |||||||||||||||||||||||||||||
Debt and equity interests | $ | 8,234 | $ | 1,169 | $ | — | $ | 1,622 | $ | 4,645 | $ | 15,671 | $ | 1,169 | $ | — | $ | 1,622 | $ | 7,967 | ||||||||||
Derivative and other contracts | — | — | 4,449 | — | 1,768 | — | — | 4,449 | — | 1,768 | ||||||||||||||||||||
Commitments, guarantees and other | 397 | 3 | — | 235 | 327 | 1,073 | 3 | — | 235 | 509 | ||||||||||||||||||||
Total | $ | 8,631 | $ | 1,172 | $ | 4,449 | $ | 1,857 | $ | 6,740 | $ | 16,744 | $ | 1,172 | $ | 4,449 | $ | 1,857 | $ | 10,244 | ||||||||||
Carrying value of exposure to loss—Assets | ||||||||||||||||||||||||||||||
Carrying value of variable interests–Assets | Carrying value of variable interests–Assets | |||||||||||||||||||||||||||||
Debt and equity interests | $ | 8,234 | $ | 1,169 | $ | — | $ | 1,205 | $ | 4,645 | $ | 15,671 | $ | 1,169 | $ | — | $ | 1,205 | $ | 7,967 | ||||||||||
Derivative and other contracts | — | — | 6 | — | 87 | — | — | 6 | — | 87 | ||||||||||||||||||||
Total | $ | 8,234 | $ | 1,169 | $ | 6 | $ | 1,205 | $ | 4,732 | $ | 15,671 | $ | 1,169 | $ | 6 | $ | 1,205 | $ | 8,054 | ||||||||||
Additional VIE assets owned2 | $ | 11,969 | ||||||||||||||||||||||||||||
Carrying value of exposure to loss—Liabilities | ||||||||||||||||||||||||||||||
Additional VIE assets owned4 | Additional VIE assets owned4 | $ | 12,059 | |||||||||||||||||||||||||||
Carrying value of variable interests—Liabilities | Carrying value of variable interests—Liabilities | |||||||||||||||||||||||||||||
Derivative and other contracts | $ | — | $ | — | $ | — | $ | — | $ | 185 | $ | — | $ | — | $ | — | $ | — | $ | 185 |
1. | MABS includes loan– and security–form interests collateralized by pools of residential and commercial mortgages. |
2. | Other primarily includes exposures to commercial real estate property and investment funds. |
3. | Where notional amounts are utilized in quantifying the maximum exposure related to derivatives, such amounts do not reflect changes in fair value recorded by the Firm. |
Additional VIE assets owned represents the carrying value of total exposure to non-consolidated VIEs for which the maximum exposure to loss is less than specific thresholds, primarily interests issued by securitization SPEs. The Firm’s primary risk exposure is to the most subordinate class of beneficial interest and maximum exposure to loss generally equals the fair value of the assets owned. These assets are primarily included in Trading assets and Investment securities and are measured at fair value (see Note 3). The Firm does not provide additional support in these transactions through contractual facilities, guarantees or similar derivatives. |
5. | The carrying value and maximum exposure to loss of variable interests related to MABS and Other have been revised to reflect the addition of approximately $11 billion in loans to VIEs that were previously excluded. The VIE asset (UPB) amounts have also been revised by approximately $54 billion. This disclosure-only revision did not impact the Firm’s balance sheets. |
At June 30, 2019 | At December 31, 2018 | At September 30, 2019 | At December 31, 20181 | |||||||||||||||||||||
$ in millions | UPB | Debt and Equity Interests | UPB | Debt and Equity Interests | UPB | Debt and Equity Interests | UPB | Debt and Equity Interests | ||||||||||||||||
Residential mortgages | $ | 12,843 | $ | 503 | $ | 6,954 | $ | 745 | $ | 28,005 | $ | 4,144 | $ | 27,594 | $ | 4,581 | ||||||||
Commercial mortgages | 37,960 | 1,346 | 42,974 | 1,237 | 49,354 | 3,969 | 55,501 | 4,327 | ||||||||||||||||
U.S. agency collateralized mortgage obligations | 20,232 | 3,924 | 14,969 | 3,443 | 31,997 | 5,341 | 14,969 | 3,443 | ||||||||||||||||
Other consumer or commercial loans | 6,837 | 2,448 | 6,390 | 2,809 | 6,142 | 2,084 | 8,133 | 3,320 | ||||||||||||||||
Total | $ | 77,872 | $ | 8,221 | $ | 71,287 | $ | 8,234 | $ | 115,498 | $ | 15,538 | $ | 106,197 | $ | 15,671 |
1. | The balances as of December 31, 2018 were revised as noted in the Non-consolidated VIEs table herein. |
At June 30, 2019 | At September 30, 20191 | |||||||||||||||||||||||
$ in millions | RML | CML | U.S. Agency CMO | CLN and Other2 | RML | CML | U.S. Agency CMO | CLN and Other2 | ||||||||||||||||
SPE assets (UPB)3 | $ | 14,334 | $ | 74,243 | $ | 18,449 | $ | 4,157 | $ | 12,726 | $ | 77,431 | $ | 14,841 | $ | 6,637 | Retained interests | |||||||
Investment grade | $ | 32 | $ | 557 | $ | 455 | $ | 2 | $ | 27 | $ | 620 | $ | 1,463 | $ | 1 | ||||||||
Non-investment grade | 5 | 186 | — | 87 | 18 | 199 | — | 89 | ||||||||||||||||
Total | $ | 37 | $ | 743 | $ | 455 | $ | 89 | $ | 45 | $ | 819 | $ | 1,463 | $ | 90 | Interests purchased in the secondary market (fair value) | |||||||
Investment grade | $ | 22 | $ | 218 | $ | 862 | $ | — | $ | 7 | $ | 244 | $ | 15 | $ | 5 | ||||||||
Non-investment grade | 37 | 34 | — | — | 35 | 22 | — | — | ||||||||||||||||
Total | $ | 59 | $ | 252 | $ | 862 | $ | — | $ | 42 | $ | 266 | $ | 15 | $ | 5 | ||||||||
Derivative assets (fair value) | $ | — | $ | — | $ | — | $ | 85 | $ | — | $ | — | $ | — | $ | 201 | ||||||||
Derivative liabilities (fair value) | — | — | — | 63 | — | — | — | 69 |
72 |
Notes to Consolidated Financial Statements (Unaudited) |
At December 31, 2018 | ||||||||||||
$ in millions | RML | CML | U.S. Agency CMO | CLN and Other2 | ||||||||
SPE assets (UPB)3 | $ | 14,376 | $ | 68,593 | $ | 16,594 | $ | 14,608 | ||||
Retained interests | ||||||||||||
Investment grade | $ | 17 | $ | 483 | $ | 1,573 | $ | 3 | ||||
Non-investment grade (fair value) | 4 | 212 | — | 210 | ||||||||
Total | $ | 21 | $ | 695 | $ | 1,573 | $ | 213 | ||||
Interests purchased in the secondary market (fair value) | ||||||||||||
Investment grade | $ | 7 | $ | 91 | $ | 102 | $ | — | ||||
Non-investment grade | 28 | 71 | — | — | ||||||||
Total | $ | 35 | $ | 162 | $ | 102 | $ | — | ||||
Derivative assets (fair value) | $ | — | $ | — | $ | — | $ | 216 | ||||
Derivative liabilities (fair value) | — | — | — | 178 |
Fair Value At June 30, 2019 | Fair Value At September 30, 2019 | |||||||||||||||||
$ in millions | Level 2 | Level 3 | Total | Level 2 | Level 3 | Total | ||||||||||||
Retained interests | ||||||||||||||||||
Investment grade | $ | 469 | $ | 11 | $ | 480 | $ | 1,475 | $ | 17 | $ | 1,492 | ||||||
Non-investment grade | 21 | 99 | 120 | 11 | 107 | 118 | ||||||||||||
Total | $ | 490 | $ | 110 | $ | 600 | $ | 1,486 | $ | 124 | $ | 1,610 | Interests purchased in the secondary market | |||||
Investment grade | $ | 1,095 | $ | 7 | $ | 1,102 | $ | 268 | $ | 3 | $ | 271 | ||||||
Non-investment grade | 53 | 18 | 71 | 37 | 20 | 57 | ||||||||||||
Total | $ | 1,148 | $ | 25 | $ | 1,173 | $ | 305 | $ | 23 | $ | 328 | ||||||
Derivative assets | $ | 11 | $ | 74 | $ | 85 | $ | 163 | $ | 38 | $ | 201 | ||||||
Derivative liabilities | 61 | 2 | 63 | 65 | 4 | 69 |
Fair Value At December 31, 2018 | |||||||||
$ in millions | Level 2 | Level 3 | Total | ||||||
Retained interests | |||||||||
Investment grade | $ | 1,580 | $ | 13 | $ | 1,593 | |||
Non-investment grade | 174 | 252 | 426 | ||||||
Total | $ | 1,754 | $ | 265 | $ | 2,019 | |||
Interests purchased in the secondary market | |||||||||
Investment grade | $ | 193 | $ | 7 | $ | 200 | |||
Non-investment grade | 83 | 16 | 99 | ||||||
Total | $ | 276 | $ | 23 | $ | 299 | |||
Derivative assets | $ | 121 | $ | 95 | $ | 216 | |||
Derivative liabilities | 175 | 3 | 178 |
1. |
2. | Amounts include CLO transactions managed by unrelated third parties. |
3. | Amounts include assets transferred by unrelated transferors. |
Three Months Ended June 30, | Six Months Ended June 30, | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||
$ in millions | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||
New transactions1 | $ | 7,513 | $ | 5,624 | $ | 12,246 | $ | 11,758 | $ | 8,651 | $ | 7,299 | $ | 20,897 | $ | 19,056 | ||||||||
Retained interests | 635 | 1,156 | 3,522 | 1,637 | 902 | 584 | 4,424 | 2,222 | ||||||||||||||||
Sales of corporate loans to CLO SPEs1, 2 | — | 142 | — | 236 | — | 17 | — | 253 |
1. | Net gains on new transactions and sales of corporate loans to CLO entities at the time of the sale were not material for all periods presented. |
2. | Sponsored by non-affiliates. |
$ in millions | At June 30, 2019 | At December 31, 2018 | At September 30, 2019 | At December 31, 2018 | ||||||||
Gross cash proceeds from sale of assets1 | $ | 34,628 | $ | 27,121 | $ | 35,328 | $ | 27,121 | ||||
Fair value | ||||||||||||
Assets sold | $ | 35,084 | $ | 26,524 | $ | 35,600 | $ | 26,524 | ||||
Derivative assets recognized in the balance sheets | 587 | 164 | 534 | 164 | ||||||||
Derivative liabilities recognized in the balance sheets | 67 | 763 | 250 | 763 |
1. | The carrying value of assets derecognized at the time of sale approximates gross cash proceeds. |
73 |
Notes to Consolidated Financial Statements (Unaudited) |
At June 30, 2019 | At September 30, 2019 | |||||||||||||
$ in millions | Required Ratio1 | Amount | Ratio | Required Ratio1 | Amount | Ratio | ||||||||
Risk-based capital | ||||||||||||||
Common Equity Tier 1 capital | 10.0 | % | $ | 64,011 | 16.3 | % | 10.0 | % | $ | 64,348 | 16.3 | % | ||
Tier 1 capital | 11.5 | % | 72,742 | 18.6 | % | 11.5 | % | 72,937 | 18.5 | % | ||||
Total capital | 13.5 | % | 82,322 | 21.0 | % | 13.5 | % | 82,661 | 20.9 | % | ||||
Total RWA | 391,509 | 394,875 | ||||||||||||
Leverage-based capital | ||||||||||||||
Tier 1 leverage | 4.0 | % | $ | 72,742 | 8.4 | % | 4.0 | % | $ | 72,937 | 8.2 | % | ||
Adjusted average assets2 | 868,494 | 892,912 | ||||||||||||
SLR | 5.0 | % | 72,742 | 6.5 | % | 5.0 | % | 72,937 | 6.3 | % | ||||
Supplementary leverage exposure3 | 1,124,645 | 1,155,497 |
At December 31, 2018 | |||||||
$ in millions | Required Ratio1 | Amount | Ratio | ||||
Risk-based capital | |||||||
Common Equity Tier 1 capital | 8.6 | % | $ | 62,086 | 16.9 | % | |
Tier 1 capital | 10.1 | % | 70,619 | 19.2 | % | ||
Total capital | 12.1 | % | 80,052 | 21.8 | % | ||
Total RWA | 367,309 | ||||||
Leverage-based capital | |||||||
Tier 1 leverage | 4.0 | % | $ | 70,619 | 8.4 | % | |
Adjusted average assets2 | 843,074 | ||||||
SLR | 5.0 | % | 70,619 | 6.5 | % | ||
Supplementary leverage exposure3 | 1,092,672 |
1. | Required ratios are inclusive of any buffers applicable as of the date presented. For 2018, the minimum required regulatory capital ratios for risk-based capital are under the transitional rules. |
2. | Adjusted average assets represents the denominator of the Tier 1 leverage ratio and is composed of the average daily balance of consolidated on-balance sheet assets during the quarters ended |
3. | Supplementary leverage exposure is the sum of Adjusted average assets used in the Tier 1 leverage ratio and other adjustments, primarily (i) for derivatives: potential future exposure and the effective notional principal amount of sold credit protection offset by qualifying purchased credit protection; (ii) the counterparty credit risk for repo-style transactions; and (iii) the credit equivalent amount for off-balance sheet exposures. |
74 |
Notes to Consolidated Financial Statements (Unaudited) |
At June 30, 2019 | At September 30, 2019 | |||||||||||||
$ in millions | Required Ratio1 | Amount | Ratio | Required Ratio1 | Amount | Ratio | ||||||||
Risk-based capital | ||||||||||||||
Common Equity Tier 1 capital | 6.5 | % | $ | 15,862 | 19.6 | % | 6.5 | % | $ | 16,641 | 19.9 | % | ||
Tier 1 capital | 8.0 | % | 15,862 | 19.6 | % | 8.0 | % | 16,641 | 19.9 | % | ||||
Total capital | 10.0 | % | 16,148 | 20.0 | % | 10.0 | % | 16,953 | 20.3 | % | ||||
Leverage-based capital | ||||||||||||||
Tier 1 leverage | 5.0 | % | $ | 15,862 | 11.3 | % | 5.0 | % | $ | 16,641 | 11.9 | % | ||
SLR | 6.0 | % | 15,862 | 8.7 | % | 6.0 | % | 16,641 | 9.2 | % |
At December 31, 2018 | |||||||
$ in millions | Required Ratio1 | Amount | Ratio | ||||
Risk-based capital | |||||||
Common Equity Tier 1 capital | 6.5 | % | $ | 15,221 | 19.5 | % | |
Tier 1 capital | 8.0 | % | 15,221 | 19.5 | % | ||
Total capital | 10.0 | % | 15,484 | 19.8 | % | ||
Leverage-based capital | |||||||
Tier 1 leverage | 5.0 | % | $ | 15,221 | 10.5 | % | |
SLR | 6.0 | % | 15,221 | 8.2 | % |
At June 30, 2019 | At September 30, 2019 | |||||||||||||
$ in millions | Required Ratio1 | Amount | Ratio | Required Ratio1 | Amount | Ratio | ||||||||
Risk-based capital | ||||||||||||||
Common Equity Tier 1 capital | 6.5 | % | $ | 7,945 | 27.4 | % | 6.5 | % | $ | 8,281 | 27.3 | % | ||
Tier 1 capital | 8.0 | % | 7,945 | 27.4 | % | 8.0 | % | 8,281 | 27.3 | % | ||||
Total capital | 10.0 | % | 7,992 | 27.6 | % | 10.0 | % | 8,331 | 27.5 | % | ||||
Leverage-based capital | ||||||||||||||
Tier 1 leverage | 5.0 | % | $ | 7,945 | 10.7 | % | 5.0 | % | $ | 8,281 | 10.8 | % | ||
SLR | 6.0 | % | 7,945 | 10.2 | % | 6.0 | % | 8,281 | 10.3 | % |
At December 31, 2018 | |||||||
$ in millions | Required Ratio1 | Amount | Ratio | ||||
Risk-based capital | |||||||
Common Equity Tier 1 capital | 6.5 | % | $ | 7,183 | 25.2 | % | |
Tier 1 capital | 8.0 | % | 7,183 | 25.2 | % | ||
Total capital | 10.0 | % | 7,229 | 25.4 | % | ||
Leverage-based capital | |||||||
Tier 1 leverage | 5.0 | % | $ | 7,183 | 10.0 | % | |
SLR | 6.0 | % | 7,183 | 9.6 | % |
1. | Ratios that are required in order to be considered well-capitalized for U.S. regulatory purposes. |
$ in millions | At June 30, 2019 | At December 31, 2018 | At September 30, 2019 | At December 31, 2018 | ||||||||
Net capital | $ | 12,581 | $ | 13,797 | $ | 13,358 | $ | 13,797 | ||||
Excess net capital | 9,996 | 11,333 | 10,453 | 11,333 |
$ in millions | At June 30, 2019 | At December 31, 2018 | At September 30, 2019 | At December 31, 2018 | ||||||||
Net capital | $ | 3,361 | $ | 3,455 | $ | 3,772 | $ | 3,455 | ||||
Excess net capital | 3,219 | 3,313 | 3,634 | 3,313 |
75 |
Notes to Consolidated Financial Statements (Unaudited) |
Three Months Ended June 30, | Six Months Ended June 30, | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||
$ in millions | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||
Repurchases of common stock under our Share Repurchase Program | $ | 1,180 | $ | 1,250 | $ | 2,360 | $ | 2,500 | $ | 1,500 | $ | 1,180 | $ | 3,860 | $ | 3,680 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||
Dividends declared per common share | $ | 0.30 | $ | 0.25 | $ | 0.60 | $ | 0.50 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||
Dividends declared per common share | $ | 0.35 | $ | 0.30 | $ | 0.95 | $ | 0.80 |
Shares Outstanding | Carrying Value | Shares Outstanding | Carrying Value | |||||||||||||||||||
$ in millions, except per share data | At June 30, 2019 | Liquidation Preference per Share | At June 30, 2019 | At December 31, 2018 | At September 30, 2019 | Liquidation Preference per Share | At September 30, 2019 | At December 31, 2018 | ||||||||||||||
Series | ||||||||||||||||||||||
A | 44,000 | $ | 25,000 | $ | 1,100 | $ | 1,100 | 44,000 | $ | 25,000 | $ | 1,100 | $ | 1,100 | ||||||||
C1 | 519,882 | 1,000 | 408 | 408 | 519,882 | 1,000 | 408 | 408 | ||||||||||||||
E | 34,500 | 25,000 | 862 | 862 | 34,500 | 25,000 | 862 | 862 | ||||||||||||||
F | 34,000 | 25,000 | 850 | 850 | 34,000 | 25,000 | 850 | 850 | ||||||||||||||
G | 20,000 | 25,000 | 500 | 500 | 20,000 | 25,000 | 500 | 500 | ||||||||||||||
H | 52,000 | 25,000 | 1,300 | 1,300 | 52,000 | 25,000 | 1,300 | 1,300 | ||||||||||||||
I | 40,000 | 25,000 | 1,000 | 1,000 | 40,000 | 25,000 | 1,000 | 1,000 | ||||||||||||||
J | 60,000 | 25,000 | 1,500 | 1,500 | 60,000 | 25,000 | 1,500 | 1,500 | ||||||||||||||
K | 40,000 | 25,000 | 1,000 | 1,000 | 40,000 | 25,000 | 1,000 | 1,000 | ||||||||||||||
Total | Total | $ | 8,520 | $ | 8,520 | Total | $ | 8,520 | $ | 8,520 | ||||||||||||
Shares authorized | Shares authorized | 30,000,000 |
1. | Series C is composed of the issuance of 1,160,791 shares of Series C Preferred Stock to MUFG for an aggregate purchase price of $911 million, less the redemption of 640,909 shares of Series C Preferred Stock of $503 million, which were converted to common shares of approximately $705 million. |
$ in millions, except per share data | Three Months Ended June 30, 2019 | Three Months Ended June 30, 2018 | Three Months Ended September 30, 2019 | Three Months Ended September 30, 2018 | ||||||||||||||||||||
Per Share1 | Total | Per Share1 | Total | Per Share1 | Total | Per Share1 | Total | |||||||||||||||||
Series | ||||||||||||||||||||||||
A | $ | 253 | $ | 11 | $ | 253 | $ | 11 | $ | 256 | $ | 11 | $ | 256 | $ | 11 | ||||||||
C | 25 | 13 | 25 | 13 | 25 | 13 | 25 | 13 | ||||||||||||||||
E | 445 | 15 | 445 | 15 | 445 | 15 | 445 | 15 | ||||||||||||||||
F | 430 | 15 | 430 | 15 | 430 | 15 | 430 | 15 | ||||||||||||||||
G | 414 | 8 | 414 | 8 | 414 | 8 | 414 | 8 | ||||||||||||||||
H | 681 | 35 | 681 | 35 | 378 | 20 | — | — | ||||||||||||||||
I | 398 | 16 | 398 | 16 | 398 | 16 | 398 | 16 | ||||||||||||||||
J | 694 | 42 | 694 | 42 | — | — | — | — | ||||||||||||||||
K | 366 | 15 | 366 | 15 | 366 | 15 | 366 | 15 | ||||||||||||||||
Total | $ | 170 | $ | 170 | $ | 113 | $ | 93 |
76 |
Notes to Consolidated Financial Statements (Unaudited) |
$ in millions, except per share data | Six Months Ended June 30, 2019 | Six Months Ended June 30, 2018 | Nine Months Ended September 30, 2019 | Nine Months Ended September 30, 2018 | ||||||||||||||||||||
Per Share1 | Total | Per Share1 | Total | Per Share1 | Total | Per Share1 | Total | |||||||||||||||||
Series | ||||||||||||||||||||||||
A | $ | 503 | $ | 22 | $ | 503 | $ | 22 | $ | 758 | $ | 33 | $ | 758 | $ | 33 | ||||||||
C | 50 | 26 | 50 | 26 | 75 | 39 | 75 | 39 | ||||||||||||||||
E | 891 | 30 | 891 | 30 | 1,336 | 45 | 1,336 | 45 | ||||||||||||||||
F | 859 | 30 | 859 | 30 | 1,289 | 45 | 1,289 | 45 | ||||||||||||||||
G | 828 | 16 | 828 | 16 | 1,242 | 24 | 1,242 | 24 | ||||||||||||||||
H | 681 | 35 | 681 | 35 | 1,059 | 55 | 681 | 35 | ||||||||||||||||
I | 797 | 32 | 797 | 32 | 1,195 | 48 | 1,195 | 48 | ||||||||||||||||
J | 694 | 42 | 694 | 42 | 694 | 42 | 694 | 42 | ||||||||||||||||
K | 731 | 30 | 731 | 30 | 1,097 | 45 | 1,097 | 45 | ||||||||||||||||
Total | $ | 263 | $ | 263 | $ | 376 | $ | 356 |
1. | Dividends on preferred stock are payable quarterly, except for Series H, which was payable semiannually until July 15, 2019 and is now payable quarterly, and Series J, which is payable semiannually until July 15, 2020, and quarterly thereafter. |
$ in millions | Foreign Currency Translation Adjustments | AFS Securities | Pension, Postretirement and Other | DVA | Total | Foreign Currency Translation Adjustments | AFS Securities | Pension, Postretirement and Other | DVA | Total | ||||||||||||||||||||
March 31, 2019 | $ | (901 | ) | $ | (501 | ) | $ | (577 | ) | $ | (494 | ) | $ | (2,473 | ) | |||||||||||||||
June 30, 2019 | $ | (865 | ) | $ | 108 | $ | (574 | ) | $ | (720 | ) | $ | (2,051 | ) | ||||||||||||||||
OCI during the period | 36 | 609 | 3 | (226 | ) | 422 | (96 | ) | 214 | 3 | 332 | 453 | ||||||||||||||||||
June 30, 2019 | $ | (865 | ) | $ | 108 | $ | (574 | ) | $ | (720 | ) | $ | (2,051 | ) | ||||||||||||||||
March 31, 2018 | $ | (715 | ) | $ | (1,068 | ) | $ | (710 | ) | $ | (913 | ) | $ | (3,406 | ) | |||||||||||||||
September 30, 2019 | $ | (961 | ) | $ | 322 | $ | (571 | ) | $ | (388 | ) | $ | (1,598 | ) | ||||||||||||||||
June 30, 2018 | $ | (864 | ) | $ | (1,194 | ) | $ | (704 | ) | $ | (308 | ) | $ | (3,070 | ) | |||||||||||||||
OCI during the period | (149 | ) | (126 | ) | 6 | 605 | 336 | (54 | ) | (171 | ) | 5 | (709 | ) | (929 | ) | ||||||||||||||
June 30, 2018 | $ | (864 | ) | $ | (1,194 | ) | $ | (704 | ) | $ | (308 | ) | $ | (3,070 | ) | |||||||||||||||
September 30, 2018 | $ | (918 | ) | $ | (1,365 | ) | $ | (699 | ) | $ | (1,017 | ) | $ | (3,999 | ) | |||||||||||||||
December 31, 2018 | $ | (889 | ) | $ | (930 | ) | $ | (578 | ) | $ | 105 | $ | (2,292 | ) | $ | (889 | ) | $ | (930 | ) | $ | (578 | ) | $ | 105 | $ | (2,292 | ) | ||
OCI during the period | 24 | 1,038 | 4 | (825 | ) | 241 | (72 | ) | 1,252 | 7 | (493 | ) | 694 | |||||||||||||||||
June 30, 2019 | $ | (865 | ) | $ | 108 | $ | (574 | ) | $ | (720 | ) | $ | (2,051 | ) | ||||||||||||||||
September 30, 2019 | $ | (961 | ) | $ | 322 | $ | (571 | ) | $ | (388 | ) | $ | (1,598 | ) | ||||||||||||||||
December 31, 2017 | $ | (767 | ) | $ | (547 | ) | $ | (591 | ) | $ | (1,155 | ) | $ | (3,060 | ) | $ | (767 | ) | $ | (547 | ) | $ | (591 | ) | $ | (1,155 | ) | $ | (3,060 | ) |
Cumulative adjustment for accounting changes2 | (8 | ) | (111 | ) | (124 | ) | (194 | ) | (437 | ) | (8 | ) | (111 | ) | (124 | ) | (194 | ) | (437 | ) | ||||||||||
OCI during the period | (89 | ) | (536 | ) | 11 | 1,041 | 427 | (143 | ) | (707 | ) | 16 | 332 | (502 | ) | |||||||||||||||
June 30, 2018 | $ | (864 | ) | $ | (1,194 | ) | $ | (704 | ) | $ | (308 | ) | $ | (3,070 | ) | |||||||||||||||
September 30, 2018 | $ | (918 | ) | $ | (1,365 | ) | $ | (699 | ) | $ | (1,017 | ) | $ | (3,999 | ) |
1. | Amounts are net of tax and exclude noncontrolling interests. |
2. | The cumulative adjustment for accounting changes is primarily the effect of the adoption of the accounting update Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. This adjustment was recorded as of January 1, 2018 to reclassify certain income tax effects related to enactment of the Tax Act from AOCI to Retained earnings, primarily related to the remeasurement of deferred tax assets and liabilities resulting from the reduction in the corporate income tax rate to 21%. See Note 2 for further information. |
Three Months Ended June 30, 2019 | Three Months Ended September 30, 2019 | |||||||||||||||||||||||||||||
$ in millions | Pre-tax Gain (Loss) | Income Tax Benefit (Provision) | After-tax Gain (Loss) | Non- controlling Interests | Net | Pre-tax Gain (Loss) | Income Tax Benefit (Provision) | After-tax Gain (Loss) | Non- controlling Interests | Net | Foreign currency translation adjustments | |||||||||||||||||||
OCI activity | $ | 32 | $ | 33 | $ | 65 | $ | 29 | $ | 36 | $ | (26 | ) | $ | (73 | ) | $ | (99 | ) | $ | (3 | ) | $ | (96 | ) | |||||
Reclassified to earnings | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||
Net OCI | $ | 32 | $ | 33 | $ | 65 | $ | 29 | $ | 36 | $ | (26 | ) | $ | (73 | ) | $ | (99 | ) | $ | (3 | ) | $ | (96 | ) | Change in net unrealized gains (losses) on AFS securities | ||||
OCI activity | $ | 849 | $ | (200 | ) | $ | 649 | $ | — | $ | 649 | $ | 307 | $ | (73 | ) | $ | 234 | $ | — | $ | 234 | ||||||||
Reclassified to earnings | (53 | ) | 13 | (40 | ) | — | (40 | ) | (26 | ) | 6 | (20 | ) | — | (20 | ) | ||||||||||||||
Net OCI | $ | 796 | $ | (187 | ) | $ | 609 | $ | — | $ | 609 | $ | 281 | $ | (67 | ) | $ | 214 | $ | — | $ | 214 | Pension, postretirement and other | |||||||
OCI activity | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
Reclassified to earnings | 3 | — | 3 | — | 3 | 4 | (1 | ) | 3 | — | 3 | |||||||||||||||||||
Net OCI | $ | 3 | $ | — | $ | 3 | $ | — | $ | 3 | $ | 4 | $ | (1 | ) | $ | 3 | $ | — | $ | 3 | Change in net DVA | ||||||||
OCI activity | $ | (330 | ) | $ | 82 | $ | (248 | ) | $ | (20 | ) | $ | (228 | ) | $ | 441 | $ | (106 | ) | $ | 335 | $ | 5 | $ | 330 | |||||
Reclassified to earnings | 3 | (1 | ) | 2 | — | 2 | 2 | — | 2 | — | 2 | |||||||||||||||||||
Net OCI | $ | (327 | ) | $ | 81 | $ | (246 | ) | $ | (20 | ) | $ | (226 | ) | $ | 443 | $ | (106 | ) | $ | 337 | $ | 5 | $ | 332 |
Three Months Ended June 30, 2018 | Three Months Ended September 30, 2018 | |||||||||||||||||||||||||||||
$ in millions | Pre-tax Gain (Loss) | Income Tax Benefit (Provision) | After-tax Gain (Loss) | Non- controlling Interests | Net | Pre-tax Gain (Loss) | Income Tax Benefit (Provision) | After-tax Gain (Loss) | Non- controlling Interests | Net | Foreign currency translation adjustments | |||||||||||||||||||
OCI activity | $ | (86 | ) | $ | (106 | ) | $ | (192 | ) | $ | (43 | ) | $ | (149 | ) | $ | (44 | ) | $ | (35 | ) | $ | (79 | ) | $ | (25 | ) | $ | (54 | ) |
Reclassified to earnings | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||
Net OCI | $ | (86 | ) | $ | (106 | ) | $ | (192 | ) | $ | (43 | ) | $ | (149 | ) | $ | (44 | ) | $ | (35 | ) | $ | (79 | ) | $ | (25 | ) | $ | (54 | ) | Change in net unrealized gains (losses) on AFS securities |
OCI activity | $ | (162 | ) | $ | 39 | $ | (123 | ) | $ | — | $ | (123 | ) | $ | (219 | ) | $ | 51 | $ | (168 | ) | $ | — | $ | (168 | ) | ||||
Reclassified to earnings | (3 | ) | — | (3 | ) | — | (3 | ) | (5 | ) | 2 | (3 | ) | — | (3 | ) | ||||||||||||||
Net OCI | $ | (165 | ) | $ | 39 | $ | (126 | ) | $ | — | $ | (126 | ) | $ | (224 | ) | $ | 53 | $ | (171 | ) | $ | — | $ | (171 | ) | Pension, postretirement and other | |||
OCI activity | $ | 2 | $ | — | $ | 2 | $ | — | $ | 2 | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
Reclassified to earnings | 6 | (2 | ) | 4 | — | 4 | 7 | (2 | ) | 5 | — | 5 | ||||||||||||||||||
Net OCI | $ | 8 | $ | (2 | ) | $ | 6 | $ | — | $ | 6 | $ | 7 | $ | (2 | ) | $ | 5 | $ | — | $ | 5 | Change in net DVA | |||||||
OCI activity | $ | 841 | $ | (205 | ) | $ | 636 | $ | 34 | $ | 602 | $ | (1,018 | ) | $ | 248 | $ | (770 | ) | $ | (34 | ) | $ | (736 | ) | |||||
Reclassified to earnings | 3 | — | 3 | — | 3 | 36 | (9 | ) | 27 | — | 27 | |||||||||||||||||||
Net OCI | $ | 844 | $ | (205 | ) | $ | 639 | $ | 34 | $ | 605 | $ | (982 | ) | $ | 239 | $ | (743 | ) | $ | (34 | ) | $ | (709 | ) |
77 |
Notes to Consolidated Financial Statements (Unaudited) |
Six Months Ended June 30, 20191 | Nine Months Ended September 30, 20191 | |||||||||||||||||||||||||||||
$ in millions | Pre-tax Gain (Loss) | Income Tax Benefit (Provision) | After-tax Gain (Loss) | Non- controlling Interests | Net | Pre-tax Gain (Loss) | Income Tax Benefit (Provision) | After-tax Gain (Loss) | Non- controlling Interests | Net | Foreign currency translation adjustments | |||||||||||||||||||
OCI activity | $ | 28 | $ | 15 | $ | 43 | $ | 19 | $ | 24 | $ | 2 | $ | (58 | ) | $ | (56 | ) | $ | 16 | $ | (72 | ) | |||||||
Reclassified to earnings | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||
Net OCI | $ | 28 | $ | 15 | $ | 43 | $ | 19 | $ | 24 | $ | 2 | $ | (58 | ) | $ | (56 | ) | $ | 16 | $ | (72 | ) | Change in net unrealized gains (losses) on AFS securities | ||||||
OCI activity | $ | 1,419 | $ | (333 | ) | $ | 1,086 | $ | — | $ | 1,086 | $ | 1,726 | $ | (406 | ) | $ | 1,320 | $ | — | $ | 1,320 | ||||||||
Reclassified to earnings | (63 | ) | 15 | (48 | ) | — | (48 | ) | (89 | ) | 21 | (68 | ) | — | (68 | ) | ||||||||||||||
Net OCI | $ | 1,356 | $ | (318 | ) | $ | 1,038 | $ | — | $ | 1,038 | $ | 1,637 | $ | (385 | ) | $ | 1,252 | $ | — | $ | 1,252 | Pension, postretirement and other | |||||||
OCI activity | $ | — | $ | (1 | ) | $ | (1 | ) | $ | — | $ | (1 | ) | $ | — | $ | (1 | ) | $ | (1 | ) | $ | — | $ | (1 | ) | ||||
Reclassified to earnings | 6 | (1 | ) | 5 | — | 5 | 10 | (2 | ) | 8 | — | 8 | ||||||||||||||||||
Net OCI | $ | 6 | $ | (2 | ) | $ | 4 | $ | — | $ | 4 | $ | 10 | $ | (3 | ) | $ | 7 | $ | — | $ | 7 | Change in net DVA | |||||||
OCI activity | $ | (1,154 | ) | $ | 283 | $ | (871 | ) | $ | (41 | ) | $ | (830 | ) | $ | (713 | ) | $ | 177 | $ | (536 | ) | $ | (36 | ) | $ | (500 | ) | ||
Reclassified to earnings | 7 | (2 | ) | 5 | — | 5 | 9 | (2 | ) | 7 | — | 7 | ||||||||||||||||||
Net OCI | $ | (1,147 | ) | $ | 281 | $ | (866 | ) | $ | (41 | ) | $ | (825 | ) | $ | (704 | ) | $ | 175 | $ | (529 | ) | $ | (36 | ) | $ | (493 | ) |
Six Months Ended June 30, 20181 | Nine Months Ended September 30, 20181 | |||||||||||||||||||||||||||||
$ in millions | Pre-tax Gain (Loss) | Income Tax Benefit (Provision) | After-tax Gain (Loss) | Non- controlling Interests | Net | Pre-tax Gain (Loss) | Income Tax Benefit (Provision) | After-tax Gain (Loss) | Non- controlling Interests | Net | Foreign currency translation adjustments | |||||||||||||||||||
OCI activity | $ | (8 | ) | $ | (67 | ) | $ | (75 | ) | $ | 14 | $ | (89 | ) | $ | (52 | ) | $ | (102 | ) | $ | (154 | ) | $ | (11 | ) | $ | (143 | ) | |
Reclassified to earnings | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||
Net OCI | $ | (8 | ) | $ | (67 | ) | $ | (75 | ) | $ | 14 | $ | (89 | ) | $ | (52 | ) | $ | (102 | ) | $ | (154 | ) | $ | (11 | ) | $ | (143 | ) | Change in net unrealized gains (losses) on AFS securities |
OCI activity | $ | (697 | ) | $ | 164 | $ | (533 | ) | $ | — | $ | (533 | ) | $ | (916 | ) | $ | 215 | $ | (701 | ) | $ | — | $ | (701 | ) | ||||
Reclassified to earnings | (3 | ) | — | (3 | ) | — | (3 | ) | (8 | ) | 2 | (6 | ) | — | (6 | ) | ||||||||||||||
Net OCI | $ | (700 | ) | $ | 164 | $ | (536 | ) | $ | — | $ | (536 | ) | $ | (924 | ) | $ | 217 | $ | (707 | ) | $ | — | $ | (707 | ) | Pension, postretirement and other | |||
OCI activity | $ | 2 | $ | — | $ | 2 | $ | — | $ | 2 | $ | 2 | $ | — | $ | 2 | $ | — | $ | 2 | ||||||||||
Reclassified to earnings | 12 | (3 | ) | 9 | — | 9 | 19 | (5 | ) | 14 | — | 14 | ||||||||||||||||||
Net OCI | $ | 14 | $ | (3 | ) | $ | 11 | $ | — | $ | 11 | $ | 21 | $ | (5 | ) | $ | 16 | $ | — | $ | 16 | Change in net DVA | |||||||
OCI activity | $ | 1,421 | $ | (345 | ) | $ | 1,076 | $ | 49 | $ | 1,027 | $ | 403 | $ | (97 | ) | $ | 306 | $ | 15 | $ | 291 | ||||||||
Reclassified to earnings | 18 | (4 | ) | 14 | — | 14 | 54 | (13 | ) | 41 | — | 41 | ||||||||||||||||||
Net OCI | $ | 1,439 | $ | (349 | ) | $ | 1,090 | $ | 49 | $ | 1,041 | $ | 457 | $ | (110 | ) | $ | 347 | $ | 15 | $ | 332 |
1. | Exclusive of cumulative adjustments related to the adoption of certain accounting updates. Refer to the following table |
Six Months Ended | Nine Months Ended | |||||
$ in millions | June 30, 2019 | September 30, 2019 | ||||
Leases | $ | 63 | $ | 63 |
Six Months Ended | Nine Months Ended | |||||
$ in millions | June 30, 2018 | September 30, 2018 | ||||
Revenues from contracts with customers2 | $ | (32 | ) | $ | (32 | ) |
Derivatives and hedging—targeted improvements to accounting for hedging activities2 | (99 | ) | (99 | ) | ||
Reclassification of certain tax effects from AOCI2 | 443 | 443 | ||||
Other3 | (6 | ) | (6 | ) | ||
Total | $ | 306 | $ | 306 |
1. | There were no cumulative adjustments to retained earnings related to the adoption of accounting updates for the three months ended |
2. | See Note 2 to the financial statements in the 2018 Form 10-K for further information. |
3. | Other includes the adoption of accounting updates related to Recognition and Measurement of Financial Assets and Financial Liabilities (other than the provision around presenting unrealized DVA in OCI, which the Firm early adopted in 2016) and Derecognition of Nonfinancial Assets. The impact of these adoptions on Retained earnings was not significant. |
Three Months Ended June 30, | Six Months Ended June 30, | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||
in millions, except for per share data | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||
Earnings applicable to Morgan Stanley common shareholders | $ | 2,031 | $ | 2,267 | $ | 4,367 | $ | 4,842 | $ | 2,060 | $ | 2,019 | $ | 6,427 | $ | 6,861 | ||||||||
Basic EPS | ||||||||||||||||||||||||
Weighted average common shares outstanding | 1,634 | 1,720 | 1,646 | 1,730 | 1,604 | 1,697 | 1,632 | 1,719 | ||||||||||||||||
Earnings per basic common share | $ | 1.24 | $ | 1.32 | $ | 2.65 | $ | 2.80 | $ | 1.28 | $ | 1.19 | $ | 3.94 | $ | 3.99 | ||||||||
Diluted EPS | ||||||||||||||||||||||||
Weighted average common shares outstanding | 1,634 | 1,720 | 1,646 | 1,730 | 1,604 | 1,697 | 1,632 | 1,719 | ||||||||||||||||
Effect of dilutive RSUs and PSUs | 21 | 28 | 20 | 30 | 23 | 30 | 21 | 30 | ||||||||||||||||
Weighted average common shares outstanding and common stock equivalents | 1,655 | 1,748 | 1,666 | 1,760 | 1,627 | 1,727 | 1,653 | 1,749 | ||||||||||||||||
Earnings per diluted common share | $ | 1.23 | $ | 1.30 | $ | 2.62 | $ | 2.75 | $ | 1.27 | $ | 1.17 | $ | 3.89 | $ | 3.92 | ||||||||
Weighted average antidilutive RSUs (excluded from the computation of diluted EPS) | — | 1 | 3 | 1 | — | 1 | 2 | 1 |
78 |
Notes to Consolidated Financial Statements (Unaudited) |
Three Months Ended June 30, | Six Months Ended June 30, | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||
$ in millions | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||
Interest income | ||||||||||||||||||||||||
Investment securities | $ | 509 | $ | 417 | $ | 984 | $ | 841 | $ | 579 | $ | 440 | $ | 1,563 | $ | 1,281 | ||||||||
Loans | 1,196 | 1,074 | 2,391 | 2,012 | 1,208 | 1,085 | 3,599 | 3,097 | ||||||||||||||||
Securities purchased under agreements to resell and Securities borrowed1 | 1,047 | 366 | 1,994 | 581 | 871 | 575 | 2,865 | 1,156 | ||||||||||||||||
Trading assets, net of Trading liabilities | 747 | 576 | 1,460 | 1,116 | 728 | 571 | 2,188 | 1,687 | ||||||||||||||||
Customer receivables and Other2 | 1,007 | 861 | 1,967 | 1,604 | 964 | 956 | 2,931 | 2,560 | ||||||||||||||||
Total interest income | $ | 4,506 | $ | 3,294 | $ | 8,796 | $ | 6,154 | $ | 4,350 | $ | 3,627 | $ | 13,146 | $ | 9,781 | ||||||||
Interest expense | ||||||||||||||||||||||||
Deposits | $ | 493 | $ | 273 | $ | 955 | $ | 432 | $ | 505 | $ | 377 | $ | 1,460 | $ | 809 | ||||||||
Borrowings | 1,342 | 1,258 | 2,722 | 2,396 | 1,219 | 1,287 | 3,941 | 3,683 | ||||||||||||||||
Securities sold under agreements to repurchase and Securities loaned3 | 735 | 446 | 1,335 | 848 | 681 | 478 | 2,016 | 1,326 | ||||||||||||||||
Customer payables and Other4 | 907 | 411 | 1,741 | 597 | 727 | 549 | 2,468 | 1,146 | ||||||||||||||||
Total interest expense | $ | 3,477 | $ | 2,388 | $ | 6,753 | $ | 4,273 | $ | 3,132 | $ | 2,691 | $ | 9,885 | $ | 6,964 | ||||||||
Net interest | $ | 1,029 | $ | 906 | $ | 2,043 | $ | 1,881 | $ | 1,218 | $ | 936 | $ | 3,261 | $ | 2,817 |
1. | Includes fees paid on Securities borrowed. |
2. | Includes interest from Customer receivables and Cash and cash equivalents. |
3. | Includes fees received on Securities loaned. |
4. | Includes fees received from prime brokerage customers for stock loan transactions entered into to cover customers’ short positions. |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
$ in millions | 2019 | 2018 | 2019 | 2018 | ||||||||
Recurring1 | $ | — | $ | — | $ | (127 | ) | $ | (164 | ) | ||
Intermittent | (89 | ) | (4 | ) | (190 | ) | (92 | ) |
79 | September 2019 Form 10-Q |
Notes to Consolidated Financial Statements (Unaudited) |
Three Months Ended June 30, 2019 | |||||||||||||||
$ in millions | IS | WM | IM | I/E | Total | ||||||||||
Investment banking1, 2 | $ | 1,472 | $ | 138 | $ | (1 | ) | $ | (19 | ) | $ | 1,590 | |||
Trading | 2,558 | 162 | (1 | ) | 13 | 2,732 | |||||||||
Investments | 194 | — | 247 | — | 441 | ||||||||||
Commissions and fees1 | 625 | 428 | — | (74 | ) | 979 | |||||||||
Asset management1 | 103 | 2,544 | 612 | (39 | ) | 3,220 | |||||||||
Other | 143 | 120 | (9 | ) | (1 | ) | 253 | ||||||||
Total non-interest revenues3, 4 | 5,095 | 3,392 | 848 | (120 | ) | 9,215 | |||||||||
Interest income | 3,289 | 1,348 | 6 | (137 | ) | 4,506 | |||||||||
Interest expense | 3,271 | 332 | 15 | (141 | ) | 3,477 | |||||||||
Net interest | 18 | 1,016 | (9 | ) | 4 | 1,029 | |||||||||
Net revenues | $ | 5,113 | $ | 4,408 | $ | 839 | $ | (116 | ) | $ | 10,244 | ||||
Income from continuing operations before income taxes | $ | 1,463 | $ | 1,243 | $ | 199 | $ | (2 | ) | $ | 2,903 | ||||
Provision for income taxes | 324 | 290 | 44 | (1 | ) | 657 | |||||||||
Income from continuing operations | 1,139 | 953 | 155 | (1 | ) | 2,246 | |||||||||
Net income | 1,139 | 953 | 155 | (1 | ) | 2,246 | |||||||||
Net income applicable to noncontrolling interests | 18 | — | 27 | — | 45 | ||||||||||
Net income applicable to Morgan Stanley | $ | 1,121 | $ | 953 | $ | 128 | $ | (1 | ) | $ | 2,201 |
Three Months Ended September 30, 2019 | |||||||||||||||
$ in millions | IS | WM | IM | I/E | Total | ||||||||||
Investment banking1 | $ | 1,535 | $ | 118 | $ | — | $ | (18 | ) | $ | 1,635 | ||||
Trading | 2,533 | 61 | 2 | 12 | 2,608 | ||||||||||
Investments | (18 | ) | — | 105 | — | 87 | |||||||||
Commissions and fees1 | 643 | 416 | 1 | (70 | ) | 990 | |||||||||
Asset management1 | 100 | 2,639 | 664 | (40 | ) | 3,363 | |||||||||
Other | 51 | 81 | — | (1 | ) | 131 | |||||||||
Total non-interest revenues | 4,844 | 3,315 | 772 | (117 | ) | 8,814 | |||||||||
Interest income | 3,112 | 1,378 | 4 | (144 | ) | 4,350 | |||||||||
Interest expense | 2,933 | 335 | 12 | (148 | ) | 3,132 | |||||||||
Net interest | 179 | 1,043 | (8 | ) | 4 | 1,218 | |||||||||
Net revenues | $ | 5,023 | $ | 4,358 | $ | 764 | $ | (113 | ) | $ | 10,032 | ||||
Income from continuing operations before income taxes | $ | 1,307 | $ | 1,238 | $ | 165 | $ | — | $ | 2,710 | |||||
Provision for income taxes | 189 | 276 | 27 | — | 492 | ||||||||||
Income from continuing operations | 1,118 | 962 | 138 | — | 2,218 | ||||||||||
Net income | 1,118 | 962 | 138 | — | 2,218 | ||||||||||
Net income applicable to noncontrolling interests | 45 | — | — | — | 45 | ||||||||||
Net income applicable to Morgan Stanley | $ | 1,073 | $ | 962 | $ | 138 | $ | — | $ | 2,173 |
Three Months Ended June 30, 2018 | |||||||||||||||
$ in millions | IS | WM | IM | I/E | Total | ||||||||||
Investment banking1, 2 | $ | 1,699 | $ | 114 | $ | — | $ | (20 | ) | $ | 1,793 | ||||
Trading | 3,128 | 135 | 16 | 14 | 3,293 | ||||||||||
Investments | 89 | 3 | 55 | — | 147 | ||||||||||
Commissions and fees1 | 674 | 442 | — | (77 | ) | 1,039 | |||||||||
Asset management1 | 102 | 2,514 | 610 | (37 | ) | 3,189 | |||||||||
Other | 168 | 74 | 3 | (2 | ) | 243 | |||||||||
Total non-interest revenues3, 4 | 5,860 | 3,282 | 684 | (122 | ) | 9,704 | |||||||||
Interest income | 2,195 | 1,320 | 17 | (238 | ) | 3,294 | |||||||||
Interest expense | 2,341 | 277 | 10 | (240 | ) | 2,388 | |||||||||
Net interest | (146 | ) | 1,043 | 7 | 2 | 906 | |||||||||
Net revenues | $ | 5,714 | $ | 4,325 | $ | 691 | $ | (120 | ) | $ | 10,610 | ||||
Income from continuing operations before income taxes | $ | 1,812 | $ | 1,157 | $ | 140 | $ | — | $ | 3,109 | |||||
Provision for income taxes | 323 | 281 | 36 | — | 640 | ||||||||||
Income from continuing operations | 1,489 | 876 | 104 | — | 2,469 | ||||||||||
Income (loss) from discontinued operations, net of income taxes | (2 | ) | — | — | — | (2 | ) | ||||||||
Net income | 1,487 | 876 | 104 | — | 2,467 | ||||||||||
Net income applicable to noncontrolling interests | 30 | — | — | — | 30 | ||||||||||
Net income applicable to Morgan Stanley | $ | 1,457 | $ | 876 | $ | 104 | $ | — | $ | 2,437 |
Six Months Ended June 30, 2019 | |||||||||||||||
$ in millions | IS | WM | IM | I/E | Total | ||||||||||
Investment banking1, 2 | $ | 2,623 | $ | 247 | $ | (1 | ) | $ | (37 | ) | $ | 2,832 | |||
Trading | 5,688 | 464 | (4 | ) | 25 | 6,173 | |||||||||
Investments | 275 | 1 | 438 | — | 714 | ||||||||||
Commissions and fees1 | 1,246 | 834 | — | (135 | ) | 1,945 | |||||||||
Asset management1 | 210 | 4,905 | 1,229 | (75 | ) | 6,269 | |||||||||
Other | 365 | 200 | (6 | ) | (5 | ) | 554 | ||||||||
Total non-interest revenues3, 4 | 10,407 | 6,651 | 1,656 | (227 | ) | 18,487 | |||||||||
Interest income | 6,345 | 2,761 | 10 | (320 | ) | 8,796 | |||||||||
Interest expense | 6,443 | 615 | 23 | (328 | ) | 6,753 | |||||||||
Net interest | (98 | ) | 2,146 | (13 | ) | 8 | 2,043 | ||||||||
Net revenues | $ | 10,309 | $ | 8,797 | $ | 1,643 | $ | (219 | ) | $ | 20,530 | ||||
Income from continuing operations before income taxes | $ | 3,058 | $ | 2,431 | $ | 373 | $ | (4 | ) | $ | 5,858 | ||||
Provision for income taxes | 514 | 554 | 77 | (1 | ) | 1,144 | |||||||||
Income from continuing operations | 2,544 | 1,877 | 296 | (3 | ) | 4,714 | |||||||||
Net income | 2,544 | 1,877 | 296 | (3 | ) | 4,714 | |||||||||
Net income applicable to noncontrolling interests | 52 | — | 32 | — | 84 | ||||||||||
Net income applicable to Morgan Stanley | $ | 2,492 | $ | 1,877 | $ | 264 | $ | (3 | ) | $ | 4,630 |
Six Months Ended June 30, 2018 | |||||||||||||||
$ in millions | IS | WM | IM | I/E | Total | ||||||||||
Investment banking1, 2 | $ | 3,212 | $ | 254 | $ | — | $ | (39 | ) | $ | 3,427 | ||||
Trading | 6,771 | 244 | 21 | 27 | 7,063 | ||||||||||
Investments | 138 | 3 | 132 | — | 273 | ||||||||||
Commissions and fees1 | 1,418 | 940 | — | (146 | ) | 2,212 | |||||||||
Asset management1 | 212 | 5,009 | 1,236 | (76 | ) | 6,381 | |||||||||
Other | 304 | 137 | 13 | (4 | ) | 450 | |||||||||
Total non-interest revenues3, 4 | 12,055 | 6,587 | 1,402 | (238 | ) | 19,806 | |||||||||
Interest income | 3,999 | 2,600 | 18 | (463 | ) | 6,154 | |||||||||
Interest expense | 4,240 | 488 | 11 | (466 | ) | 4,273 | |||||||||
Net interest | (241 | ) | 2,112 | 7 | 3 | 1,881 | |||||||||
Net revenues | $ | 11,814 | $ | 8,699 | $ | 1,409 | $ | (235 | ) | $ | 21,687 | ||||
Income from continuing operations before income taxes | $ | 3,924 | $ | 2,317 | $ | 288 | $ | — | $ | 6,529 | |||||
Provision for income taxes | 772 | 527 | 55 | — | 1,354 | ||||||||||
Income from continuing operations | 3,152 | 1,790 | 233 | — | 5,175 | ||||||||||
Income (loss) from discontinued operations, net of income taxes | (4 | ) | — | — | — | (4 | ) | ||||||||
Net income | 3,148 | 1,790 | 233 | — | 5,171 | ||||||||||
Net income applicable to noncontrolling interests | 64 | — | 2 | — | 66 | ||||||||||
Net income applicable to Morgan Stanley | $ | 3,084 | $ | 1,790 | $ | 231 | $ | — | $ | 5,105 |
Three Months Ended September 30, 2018 | |||||||||||||||
$ in millions | IS | WM | IM | I/E | Total | ||||||||||
Investment banking1 | $ | 1,459 | $ | 129 | $ | — | $ | (21 | ) | $ | 1,567 | ||||
Trading | 2,573 | 160 | 2 | 17 | 2,752 | ||||||||||
Investments | 96 | — | 40 | — | 136 | ||||||||||
Commissions and fees1 | 589 | 409 | — | (66 | ) | 932 | |||||||||
Asset management1 | 112 | 2,573 | 604 | (38 | ) | 3,251 | |||||||||
Other | 244 | 58 | (3 | ) | (1 | ) | 298 | ||||||||
Total non-interest revenues | 5,073 | 3,329 | 643 | (109 | ) | 8,936 | |||||||||
Interest income | 2,425 | 1,412 | 19 | (229 | ) | 3,627 | |||||||||
Interest expense | 2,569 | 342 | 9 | (229 | ) | 2,691 | |||||||||
Net interest | (144 | ) | 1,070 | 10 | — | 936 | |||||||||
Net revenues | $ | 4,929 | $ | 4,399 | $ | 653 | $ | (109 | ) | $ | 9,872 | ||||
Income from continuing operations before income taxes | $ | 1,556 | $ | 1,194 | $ | 102 | $ | (1 | ) | $ | 2,851 | ||||
Provision for income taxes | 397 | 281 | 18 | — | 696 | ||||||||||
Income from continuing operations | 1,159 | 913 | 84 | (1 | ) | 2,155 | |||||||||
Income (loss) from discontinued operations, net of income taxes | (3 | ) | — | 2 | — | (1 | ) | ||||||||
Net income | 1,156 | 913 | 86 | (1 | ) | 2,154 | |||||||||
Net income applicable to noncontrolling interests | 36 | — | 6 | — | 42 | ||||||||||
Net income applicable to Morgan Stanley | $ | 1,120 | $ | 913 | $ | 80 | $ | (1 | ) | $ | 2,112 |
80 |
Notes to Consolidated Financial Statements (Unaudited) |
Nine Months Ended September 30, 2019 | |||||||||||||||
$ in millions | IS | WM | IM | I/E | Total | ||||||||||
Investment banking1 | $ | 4,158 | $ | 365 | $ | (1 | ) | $ | (55 | ) | $ | 4,467 | |||
Trading | 8,221 | 525 | (2 | ) | 37 | 8,781 | |||||||||
Investments | 257 | 1 | 543 | — | 801 | ||||||||||
Commissions and fees1 | 1,889 | 1,250 | 1 | (205 | ) | 2,935 | |||||||||
Asset management1 | 310 | 7,544 | 1,893 | (115 | ) | 9,632 | |||||||||
Other | 416 | 281 | (6 | ) | (6 | ) | 685 | ||||||||
Total non-interest revenues | 15,251 | 9,966 | 2,428 | (344 | ) | 27,301 | |||||||||
Interest income | 9,457 | 4,139 | 14 | (464 | ) | 13,146 | |||||||||
Interest expense | 9,376 | 950 | 35 | (476 | ) | 9,885 | |||||||||
Net interest | 81 | 3,189 | (21 | ) | 12 | 3,261 | |||||||||
Net revenues | $ | 15,332 | $ | 13,155 | $ | 2,407 | $ | (332 | ) | $ | 30,562 | ||||
Income from continuing operations before income taxes | $ | 4,365 | $ | 3,669 | $ | 538 | $ | (4 | ) | $ | 8,568 | ||||
Provision for income taxes | 703 | 830 | 104 | (1 | ) | 1,636 | |||||||||
Income from continuing operations | 3,662 | 2,839 | 434 | (3 | ) | 6,932 | |||||||||
Net income | 3,662 | 2,839 | 434 | (3 | ) | 6,932 | |||||||||
Net income applicable to noncontrolling interests | 97 | — | 32 | — | 129 | ||||||||||
Net income applicable to Morgan Stanley | $ | 3,565 | $ | 2,839 | $ | 402 | $ | (3 | ) | $ | 6,803 |
Nine Months Ended September 30, 2018 | |||||||||||||||
$ in millions | IS | WM | IM | I/E | Total | ||||||||||
Investment banking1 | $ | 4,671 | $ | 383 | $ | — | $ | (60 | ) | $ | 4,994 | ||||
Trading | 9,344 | 404 | 23 | 44 | 9,815 | ||||||||||
Investments | 234 | 3 | 172 | — | 409 | ||||||||||
Commissions and fees1 | 2,007 | 1,349 | — | (212 | ) | 3,144 | |||||||||
Asset management1 | 324 | 7,582 | 1,840 | (114 | ) | 9,632 | |||||||||
Other | 548 | 195 | 10 | (5 | ) | 748 | |||||||||
Total non-interest revenues | 17,128 | 9,916 | 2,045 | (347 | ) | 28,742 | |||||||||
Interest income | 6,424 | 4,012 | 37 | (692 | ) | 9,781 | |||||||||
Interest expense | 6,809 | 830 | 20 | (695 | ) | 6,964 | |||||||||
Net interest | (385 | ) | 3,182 | 17 | 3 | 2,817 | |||||||||
Net revenues | $ | 16,743 | $ | 13,098 | $ | 2,062 | $ | (344 | ) | $ | 31,559 | ||||
Income from continuing operations before income taxes | $ | 5,480 | $ | 3,511 | $ | 390 | $ | (1 | ) | $ | 9,380 | ||||
Provision for income taxes | 1,169 | 808 | 73 | — | 2,050 | ||||||||||
Income from continuing operations | 4,311 | 2,703 | 317 | (1 | ) | 7,330 | |||||||||
Income (loss) from discontinued operations, net of income taxes | (7 | ) | — | 2 | — | (5 | ) | ||||||||
Net income | 4,304 | 2,703 | 319 | (1 | ) | 7,325 | |||||||||
Net income applicable to noncontrolling interests | 100 | — | 8 | — | 108 | ||||||||||
Net income applicable to Morgan Stanley | $ | 4,204 | $ | 2,703 | $ | 311 | $ | (1 | ) | $ | 7,217 |
1. | Approximately 85% of Investment Banking revenues in the current quarter, 90% in the current year period and approximately 85% of Investment banking revenues in the prior year periods were accounted for as Revenues from Contracts with Customers. In all periods presented, substantially all of Commissions and fees and Asset management revenues were accounted for under this guidance. |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
$ in millions | 2019 | 2018 | 2019 | 2018 | ||||||||
Advisory | $ | 550 | $ | 510 | $ | 1,462 | $ | 1,702 | ||||
Underwriting | 985 | 949 | 2,696 | 2,969 |
$ in millions | At June 30, 2019 | At December 31, 2018 | ||||
Institutional Securities | $ | 696,748 | $ | 646,427 | ||
Wealth Management1 | 189,811 | 202,392 | ||||
Investment Management | 5,400 | 4,712 | ||||
Total2 | $ | 891,959 | $ | 853,531 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
$ in millions | 2019 | 2018 | 2019 | 2018 | ||||||||
Interest rate | $ | 894 | $ | 744 | $ | 2,283 | $ | 2,396 | ||||
Foreign exchange | 69 | 223 | 383 | 622 | ||||||||
Equity security and index1 | 1,076 | 1,432 | 4,005 | 5,094 | ||||||||
Commodity and other | 300 | 254 | 986 | 1,047 | ||||||||
Credit | 269 | 99 | 1,124 | 656 | ||||||||
Total | $ | 2,608 | $ | 2,752 | $ | 8,781 | $ | 9,815 |
1. |
81 | September 2019 Form 10-Q |
Notes to (Unaudited) |
$ in millions | At June 30, 2019 | At December 31, 2018 | At September 30, 2019 | At December 31, 2018 | ||||||||
Net cumulative unrealized carried interest at risk of reversing | $ | 540 | $ | 434 | $ | 553 | $ | 434 |
Three Months Ended June 30, | Six Months Ended June 30, | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||
$ in millions | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||
Fee waivers | $ | 10 | $ | 16 | $ | 21 | $ | 34 | $ | 11 | $ | 11 | $ | 32 | $ | 45 |
Three Months Ended June 30, | Six Months Ended June 30, | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||
$ in millions | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||
Americas | $ | 7,526 | $ | 7,614 | $ | 14,847 | $ | 15,632 | $ | 7,489 | $ | 7,357 | $ | 22,336 | $ | 22,989 | ||||||||
EMEA | 1,576 | 1,829 | 3,278 | 3,537 | 1,409 | 1,355 | 4,687 | 4,892 | ||||||||||||||||
Asia | 1,142 | 1,167 | 2,405 | 2,518 | 1,134 | 1,160 | 3,539 | 3,678 | ||||||||||||||||
Total | $ | 10,244 | $ | 10,610 | $ | 20,530 | $ | 21,687 | $ | 10,032 | $ | 9,872 | $ | 30,562 | $ | 31,559 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||
$ in millions | 2019 | 2018 | 2019 | 2018 | ||||||||
Interest rate | $ | 604 | $ | 781 | $ | 1,389 | $ | 1,652 | ||||
Foreign exchange | 73 | 138 | 314 | 399 | ||||||||
Equity security and index1 | 1,478 | 1,785 | 2,929 | 3,661 | ||||||||
Commodity and other | 264 | 358 | 686 | 794 | ||||||||
Credit | 313 | 231 | 855 | 557 | ||||||||
Total | $ | 2,732 | $ | 3,293 | $ | 6,173 | $ | 7,063 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
$ in millions | 2019 | 2018 | 2019 | 2018 | ||||||||
Non-interest revenues | $ | 841 | $ | 804 | $ | 1,995 | $ | 2,192 |
At September 30, 2019 | ||||||||||
$ in millions | 2019 | 2020 | 2021 - 2025 | thereafter | ||||||
Non-interest revenues | $ | 57 | $ | 132 | $ 63 - $ 89 | $ | 239 |
$ in millions | At June 30, 2019 | At December 31, 2018 | At September 30, 2019 | At December 31, 2018 | ||||||||
Customer and other receivables | $ | 2,536 | $ | 2,308 | $ | 2,114 | $ | 2,308 |
$ in millions | At September 30, 2019 | At December 31, 2018 | ||||
Institutional Securities | $ | 703,868 | $ | 646,427 | ||
Wealth Management1 | 193,213 | 202,392 | ||||
Investment Management | 5,523 | 4,712 | ||||
Total2 | $ | 902,604 | $ | 853,531 |
The Firm acquired Solium Capital Inc. in the second quarter of |
Parent assets have been fully allocated to |
82 |
Three Months Ended June 30, | Three Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||||||||||||||||||||||||||||
$ in millions | Average Daily Balance | Interest | Annualized Average Rate | Average Daily Balance | Interest | Annualized Average Rate | Average Daily Balance | Interest | Annualized Average Rate | Average Daily Balance | Interest | Annualized Average Rate | ||||||||||||||||||||||||||||||
Interest earning assets | ||||||||||||||||||||||||||||||||||||||||||
Investment securities1 | $ | 99,634 | $ | 509 | 2.0 | % | $ | 79,502 | $ | 417 | 2.1 | % | $ | 104,700 | $ | 579 | 2.2 | % | $ | 82,594 | $ | 440 | 2.1 | % | ||||||||||||||||||
Loans1 | 118,091 | 1,196 | 4.1 | 111,939 | 1,074 | 3.8 | 122,320 | 1,208 | 3.9 | 110,592 | 1,085 | 3.9 | ||||||||||||||||||||||||||||||
Securities purchased under agreements to resell and Securities borrowed2: | ||||||||||||||||||||||||||||||||||||||||||
U.S. | 145,795 | 1,005 | 2.8 | 137,413 | 463 | 1.4 | 146,578 | 835 | 2.3 | 139,418 | 637 | 1.8 | ||||||||||||||||||||||||||||||
Non-U.S. | 76,144 | 42 | 0.2 | 90,114 | (97 | ) | (0.4 | ) | 76,871 | 36 | 0.2 | 89,825 | (62 | ) | (0.3 | ) | ||||||||||||||||||||||||||
Trading assets, net of Trading liabilities3: | ||||||||||||||||||||||||||||||||||||||||||
U.S. | 81,129 | 661 | 3.3 | 56,327 | 525 | 3.7 | 78,169 | 630 | 3.2 | 55,399 | 508 | 3.6 | ||||||||||||||||||||||||||||||
Non-U.S. | 12,749 | 86 | 2.7 | 7,926 | 51 | 2.6 | 17,104 | 98 | 2.3 | 8,637 | 63 | 2.9 | ||||||||||||||||||||||||||||||
Customer receivables and Other4: | ||||||||||||||||||||||||||||||||||||||||||
U.S. | 60,536 | 710 | 4.7 | 69,654 | 623 | 3.6 | 62,113 | 703 | 4.5 | 78,025 | 716 | 3.6 | ||||||||||||||||||||||||||||||
Non-U.S. | 60,807 | 297 | 2.0 | 55,130 | 238 | 1.7 | 60,073 | 261 | 1.7 | 56,770 | 240 | 1.7 | ||||||||||||||||||||||||||||||
Total | $ | 654,885 | $ | 4,506 | 2.8 | % | $ | 608,005 | $ | 3,294 | 2.2 | % | $ | 667,928 | $ | 4,350 | 2.6 | % | $ | 621,260 | $ | 3,627 | 2.3 | % | ||||||||||||||||||
Interest bearing liabilities | ||||||||||||||||||||||||||||||||||||||||||
Deposits1 | $ | 175,967 | $ | 493 | 1.1 | % | $ | 165,251 | $ | 273 | 0.7 | % | $ | 179,715 | $ | 505 | 1.1 | % | $ | 173,921 | $ | 377 | 0.9 | % | ||||||||||||||||||
Borrowings1, 5 | 192,518 | 1,342 | 2.8 | 192,122 | 1,258 | 2.6 | 196,777 | 1,219 | 2.5 | 191,606 | 1,287 | 2.7 | ||||||||||||||||||||||||||||||
Securities sold under agreements to repurchase and Securities loaned6: | ||||||||||||||||||||||||||||||||||||||||||
U.S. | 35,268 | 534 | 6.1 | 24,868 | 321 | 5.2 | 36,335 | 505 | 5.5 | 24,386 | 346 | 5.6 | ||||||||||||||||||||||||||||||
Non-U.S. | 31,342 | 201 | 2.6 | 39,536 | 125 | 1.3 | 30,111 | 176 | 2.3 | 34,960 | 132 | 1.5 | ||||||||||||||||||||||||||||||
Customer payables and Other7: | ||||||||||||||||||||||||||||||||||||||||||
U.S. | 124,119 | 585 | 1.9 | 121,968 | 208 | 0.7 | 121,800 | 448 | 1.5 | 120,958 | 321 | 1.1 | ||||||||||||||||||||||||||||||
Non-U.S. | 64,693 | 322 | 2.0 | 72,915 | 203 | 1.1 | 65,036 | 279 | 1.7 | 71,998 | 228 | 1.3 | ||||||||||||||||||||||||||||||
Total | $ | 623,907 | $ | 3,477 | 2.2 | % | $ | 616,660 | $ | 2,388 | 1.6 | % | $ | 629,774 | $ | 3,132 | 2.0 | % | $ | 617,829 | $ | 2,691 | 1.7 | % | ||||||||||||||||||
Net interest income and net interest rate spread | $ | 1,029 | 0.6 | % | $ | 906 | 0.6 | % | $ | 1,218 | 0.6 | % | $ | 936 | 0.6 | % |
83 |
Six Months Ended June 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||||||||||||||||||||||||||||
$ in millions | Average Daily Balance | Interest | Annualized Average Rate | Average Daily Balance | Interest | Annualized Average Rate | Average Daily Balance | Interest | Annualized Average Rate | Average Daily Balance | Interest | Annualized Average Rate | ||||||||||||||||||||||||||||||
Interest earning assets | ||||||||||||||||||||||||||||||||||||||||||
Investment securities1 | $ | 97,283 | $ | 984 | 2.0 | % | $ | 80,016 | $ | 841 | 2.1 | % | $ | 99,782 | $ | 1,563 | 2.1 | % | $ | 80,886 | $ | 1,281 | 2.1 | % | ||||||||||||||||||
Loans1 | 117,398 | 2,391 | 4.1 | 108,193 | 2,012 | 3.8 | 118,926 | 3,599 | 4.0 | 109,001 | 3,097 | 3.8 | ||||||||||||||||||||||||||||||
Securities purchased under agreements to resell and Securities borrowed2: | ||||||||||||||||||||||||||||||||||||||||||
U.S. | 143,119 | 1,939 | 2.7 | 130,611 | 772 | 1.2 | 144,686 | 2,774 | 2.6 | 133,208 | 1,410 | 1.4 | ||||||||||||||||||||||||||||||
Non-U.S. | 77,389 | 55 | 0.1 | 89,074 | (191 | ) | (0.4 | ) | 76,814 | 91 | 0.2 | 89,699 | (254 | ) | (0.4 | ) | ||||||||||||||||||||||||||
Trading assets, net of Trading liabilities3: | ||||||||||||||||||||||||||||||||||||||||||
U.S. | 77,646 | 1,292 | 3.4 | 55,089 | 1,012 | 3.7 | 77,434 | 1,922 | 3.3 | 55,162 | 1,520 | 3.7 | ||||||||||||||||||||||||||||||
Non-U.S. | 12,488 | 168 | 2.7 | 6,051 | 104 | 3.5 | 14,362 | 266 | 2.5 | 7,045 | 167 | 3.2 | ||||||||||||||||||||||||||||||
Customer receivables and Other4: | ||||||||||||||||||||||||||||||||||||||||||
U.S. | 61,756 | 1,407 | 4.6 | 71,734 | 1,165 | 3.3 | 61,479 | 2,110 | 4.6 | 73,792 | 1,880 | 3.4 | ||||||||||||||||||||||||||||||
Non-U.S. | 58,824 | 560 | 1.9 | 52,979 | 439 | 1.7 | 59,033 | 821 | 1.9 | 56,891 | 680 | 1.6 | ||||||||||||||||||||||||||||||
Total | $ | 645,903 | $ | 8,796 | 2.7 | % | $ | 593,747 | $ | 6,154 | 2.1 | % | $ | 652,516 | $ | 13,146 | 2.7 | % | $ | 605,684 | $ | 9,781 | 2.2 | % | ||||||||||||||||||
Interest bearing liabilities | ||||||||||||||||||||||||||||||||||||||||||
Deposits1 | $ | 178,478 | $ | 955 | 1.1 | % | $ | 162,607 | $ | 432 | 0.5 | % | $ | 178,894 | $ | 1,460 | 1.1 | % | $ | 166,384 | $ | 809 | 0.7 | % | ||||||||||||||||||
Borrowings1, 5 | 190,859 | 2,722 | 2.9 | 193,323 | 2,396 | 2.5 | 192,854 | 3,941 | 2.7 | 192,746 | 3,683 | 2.6 | ||||||||||||||||||||||||||||||
Securities sold under agreements to repurchase and Securities loaned6: | ||||||||||||||||||||||||||||||||||||||||||
U.S. | 31,192 | 984 | 6.4 | 24,948 | 607 | 4.9 | 32,479 | 1,489 | 6.1 | 24,871 | 952 | 5.1 | ||||||||||||||||||||||||||||||
Non-U.S. | 31,617 | 351 | 2.2 | 40,091 | 241 | 1.2 | 31,555 | 527 | 2.2 | 38,248 | 374 | 1.3 | ||||||||||||||||||||||||||||||
Customer payables and Other7: | ||||||||||||||||||||||||||||||||||||||||||
U.S. | 121,002 | 1,139 | 1.9 | 121,798 | 257 | 0.4 | 116,383 | 1,587 | 1.8 | 121,556 | 577 | 0.6 | ||||||||||||||||||||||||||||||
Non-U.S. | 65,076 | 602 | 1.9 | 71,210 | 340 | 1.0 | 65,331 | 881 | 1.8 | 71,382 | 569 | 1.1 | ||||||||||||||||||||||||||||||
Total | $ | 618,224 | $ | 6,753 | 2.2 | % | $ | 613,977 | $ | 4,273 | 1.4 | % | $ | 617,496 | $ | 9,885 | 2.1 | % | $ | 615,187 | $ | 6,964 | 1.5 | % | ||||||||||||||||||
Net interest income and net interest rate spread | $ | 2,043 | 0.5 | % | $ | 1,881 | 0.7 | % | $ | 3,261 | 0.6 | % | $ | 2,817 | 0.7 | % |
1. | Amounts include primarily U.S. balances. |
2. | Includes fees paid on Securities borrowed. |
3. | Excludes non-interest earning assets and non-interest bearing liabilities, such as equity securities. |
4. | Includes Cash and cash equivalents. Prior period amounts have been revised to conform to the current presentation. |
5. | Includes structured notes, whose interest expense is considered part of its value and therefore is recorded within Trading revenues. |
6. | Includes fees received on Securities loaned. The annualized average rate was calculated using (a) interest expense incurred on all securities sold under agreements to repurchase and securities loaned transactions, whether or not such transactions were reported in the balance sheets and (b) net average on-balance sheet balances, which exclude certain securities-for-securities transactions. |
7. | Includes fees received from prime brokerage customers for stock loan transactions entered into to cover customers’ short positions. |
84 |
Glossary of Common Acronyms |
2018 Form 10-K | Annual Report on Form 10-K for year ended December 31, 2018 filed with the SEC |
ABS | Asset-backed securities |
AFS | Available-for-sale |
AML | Anti-money laundering |
AOCI | Accumulated other comprehensive income (loss) |
AUM | Assets under management or supervision |
BEAT | Base erosion and anti-abuse tax |
BHC | Bank holding company |
bps | Basis points; one basis point equals 1/100th of 1% |
CCAR | Comprehensive Capital Analysis and Review |
CCyB | Countercyclical capital buffer |
CDO | Collateralized debt obligation(s), including Collateralized loan obligation(s) |
CDS | Credit default swaps |
CECL | Current expected credit loss |
CFTC | U.S. Commodity Futures Trading Commission |
CLN | Credit-linked note(s) |
CLO | Collateralized loan obligation(s) |
CMBS | Commercial mortgage-backed securities |
CMO | Collateralized mortgage obligation(s) |
CVA | Credit valuation adjustment |
DVA | Debt valuation adjustment |
EBITDA | Earnings before interest, taxes, depreciation and amortization |
ELN | Equity-linked note(s) |
EMEA | Europe, Middle East and Africa |
EPS | Earnings per common share |
E.U. | European Union |
FDIC | Federal Deposit Insurance Corporation |
FFELP | Federal Family Education Loan Program |
FFIEC | Federal Financial Institutions Examination Council |
FHC | Financial Holding Company |
FICC | Fixed Income Clearing Corporation |
FICO | Fair Isaac Corporation |
FVA | Funding valuation adjustment |
GILTI | Global Intangible Low-Taxed Income |
GLR | Global liquidity reserve |
G-SIB | Global systemically important banks |
HELOC | Home Equity Line of Credit |
HQLA | High-quality liquid assets |
HTM | Held-to-maturity |
I/E | Intersegment eliminations |
IHC | Intermediate holding company |
IM | Investment Management |
IRS | Internal Revenue Service |
IS | Institutional Securities |
LCR | Liquidity coverage ratio, as adopted by the U.S. banking agencies |
LIBOR | London Interbank Offered Rate |
M&A | Merger, acquisition and restructuring transaction |
MSBNA | Morgan Stanley Bank, N.A. |
MS&Co. | Morgan Stanley & Co. LLC |
MSIP | Morgan Stanley & Co. International plc |
MSMS | Morgan Stanley MUFG Securities Co., Ltd. |
MSPBNA | Morgan Stanley Private Bank, National Association |
MSSB LLC | Morgan Stanley Smith Barney LLC |
MUFG | Mitsubishi UFJ Financial Group, Inc. |
85 |
Glossary of Common Acronyms |
MUMSS | Mitsubishi UFJ Morgan Stanley Securities Co., Ltd. |
MWh | Megawatt hour |
N/A | Not Applicable |
NAV | Net asset value |
N/M | Not Meaningful |
Non-GAAP | Non-generally accepted accounting principles |
NSFR | Net stable funding ratio, as proposed by the U.S. banking agencies |
OCC | Office of the Comptroller of the Currency |
OCI | Other comprehensive income (loss) |
OIS | Overnight index swap |
OTC | Over-the-counter |
PRA | Prudential Regulation Authority |
PSU | Performance-based stock unit |
RMBS | Residential mortgage-backed securities |
ROE | Return on average common equity |
ROTCE | Return on average tangible common equity |
ROU | Right-of-use |
RSU | Restricted stock unit |
RWA | Risk-weighted assets |
SEC | U.S. Securities and Exchange Commission |
SLR | Supplementary leverage ratio |
S&P | Standard & Poor’s |
SPE | Special purpose entity |
SPOE | Single point of entry |
TDR | Troubled debt restructuring |
TLAC | Total loss-absorbing capacity |
U.K. | United Kingdom |
UPB | Unpaid principal balance |
U.S. | United States of America |
U.S. DOL | U.S. Department of Labor |
U.S. GAAP | Accounting principles generally accepted in the United States of America |
VaR | Value-at-Risk |
VAT | Value-added tax |
VIE | Variable interest entity |
WACC | Implied weighted average cost of capital |
WM | Wealth Management |
86 |
$ in millions, except per share data | Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs1 | Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs | ||||||
Month #1 (April 1, 2019—April 30, 2019) | ||||||||||
Share Repurchase Program2 | 3,386,400 | $ | 47.43 | 3,386,400 | $ | 1,019 | ||||
Employee transactions3 | 1,083,981 | $ | 46.46 | — | — | |||||
Month #2 (May 1, 2019—May 31, 2019) | ||||||||||
Share Repurchase Program2 | 9,351,100 | $ | 45.25 | 9,351,100 | $ | 596 | ||||
Employee transactions3 | 758,008 | $ | 44.04 | — | — | |||||
Month #3 (June 1, 2019—June 30, 2019) | ||||||||||
Share Repurchase Program2 | 13,758,849 | $ | 43.34 | 13,758,849 | $ | — | ||||
Employee transactions3 | 12,382 | $ | 41.07 | — | — | |||||
Three Months Ended June 30, 2019 | ||||||||||
Share Repurchase Program2 | 26,496,349 | $ | 44.53 | 26,496,349 | $ | — | ||||
Employee transactions3 | 1,854,371 | $ | 45.44 | — | — |
$ in millions, except per share data | Total Number of Shares Purchased1 | Average Price Paid Per Share | Total Shares Purchased as Part of Share Repurchase Program2,3 | Dollar Value of Remaining Authorized Repurchase | ||||||
July | 6,671,014 | $ | 44.95 | 5,885,400 | $ | 5,735 | ||||
August | 15,912,294 | $ | 40.75 | 15,892,000 | $ | 5,087 | ||||
September | 14,026,315 | $ | 41.95 | 14,003,465 | $ | 4,500 | ||||
Total | 36,609,623 | $ | 41.98 | 35,780,865 |
1. | Includes 828,758 shares acquired by the Firm in satisfaction of the tax withholding obligations on stock-based awards granted under the Firm’s stock-based compensation plans during the three months ended September 30, 2019. |
2. | Share purchases under publicly announced programs are made pursuant to open-market purchases, Rule 10b5-1 plans or privately negotiated transactions (including with employee benefit plans) as market conditions warrant and at prices the Firm deems appropriate and may be suspended at any time. On April 18, 2018, the Firm entered into a sales plan with Mitsubishi UFJ Financial Group, Inc. (“MUFG”). See Note 14 to the financial statements for further information on the sales plan. |
The Firm’s Board of Directors has authorized the repurchase of the Firm’s outstanding stock under a share repurchase program (the “Share Repurchase Program”). The Share Repurchase Program is a program for capital management purposes that considers, among other things, business segment capital needs, as well as equity-based compensation and benefit plan requirements. The Share Repurchase Program has no set expiration or termination date. |
Exhibit No. | Description | |
15 | ||
31.1 | ||
31.2 | ||
32.1 | ||
32.2 | ||
101 | Interactive | |
104 | Cover Page Interactive Data File (formatted in Inline XBRL and |
MORGAN STANLEY (Registrant) | |
By: | /s/ JONATHAN PRUZAN |
Jonathan Pruzan Executive Vice President and Chief Financial Officer | |
By: | /s/ PAUL C. WIRTH |
Paul C. Wirth Deputy Chief Financial Officer |