0000895421us-gaap:~~OtherComprehensiveIncomeMemberms:LoansAndOtherReceivablesMember2021-01-012021-03-31~~NotDesignatedAsHedgingInstrumentTradingMemberus-gaap:ForeignExchangeContractMember2023-03-31


~~Table of Contents~~

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, ~~2022~~2023

Commission File Number 1-11758

(Exact name of Registrant as specified in its charter)

Delaware

1585 Broadway

36-3145972

(212)

761-4000

(State or other jurisdiction of

incorporation or organization)

New York,

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 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
Depositary Shares, each representing 1/1,000th interest in a share of 4.875%	MS/PL	New York Stock Exchange
Non-Cumulative Preferred Stock, Series L, $0.01 par value
Depositary Shares, each representing 1/1,000th interest in a share of 4.250%	MS/PO	New York Stock Exchange
Non-Cumulative Preferred Stock, Series O, $0.01 par value
Depositary Shares, each representing 1/1,000th interest in a share of 6.500%	MS/PP	New York Stock Exchange
Non-Cumulative Preferred Stock, Series P, $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)
Global Medium-Term Notes, Series A, Floating Rate Notes Due 2029	MS/29	New York Stock Exchange
of Morgan Stanley Finance LLC (and Registrant’s guarantee with respect thereto)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of April ~~29, 2022,~~28, 2023, there were ~~1,749,284,059~~1,670,113,691 shares of the Registrant’s Common Stock, par value $0.01 per share, outstanding.


Table of Contents

QUARTERLY REPORT ON FORM 10-Q

For the quarter ended March 31, ~~2022~~2023


Table of Contents	Table of Contents		Part	Item	Page	Table of Contents		Part	Item	Page
Financial Information	Financial Information		I			Financial Information		I
Management’s Discussion and Analysis of Financial Condition and Results of Operations	Management’s Discussion and Analysis of Financial Condition and Results of Operations		I	2	1	Management’s Discussion and Analysis of Financial Condition and Results of Operations		I	2	1
Introduction	Introduction				1	Introduction				1
Executive Summary	Executive Summary				2	Executive Summary				2
Business Segments	Business Segments				6	Business Segments				6
Institutional Securities	Institutional Securities				7	Institutional Securities				7
Wealth Management	Wealth Management				9	Wealth Management				9
Investment Management	Investment Management				11	Investment Management				11
Supplemental Financial Information	Supplemental Financial Information				13	Supplemental Financial Information				13
Accounting Development Updates	Accounting Development Updates				13	Accounting Development Updates				13
Critical Accounting Policies					13
Critical Accounting Estimates						Critical Accounting Estimates				13
Liquidity and Capital Resources	Liquidity and Capital Resources				13	Liquidity and Capital Resources				13
Balance Sheet	Balance Sheet				14	Balance Sheet				14
Regulatory Requirements	Regulatory Requirements				17	Regulatory Requirements				17
Quantitative and Qualitative Disclosures about Risk	Quantitative and Qualitative Disclosures about Risk		I	3	23	Quantitative and Qualitative Disclosures about Risk		I	3	23
Market Risk	Market Risk				23	Market Risk				23
Credit Risk	Credit Risk				25	Credit Risk				25
Country and Other Risks	Country and Other Risks				29	Country and Other Risks				30
Report of Independent Registered Public Accounting Firm	Report of Independent Registered Public Accounting Firm				31	Report of Independent Registered Public Accounting Firm				32
Consolidated Financial Statements and Notes	Consolidated Financial Statements and Notes		I	1	32	Consolidated Financial Statements and Notes		I	1	33
Consolidated Income Statement (Unaudited)	Consolidated Income Statement (Unaudited)				32	Consolidated Income Statement (Unaudited)				33
Consolidated Comprehensive Income Statement (Unaudited)	Consolidated Comprehensive Income Statement (Unaudited)				32	Consolidated Comprehensive Income Statement (Unaudited)				33
Consolidated Balance Sheet (Unaudited at March 31, 2022)					33
Consolidated Balance Sheet (Unaudited at March 31, 2023)						Consolidated Balance Sheet (Unaudited at March 31, 2023)				34
Consolidated Statement of Changes in Total Equity (Unaudited)	Consolidated Statement of Changes in Total Equity (Unaudited)				34	Consolidated Statement of Changes in Total Equity (Unaudited)				35
Consolidated Cash Flow Statement (Unaudited)	Consolidated Cash Flow Statement (Unaudited)				35	Consolidated Cash Flow Statement (Unaudited)				36
Notes to Consolidated Financial Statements (Unaudited)	Notes to Consolidated Financial Statements (Unaudited)				36	Notes to Consolidated Financial Statements (Unaudited)				37
1.	1.	Introduction and Basis of Presentation			36	1.	Introduction and Basis of Presentation			37
2.	2.	Significant Accounting Policies			37	2.	Significant Accounting Policies			37
3.	3.	Cash and Cash Equivalents			37	3.	Cash and Cash Equivalents			38
4.	4.	Fair Values			37	4.	Fair Values			38
5.	5.	Fair Value Option			43	5.	Fair Value Option			44
6.	6.	Derivative Instruments and Hedging Activities			43	6.	Derivative Instruments and Hedging Activities			45
7.	7.	Investment Securities			47	7.	Investment Securities			48
8.	8.	Collateralized Transactions			48	8.	Collateralized Transactions			50
9.	9.	Loans, Lending Commitments and Related Allowance for Credit Losses			50	9.	Loans, Lending Commitments and Related Allowance for Credit Losses			52
10.	10.	Other Assets—Equity Method Investments			52	10.	Other Assets—Equity Method Investments			54
11.	11.	Deposits			53	11.	Deposits			55
12.	12.	Borrowings and Other Secured Financings			53	12.	Borrowings and Other Secured Financings			55
13.	13.	Commitments, Guarantees and Contingencies			53	13.	Commitments, Guarantees and Contingencies			55
14.	14.	Variable Interest Entities and Securitization Activities			55	14.	Variable Interest Entities and Securitization Activities			57
15.	15.	Regulatory Requirements			57	15.	Regulatory Requirements			60
16.	16.	Total Equity			59	16.	Total Equity			62
17.	17.	Interest Income and Interest Expense			61	17.	Interest Income and Interest Expense			63
18.	18.	Income Taxes			61	18.	Income Taxes			63
19.	19.	Segment, Geographic and Revenue Information			61	19.	Segment, Geographic and Revenue Information			64
Financial Data Supplement (Unaudited)	Financial Data Supplement (Unaudited)				64	Financial Data Supplement (Unaudited)				66
Glossary of Common Terms and Acronyms	Glossary of Common Terms and Acronyms				65	Glossary of Common Terms and Acronyms				67
Controls and Procedures	Controls and Procedures		I	4	66	Controls and Procedures		I	4	68
Other Information	Other Information		II			Other Information		II
Legal Proceedings	Legal Proceedings		II	1	66	Legal Proceedings		II	1	68
Risk Factors	Risk Factors		II	1A	66	Risk Factors		II	1A	68
Unregistered Sales of Equity Securities and Use of Proceeds	Unregistered Sales of Equity Securities and Use of Proceeds		II	2	66	Unregistered Sales of Equity Securities and Use of Proceeds		II	2	68
Other Information	Other Information		II	5	66	Other Information		II	5	69
Exhibits	Exhibits		II	6	67	Exhibits		II	6	69
Signatures	Signatures				67	Signatures				69


			i


Table of Contents

Available Information

We file annual, quarterly and current reports, proxy statements and other information with the SEC. The SEC maintains a website, www.sec.gov, that contains annual, quarterly and current reports, proxy and information statements, and other information that issuers file electronically with the SEC. Our electronic SEC filings are available to the public at the SEC’s website.

Our website is www.morganstanley.com. You can access our Investor Relations webpage at www.morganstanley.com/about-us-ir. We make available free of charge, on or through our Investor Relations webpage, our proxy statements, annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to those reports filed or furnished pursuant to the Securities Exchange Act of 1934, as amended (“Exchange Act”), as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC. We also make available, through our Investor Relations webpage, via a link to the SEC’s website, statements of beneficial ownership of our equity securities filed by our directors, officers, 10% or greater shareholders and others under Section 16 of the Exchange Act.

You can access information about our corporate governance at www.morganstanley.com/about-us-governance, our sustainability initiatives at www.morganstanley.com/about-us/sustainability-at-morgan-stanley, and our commitment to diversity and inclusion at www.morganstanley.com/about-us/diversity. Our webpages include:

•Amended and Restated Certificate of Incorporation;

•Amended and Restated Bylaws;

•Charters for our Audit Committee, Compensation, Management Development and Succession Committee, ~~Nominating~~Governance and ~~Governance~~Sustainability Committee, Operations and Technology Committee, and Risk Committee;

•Corporate Governance Policies;

•Policy Regarding Corporate Political Activities;

•Policy Regarding Shareholder Rights Plan;

•Equity Ownership Commitment;

•Code of Ethics and Business Conduct;

•Code of Conduct;

•Integrity Hotline Information;

•Environmental and Social Policies;

•Sustainability Report;

•~~Task Force on Climate-related Financial Disclosures~~Climate Report; and

•Diversity and Inclusion Report.

Our Code of Ethics and Business Conduct applies to all directors, officers and employees, including our Chief Executive Officer, Chief Financial Officer and Deputy Chief Financial Officer. We will post any amendments to the Code of Ethics and Business Conduct and any waivers that are required to be disclosed by the rules of either the SEC or the New York Stock Exchange LLC (“NYSE”) on our website. You can request a copy of these documents, excluding exhibits, at no cost, by contacting Investor Relations, 1585 Broadway, New York, NY 10036 (212-761-4000). The information on our website is not incorporated by reference into this report.


			ii


Table of Contents

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Introduction

Morgan Stanley is a global financial services firm that maintains significant market positions in each of its business segments—Institutional Securities, Wealth Management and Investment Management. Morgan Stanley, through its subsidiaries and affiliates, provides a wide variety of products and services to a large and diversified group of clients and customers, including corporations, governments, financial institutions and individuals. Unless the context otherwise requires, the terms “Morgan Stanley,” “Firm,” “us,” “we” or “our” mean Morgan Stanley (the “Parent Company”) together with its consolidated subsidiaries. ~~Disclosures reflect the effects of the acquisition of Eaton Vance Corp. (“Eaton Vance”) prospectively from the March 1, 2021 acquisition date.~~ See the “Glossary of Common Terms and Acronyms” for the definition of certain terms and acronyms used throughout this Form 10-Q.

A description of the clients and principal products and services of each of our business segments is as follows:

Institutional Securities provides a variety of products and services to corporations, governments, financial institutions and ultra-high net worth clients. Investment Banking services consist of capital raising and financial advisory services, including the underwriting of debt, equity and other securities, as well as advice on mergers and acquisitions, restructurings and project finance. Our Equity and Fixed Income businesses include sales, financing, prime brokerage, market-making, Asia wealth management services and certain business-related investments. Lending activities include originating corporate loans and commercial real estate loans, providing secured lending facilities, and extending securities-based and other financing to customers. Other activities include research.

Wealth Management provides a comprehensive array of financial services and solutions to individual investors and small to medium-sized businesses and institutions covering: financial advisor-led brokerage, custody, administrative and investment advisory services; self-directed brokerage services; financial and wealth planning services; workplace services, including stock plan administration; ~~annuity and insurance products;~~ securities-based lending, residential real estate loans and other lending products; banking; and retirement plan services.

Investment Management provides a broad range of investment strategies and products that span geographies, asset classes, and public and private markets to a diverse group of clients across institutional and intermediary channels. Strategies and products, which are offered through a variety of investment vehicles, include equity, fixed income, alternatives and solutions, and liquidity and overlay services. Institutional clients include defined benefit/defined contribution plans, foundations, endowments, government entities, sovereign wealth funds, insurance companies, third-party fund sponsors and corporations. Individual clients are generally served through intermediaries, including affiliated and non-affiliated distributors.

Management’s Discussion and Analysis includes certain metrics that we believe to be useful to us, investors, analysts and other stakeholders by providing further transparency about, or an additional means of assessing, our financial condition and operating results. Such metrics, when used, are defined and may be different from or inconsistent with metrics used by other companies.

The results of operations in the past have been, and in the future may continue to be, materially affected by: competition; risk factors; legislative, legal and regulatory developments; and other factors. These factors also may have an adverse impact on our ability to achieve our strategic objectives. Additionally, the discussion of our results of operations herein may contain forward-looking statements. These statements, which reflect management’s beliefs and expectations, are subject to risks and uncertainties that may cause actual results to differ materially. For a discussion of the risks and uncertainties that may affect our future results, see “Forward-Looking Statements,” “Business—Competition,” “Business—Supervision and Regulation,” ~~and~~ “Risk Factors” in the ~~2021~~2022 Form 10-K .and “Liquidity and Capital Resources—Regulatory Requirements” herein.


March ~~2022~~2023 Form 10-Q			1


Table of Contents
Management’s Discussion and Analysis

Executive Summary

Overview of Financial Results

Consolidated Results—Three Months Ended March 31, ~~2022~~2023

•The Firm ~~delivered quarterly~~reported net revenues of ~~$14.8~~$14.5 billion ~~on continued strong performance~~ and ~~contributions across~~net income of $3.0 billion as our ~~businesses.~~

•~~The Firm delivered an ROTCE of 19.8% in~~businesses navigated a volatile ~~and uncertain~~ market environment.

•The Firm ~~maintained~~delivered ROTCE of 16.9% (see “Selected Non-GAAP Financial Information” herein).

•The Firm’s expense ~~discipline and delivered an~~ efficiency ratio was 72%. Expenses for the quarter include integration-related expenses of ~~69% while continuing to invest in our businesses.~~$77 million.

•At March 31, ~~2022, our standardized~~2023, the Firm’s Standardized Common Equity Tier 1 capital ratio was ~~14.5%~~15.1%.

•Institutional Securities ~~Net~~net revenues of ~~$7.7~~$6.8 billion reflect strong performance in Equity and Fixed ~~income on continued strong client engagement~~Income despite a less favorable market environment compared to a year ago and lower results in ~~volatile markets and in Advisory on higher completed M&A transactions.~~Investment Banking.

•Wealth Management net revenues were $6.6 billion, positively impacted by mark-to-market gains on investments associated with certain employee deferred compensation plans compared to losses a year ago. The business delivered a pre-tax margin of ~~26.5% or 27.8% excluding integration-related expenses (see “Selected Non-GAAP Financial Information” herein)~~26.1%. Results reflect higher ~~asset management fees and continued growth~~net interest income versus prior year, primarily driven by higher interest rates, even as clients continue to redeploy sweep deposits. These results were partially offset by an increase in ~~bank lending. The business added~~expenses as well as higher provisions for credit losses.

•Wealth Management attracted significant net new assets of ~~$142~~$110 billion ~~including an asset acquisition.~~during the quarter.

•Investment Management results reflect ~~incremental fee-based Asset management~~net revenues ~~and higher average~~of $1.3 billion on AUM asof $1.4 trillion amid declines in asset values from a ~~result of the acquisition of Eaton Vance.~~year ago.

Net Revenues

($ in millions)

Net Income Applicable to Morgan Stanley

($ in millions)

Earnings per Diluted Common Share1

1.~~Adjusted Diluted EPS was $2.06 for the current quarter and $2.22 for the prior year quarter (see “Selected Non-GAAP Financial Information” herein for further information).~~ 8796093245585

We reported net revenues of $14.5 billion in the quarter ended March 31, 2023 (“current quarter,” or “1Q 2023”) compared with $14.8 billion in the quarter ended March 31, 2022 (“~~current quarter,” or “1Q 2022”) compared with $15.7 billion in the quarter ended March 31, 2021 (“~~prior year quarter,” or “1Q ~~2021”~~2022”). For the current quarter, net income applicable to Morgan Stanley was ~~$3.7~~$3.0 billion, or ~~$2.02~~$1.70 per diluted common share, compared with ~~$4.1~~$3.7 billion, or ~~$2.19~~$2.02 per diluted common share in the prior year quarter.


			2			March ~~2022~~2023 Form 10-Q


Table of Contents
Management’s Discussion and Analysis

Non-interest Expenses1

($ in millions)

1.The percentages on the bars in the chart represent the contribution of compensation and benefits expenses and non-compensation expenses to the total.

•Compensation and benefits expenses of ~~$6,274~~$6,410 million in the current quarter ~~decreased 8%~~increased 2% from the prior year quarter, primarily ~~as a result of lower~~due to higher expenses related to certain deferred cash-based compensation plans linked to investment performance, ~~and~~higher stock-based compensation expense driven by the Firm’s share price, and higher salary expenses driven in part by the impact of higher headcount, partially offset by lower discretionary incentive compensation ~~partially offset by higher salaries~~on lower revenues and ~~an increase due to~~a decrease in the formulaic payout to Wealth Management ~~representatives.~~representatives driven by lower compensable revenues.

•Non-compensation expenses of ~~$3,882~~$4,113 million in the current quarter increased 6% from the prior year quarter, primarily ~~driven by incremental expenses as a result of the Eaton Vance acquisition, increased investments in~~due to higher spend on technology, higher marketing and business development costs and higher ~~litigation expenses, partially offset by lower brokerage and clearing costs.~~legal expenses.

Provision for Credit Losses

The Provision for credit losses on loans and lending commitments of ~~$57~~$234 million in the current quarter was primarily ~~due~~related to ~~portfolio growth~~. a deterioration in both the macroeconomic outlook and our expectations of commercial real estate borrowers. The Provision for credit losses on loans and lending commitments in the prior year quarter was ~~a net release of $98~~$57 million, primarily driven by ~~improvements in the outlook for macroeconomic conditions and the impact of paydowns on Corporate loans, including by lower-rated borrowers.~~portfolio growth.

For further information on the Provision for credit losses, see “Credit Risk” herein.

Income Taxes

The ~~Firm’s~~ effective tax rate of ~~19.0% is lower than~~19.3% for the current quarter was substantially similar to the prior year quarter, ~~due to higher benefits related to the conversion of~~both periods reflecting a benefit associated with employee share-based awards, which primarily ~~occur~~settled in the first quarter of each year.

Business Segment Results

Net Revenues by Segment1

($ in millions)

Net Income Applicable to Morgan Stanley by Segment1

($ in millions)

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 sum to 100% due to intersegment eliminations. See Note 19 to the financial statements for details of intersegment eliminations.

•Institutional Securities net revenues of ~~$7,657~~$6,797 million in the current quarter decreased 11% from the elevated levels in the prior year quarter, primarily reflecting lower ~~underwriting revenues,~~results from Equity, Investment Banking and Fixed income, partially offset by higher ~~Advisory and Equity business~~other net revenues.

•Wealth Management net revenues of ~~$5,935~~$6,559 million in the current quarter ~~were relatively unchanged~~increased 11% from the prior year quarter, primarily reflecting ~~lower Transactional~~gains on investments associated with certain employee deferred cash-based compensation plans compared with losses in the prior year quarter and higher Net interest revenues, partially offset by ~~higher~~lower Asset management revenues ~~and Net interest.~~driven by lower fee-based asset levels in the current quarter resulting from lower market levels, partially offset by the impact of positive fee-based flows.

•Investment Management net revenues of ~~$1,335~~$1,289 million in the current quarter ~~increased 2%~~decreased 3% from the prior year quarter, ~~primarily~~reflecting lower AUM due to ~~higher Asset management~~the decline in asset values and ~~related fees due to incremental revenues related to~~cumulative outflows over the ~~Eaton Vance acquisition,~~prior year, partially offset by ~~lower~~higher Performance-based income and other revenues.


March ~~2022~~2023 Form 10-Q			3


Table of Contents
Management’s Discussion and Analysis

Net Revenues by Region1, 2

($ in millions)

1.The percentages on the bars in the charts represent the contribution of each region to the total.

2.For a discussion of how the geographic breakdown of net revenues is determined, see Note 23 to the financial statements in the ~~2021~~2022 Form 10-K.

Americas net revenues in the current quarter ~~decreased 6%~~increased 3% from the prior year quarter, primarily driven by ~~decreases in the Investment banking and Fixed income businesses~~results within the ~~Institutional securities~~Wealth Management business segment, partially offset by ~~increases~~Equity results within the ~~Investment Management~~Institutional Securities business segment. EMEA net revenues ~~increased 7%~~decreased 25% from the prior year quarter, primarily driven by ~~increases in the~~ Fixed income, Investment banking and Equity ~~businesses~~results within the Institutional Securities business segment. Asia net revenues ~~decreased 14% from~~in the current quarter continued to reflect the strong levels in the prior year ~~quarter, primarily driven by the Investment Management business segment.~~quarter.

Selected Financial Information and Other Statistical Data


		Three Months Ended March 31,								Three Months Ended March 31,
$ in millions	$ in millions		2022			2021			$ in millions		2023			2022
Consolidated results	Consolidated results								Consolidated results
Net revenues	Net revenues		$	14,801		$	15,719		Net revenues		$	14,517		$	14,801
Earnings applicable to Morgan Stanley common shareholders	Earnings applicable to Morgan Stanley common shareholders		$	3,542		$	3,982		Earnings applicable to Morgan Stanley common shareholders		$	2,836		$	3,542
Earnings per diluted common share	Earnings per diluted common share		$	2.02		$	2.19		Earnings per diluted common share		$	1.70		$	2.02
Consolidated financial measures	Consolidated financial measures		Consolidated financial measures
Expense efficiency ratio1	Expense efficiency ratio1		69		%	67		%	Expense efficiency ratio1		72		%	69		%
Adjusted expense efficiency ratio1, 2			68		%	66		%
ROE3			14.7		%	16.9		%
Adjusted ROE2, 3			15.0		%	17.1		%

ROE2									ROE2		12.4		%	14.7		%

ROTCE2, 3	ROTCE2, 3		19.8		%	21.1		%	ROTCE2, 3		16.9		%	19.8		%
Adjusted ROTCE2, 3			20.3		%	21.4		%

Pre-tax margin4	Pre-tax margin4		31		%	34		%	Pre-tax margin4		26		%	31		%
Effective tax rate	Effective tax rate		19.0		%	22.0		%	Effective tax rate		19.3		%	19.0		%
Pre-tax margin by segment4	Pre-tax margin by segment4		Pre-tax margin by segment4
Institutional Securities	Institutional Securities		36		%	39		%	Institutional Securities		28		%	36		%
Wealth Management	Wealth Management		27		%	27		%	Wealth Management		26		%	27		%
Wealth Management, adjusted2			28		%	28		%

Investment Management	Investment Management		17		%	28		%	Investment Management		13		%	17		%
Investment Management, adjusted2			19		%	29		%


in millions, except per share and employee data	in millions, except per share and employee data	At March 31, 2022			At December 31, 2021			in millions, except per share and employee data	At March 31, 2023			At December 31, 2022
Liquidity resources5		$	323,227		$	356,003
Average liquidity resources for three months ended5								Average liquidity resources for three months ended5	$	321,195		$	312,250
Loans6	Loans6	$	208,750		$	200,761		Loans6	$	222,727		$	222,182
Total assets	Total assets	$	1,222,233		$	1,188,140		Total assets	$	1,199,904		$	1,180,231
Deposits	Deposits	$	360,840		$	347,574		Deposits	$	347,523		$	356,646
Borrowings	Borrowings	$	229,817		$	233,127		Borrowings	$	250,182		$	238,058
Common shareholders' equity	Common shareholders' equity	$	95,151		$	97,691		Common shareholders' equity	$	92,076		$	91,391
Tangible common shareholders’ equity2		$	70,083		$	72,499
Tangible common shareholders’ equity3								Tangible common shareholders’ equity3	$	67,951		$	67,123
Common shares outstanding	Common shares outstanding	1,756			1,772			Common shares outstanding	1,670			1,675
Book value per common share7	Book value per common share7	$	54.18		$	55.12		Book value per common share7	$	55.13		$	54.55
Tangible book value per common share2, 7		$	39.91		$	40.91
Tangible book value per common share3, 7								Tangible book value per common share3, 7	$	40.68		$	40.06
Worldwide employees (in thousands)	Worldwide employees (in thousands)	77			75			Worldwide employees (in thousands)	82			82
Client assets8 (in billions)	Client assets8 (in billions)	$	6,247		$	6,495		Client assets8 (in billions)	$	5,920		$	5,492
Capital Ratios9	Capital Ratios9							Capital Ratios9
Common Equity Tier 1 capital—Standardized	Common Equity Tier 1 capital—Standardized	14.5		%	16.0		%	Common Equity Tier 1 capital—Standardized	15.1		%	15.3		%
Tier 1 capital—Standardized	Tier 1 capital—Standardized	16.0		%	17.7		%	Tier 1 capital—Standardized	17.0		%	17.2		%
Common Equity Tier 1 capital—Advanced	Common Equity Tier 1 capital—Advanced	15.9		%	17.4		%	Common Equity Tier 1 capital—Advanced	15.6		%	15.6		%
Tier 1 capital—Advanced	Tier 1 capital—Advanced	17.6		%	19.1		%	Tier 1 capital—Advanced	17.5		%	17.6		%
Tier 1 leverage	Tier 1 leverage	6.8		%	7.1		%	Tier 1 leverage	6.7		%	6.7		%
SLR	SLR	5.5		%	5.6		%	SLR	5.5		%	5.5		%

1.The expense efficiency ratio represents total non-interest expenses as a percentage of net revenues.

2.~~Represents a non-GAAP financial measure. See “Selected Non-GAAP Financial Information” herein.~~

3.ROE and ROTCE represent annualized earnings applicable to Morgan Stanley common shareholders as a percentage of average common equity and average tangible common equity, respectively.

3.Represents a non-GAAP financial measure. See “Selected Non-GAAP Financial Information” herein.

4.Pre-tax margin represents income before provision for income taxes as a percentage of net revenues.

5.For a discussion of Liquidity resources, see “Liquidity and Capital Resources—Balance Sheet—Liquidity Risk Management Framework—Liquidity Resources” herein.

6.Includes loans held for investment, net of ACL, loans held for sale and also includes loans at fair value, which are included in Trading assets in the balance sheet.

7.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.

8.Client assets represents Wealth Management client assets and Investment Management ~~AUM~~.AUM. Certain Wealth Management client assets are invested in Investment Management products and are also included in Investment Management’s AUM.

9.For a discussion of our capital ratios, see “Liquidity and Capital Resources—Regulatory Requirements” herein.

~~Russia~~


			4			March 2023 Form 10-Q


Table of Contents
Management’s Discussion and Analysis

Economic and ~~Ukraine War~~Market Conditions

~~We are monitoring~~The global economic and geopolitical environment continues to be characterized by elevated inflation, rising interest rates and volatility in global financial markets and deterioration in the ~~war~~macroeconomic outlook. This environment has impacted our businesses, as discussed further in ~~Ukraine~~“Business Segments” herein, and, ~~its~~to the extent that it continues to deteriorate, could adversely impact client confidence and related activity. In addition to the aforementioned conditions, certain financial institutions have recently come under significant stress. While the full impact of these events in the U.S. or global banking sector remains uncertain, they have not significantly impacted our results or financial condition. For more information on ~~both the Ukrainian~~economic and ~~Russian economies, as well as related impacts~~market conditions and their potential effects on ~~other world economies and the financial markets. Our direct exposure to both Russia and Ukraine is limited. We are not entering any new business onshore in Russia and~~ our ~~activities in Russia are limited to helping global clients address and close out pre-existing obligations.~~

~~Refer~~future results, refer to “Risk Factors” and “Forward-Looking Statements” in the ~~2021~~2022 Form ~~10-K~~10-K.

Following the recent failure of several financial institutions and resulting losses to the FDIC’s Deposit Insurance Fund (“DIF”) it is likely that the FDIC will assess certain financial institutions, including the Firm, for ~~more information on~~additional amounts to be provided to the ~~potential effects of geopolitical events and acts of war or aggression.~~DIF. While such special assessments have not been determined, they may impact our future operating results.

Selected Non-GAAP Financial Information

We prepare our financial statements using U.S. GAAP. From time to time, we may disclose certain “non-GAAP financial measures” in this document or in the course of our earnings releases, earnings and other conference calls, financial presentations, definitive proxy ~~statement~~statements and ~~otherwise.~~other public disclosures. A “non-GAAP financial measure” excludes, or includes, amounts from the most directly comparable measure


			4			~~March 2022 Form 10-Q~~


~~Table of Contents~~
~~Management’s Discussion and Analysis~~

calculated and presented in accordance with U.S. GAAP. We consider the non-GAAP financial measures we disclose to be useful to us, investors, analysts and other stakeholders by providing further transparency about, or an alternate means of assessing or comparing our financial condition, operating results and capital adequacy.

These measures are not in accordance with, or a substitute for, U.S. GAAP and may be different from or inconsistent with non-GAAP financial measures used by other companies. Whenever we refer to a non-GAAP financial measure, we will also generally define it or present the most directly comparable financial measure calculated and presented in accordance with U.S. GAAP, along with a reconciliation of the differences between the U.S. GAAP financial measure and the non-GAAP financial measure.

In the fourth quarter of 2022, we introduced new non-GAAP financial measures and have presented comparable prior year quarter amounts for the first time in the following table. These measures exclude the impact of mark-to-market gains and losses on investments associated with certain employee deferred cash-based compensation plans from net revenues and compensation expenses. These employee deferred cash-

based compensation plans are primarily reflected in our Wealth Management business segment. For more information, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Executive Summary” in the 2022 Form 10-K.

The principal non-GAAP financial measures presented in this document are set forth in the following tables.

Reconciliations from U.S. GAAP to Non-GAAP Consolidated Financial Measures

Three Months Ended
March 31,
$ in millions, except per share data 2022 2021
Earnings applicable to Morgan Stanley common shareholders $ 3,542 $ 3,982
Impact of adjustments:
Wealth Management—Compensation expenses 1 30
Wealth Management—Non-compensation expenses 74 34
Investment Management—Compensation expenses 9 3
Investment Management—Non-compensation expenses 23 8
Integration-related expenses 107 75
Related tax benefit (25) (17)
Adjusted earnings applicable to Morgan Stanley common shareholders—non-GAAP1
$ 3,624 $ 4,040
Earnings per diluted common share $ 2.02 $ 2.19
Impact of adjustments 0.04 0.03
Adjusted earnings per diluted common share—non-GAAP1
$ 2.06 $ 2.22
Expense efficiency ratio 69 % 67 %
Impact of adjustments (1) % (1) %
Adjusted expense efficiency ratio—non-GAAP1
68 % 66 %
Wealth Management Pre-tax margin 27 % 27 %
Impact of adjustments 1 % 1 %
Adjusted Wealth Management pre-tax margin—non-GAAP1
28 % 28 %
Investment Management Pre-tax margin 17 % 28 %
Impact of adjustments 2 % 1 %
Adjusted Investment Management pre-tax margin—non-GAAP1
19 % 29 %


	Three Months Ended March 31,
$ in millions, except per share data		2023		2022
Net revenues		$	14,517	$	14,801
Adjustment for mark-to-market losses (gains) on certain employee deferred cash-based compensation plans1		(153)		441
Adjusted Net revenues—non-GAAP		$	14,364	$	15,242
Compensation expense		$	6,410	$	6,274
Adjustment for mark-to-market gains (losses) on certain employee deferred cash-based compensation plans1		(193)		288
Adjusted Compensation expense—non-GAAP		$	6,217	$	6,562
Wealth Management Net revenues		$	6,559	$	5,935
Adjustment for mark-to-market losses (gains) on certain employee deferred cash-based compensation plans1		(101)		296
Adjusted Wealth Management Net revenues—non-GAAP		$	6,458	$	6,231
Wealth Management Compensation expense		$	3,477	$	3,125
Adjustment for mark-to-market gains (losses) on certain employee deferred cash-based compensation plans1		(119)		200
Adjusted Wealth Management Compensation expense—non-GAAP		$	3,358	$	3,325


$ in millions	$ in millions	At March 31, 2022		At December 31, 2021		$ in millions	At March 31, 2023		At December 31, 2022
Tangible equity	Tangible equity					Tangible equity
Common shareholders' equity		$	95,151	$	97,691
Common shareholders’ equity						Common shareholders’ equity	$	92,076	$	91,391
Less: Goodwill and net intangible assets	Less: Goodwill and net intangible assets	(25,068)		(25,192)		Less: Goodwill and net intangible assets	(24,125)		(24,268)
Tangible common shareholders' equity—non-GAAP		$	70,083	$	72,499
Tangible common shareholders’ equity—non-GAAP						Tangible common shareholders’ equity—non-GAAP	$	67,951	$	67,123


		Average Monthly Balance
	Three Months Ended March 31,
$ in millions		2023		2022
Tangible equity
Common shareholders’ equity		$	91,382	$	96,667
Less: Goodwill and net intangible assets		(24,198)		(25,120)
Tangible common shareholders’ equity—non-GAAP		$	67,184	$	71,547

Three Months Ended
March 31,


March 2023 Form 10-Q			5


Table of Contents
Management’s Discussion and Analysis

Average Monthly Balance
Three Months Ended
March 31,
$ in millions 2022 2021
Tangible equity
Common shareholders' equity $ 96,667 $ 94,343
Less: Goodwill and net intangible assets (25,120) (18,849)
Tangible common shareholders' equity—non-GAAP $ 71,547 $ 75,494

Three Months Ended
March 31,
$ in billions 2022 2021
Average common equity
Unadjusted—GAAP $ 96.7 $ 94.3
Adjusted1—Non-GAAP
96.7 94.4
ROE2
Unadjusted—GAAP 14.7 % 16.9 %
Adjusted1—Non-GAAP
15.0 % 17.1 %
Average tangible common equity—Non-GAAP
Unadjusted $ 71.5 $ 75.5
Adjusted1
71.6 75.5
ROTCE2—Non-GAAP
Unadjusted 19.8 % 21.1 %
Adjusted1
20.3 % 21.4 %

Non-GAAP Financial Measures by Business Segment


		Three Months Ended March 31,								Three Months Ended March 31,
$ in billions	$ in billions		2022			2021			$ in billions		2023			2022
Average common equity3
Average common equity2									Average common equity2
Institutional Securities	Institutional Securities		$	48.8		$	43.5		Institutional Securities		$	45.6		$	48.8
Wealth Management	Wealth Management		31.0			28.5			Wealth Management		28.8			31.0
Investment Management	Investment Management		10.6			4.4			Investment Management		10.4			10.6
ROE4
ROE3									ROE3
Institutional Securities	Institutional Securities		17		%	23		%	Institutional Securities		12		%	17		%
Wealth Management	Wealth Management		16		%	17		%	Wealth Management		19		%	16		%
Investment Management	Investment Management		8		%	25		%	Investment Management		5		%	8		%
Average tangible common equity3
Average tangible common equity2									Average tangible common equity2
Institutional Securities	Institutional Securities		$	48.3		$	42.9		Institutional Securities		$	45.2		$	48.3
Wealth Management	Wealth Management		16.3			13.4			Wealth Management		14.8			16.3
Investment Management	Investment Management		0.8			1.2			Investment Management		0.7			0.8
ROTCE4
ROTCE3									ROTCE3
Institutional Securities	Institutional Securities		17		%	23		%	Institutional Securities		12		%	17		%
Wealth Management	Wealth Management		30		%	36		%	Wealth Management		36		%	30		%
Investment Management	Investment Management		106		%	88		%	Investment Management		73		%	106		%

1.~~Adjusted amounts exclude~~Net revenues and compensation expense are adjusted for certain employee deferred cash-based compensation plans for both Firm and Wealth Management business segment. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Other Matters” in the ~~effect of costs related to the integrations of E*TRADE and Eaton Vance, net of tax as appropriate.~~2022 Form 10-K for more information.

2.ROE and ROTCE represent earnings applicable to Morgan Stanley common shareholders as a percentage of average common equity and average tangible common equity, respectively. When excluding integration-related costs, both the numerator and average denominator are adjusted.

3.Average common equity and average tangible common equity for each business segment is determined using our Required Capital framework (see ~~"Liquidity~~“Liquidity and Capital Resources—Regulatory Requirements—Attribution of Average Common Equity According to the Required Capital Framework” herein). The sums of the segments’ Average common equity and Average tangible common equity do not equal the Consolidated measures due to Parent equity.

4.3.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.

Return on Tangible Common Equity Goal

~~In January 2022, we established~~We have an ROTCE goal of over 20%~~, excluding integration-related expenses.~~. Our ROTCE goal is a forward-looking statement that ~~was~~is based on a normal market environment and may be materially affected by many factors.


~~March 2022 Form 10-Q~~			5


~~Table of Contents~~
~~Management’s Discussion and Analysis~~

See “Risk Factors” and “Forward-Looking Statements” in the ~~2021~~2022 Form 10-K for further information on market and economic conditions and their potential effects on our future operating results.

ROTCE represents a non-GAAP financial measure. For further information on non-GAAP measures, ~~(ROTCE excluding integration-related expenses),~~ see “Selected Non-GAAP Financial Information” herein.

Business Segments

Substantially all of our operating revenues and operating expenses are directly attributable to our business segments. Certain revenues and expenses have been allocated to each business segment, generally in proportion to its respective net revenues, non-interest expenses or other relevant measures. See Note 19 to the financial statements for segment net revenues by income statement line item and information on intersegment transactions.

For an overview of the components of our business segments, net revenues, compensation expense and income taxes, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Business Segments” in the ~~2021~~2022 Form 10-K.


			6			March ~~2022~~2023 Form 10-Q


Table of Contents
Management’s Discussion and Analysis

Institutional Securities

Income Statement Information

Three Months Ended
March 31,
$ in millions 2022 2021 % Change
Revenues
Advisory $ 944 $ 480 97 %
Equity 258 1,502 (83) %
Fixed income 432 631 (32) %
Total Underwriting 690 2,133 (68) %
Total Investment banking 1,634 2,613 (37) %
Equity 3,174 2,875 10 %
Fixed income 2,923 2,966 (1) %
Other (74) 123 (160) %
Net revenues $ 7,657 $ 8,577 (11) %
Provision for credit losses 44 (93) 147 %
Compensation and benefits 2,604 3,114 (16) %
Non-compensation expenses 2,222 2,185 2 %
Total non-interest expenses 4,826 5,299 (9) %
Income before provision for income taxes 2,787 3,371 (17) %
Provision for income taxes 535 736 (27) %
Net income 2,252 2,635 (15) %
Net income applicable to noncontrolling interests 61 34 79 %
Net income applicable to Morgan Stanley $ 2,191 $ 2,601 (16) %


	Three Months Ended March 31,				% Change
$ in millions	2023		2022
Revenues
Advisory	$	638	$	944	(32)	%
Equity	202		258		(22)	%
Fixed income	407		432		(6)	%
Total Underwriting	609		690		(12)	%
Total Investment banking	1,247		1,634		(24)	%
Equity	2,729		3,174		(14)	%
Fixed income	2,576		2,923		(12)	%
Other	245		(74)		N/M
Net revenues	$	6,797	$	7,657	(11)	%
Provision for credit losses	189		44		N/M
Compensation and benefits	2,365		2,604		(9)	%
Non-compensation expenses	2,351		2,222		6	%
Total non-interest expenses	4,716		4,826		(2)	%
Income before provision for income taxes	1,892		2,787		(32)	%
Provision for income taxes	363		535		(32)	%
Net income	1,529		2,252		(32)	%
Net income applicable to noncontrolling interests	51		61		(16)	%
Net income applicable to Morgan Stanley	$	1,478	$	2,191	(33)	%

Investment Banking

Investment Banking Volumes
Three Months Ended
March 31,
$ in billions 2022 2021
Completed mergers and acquisitions1
$ 320 $ 228
Equity and equity-related offerings2, 3
8 37
Fixed income offerings2, 4
81 105


	Three Months Ended March 31,
$ in billions		2023		2022
Completed mergers and acquisitions1		$	129	$	331
Equity and equity-related offerings2, 3		10		8
Fixed income offerings2, 4		63		81

Source: Refinitiv data as of April ~~1, 2022.~~3, 2023. Transaction volumes may not be indicative of net revenues in a given period. In addition, transaction volumes for prior periods may vary from amounts previously reported due to the subsequent withdrawal, change in value or change in timing of certain transactions.

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.

Investment Banking Revenues

Revenues of ~~$1,634~~$1,247 million in the current quarter decreased ~~37%~~24% compared with the prior year quarter, primarily reflecting ~~a decrease in equity underwriting revenues, partially offset by an increase in~~lower advisory revenues.

•Advisory revenues ~~increased~~decreased primarily due to ~~higher~~fewer completed M&A transactions.

•Equity underwriting revenues decreased onprimarily due to lower ~~volumes in line with market levels, with lower revenues across all products.~~initial public offerings.

•Fixed income underwriting revenues decreased primarily due to lower ~~bond~~non-investment grade loan issuances.

Investment Banking continues to operate in a global economic and geopolitical environment characterized by significantly reduced M&A and underwriting activity amid elevated inflation, rising interest rates and volatility in global financial markets and deterioration in the macroeconomic outlook and client confidence. To the extent that the environment continues to deteriorate, it could adversely impact global announced M&A transactions and underwriting volumes, and as a result, continue to adversely impact our Investment Banking revenues.

See “Investment Banking Volumes” herein.

Equity, Fixed Income and Other Net Revenues

Equity and Fixed Income Net Revenues

Three Months Ended March 31, 2022

Net Interest2
All Other3

$ in millions Trading
Fees1
Total
Financing $ 1,251 $ 132 $ 87 $ 4 $ 1,474
Execution services 924 693 (34) 117 1,700
Total Equity $ 2,175 $ 825 $ 53 $ 121 $ 3,174
Total Fixed Income $ 2,258 $ 97 $ 508 $ 60 $ 2,923

Three Months Ended March 31, 2021

Net Interest2
All Other3

$ in millions Trading
Fees1
Total
Financing $ 645 $ 130 $ 182 $ 3 $ 960
Execution services 1,114 800 (62) 63 1,915
Total Equity $ 1,759 $ 930 $ 120 $ 66 $ 2,875
Total Fixed Income $ 2,313 $ 81 $ 439 $ 133 $ 2,966


	Three Months Ended March 31, 2023
					Net Interest2		All Other3
$ in millions	Trading		Fees1		Net Interest2		All Other3		Total
Financing	$	1,696	$	134	$	(541)	$	32	$	1,321
Execution services	848		619		(59)		—		1,408
Total Equity	$	2,544	$	753	$	(600)	$	32	$	2,729
Total Fixed Income	$	2,478	$	109	$	(89)	$	78	$	2,576


	Three Months Ended March 31, 2022
					Net Interest2		All Other3
$ in millions	Trading		Fees1		Net Interest2		All Other3		Total
Financing	$	1,251	$	132	$	87	$	4	$	1,474
Execution services	924		693		(34)		117		1,700
Total Equity	$	2,175	$	825	$	53	$	121	$	3,174
Total Fixed Income	$	2,258	$	97	$	508	$	60	$	2,923

1.Includes Commissions and fees and Asset management revenues.

2.Includes funding costs, which are allocated to the businesses based on funding usage.

3.Includes Investments and Other revenues.

Equity

Net revenues of ~~$3,174~~$2,729 million in the current quarter ~~increased 10%~~decreased 14% compared with the prior year quarter, reflecting ~~an increase in financing, partially offset by~~ a decrease in execution ~~services.~~services and financing.

•Financing revenues ~~increased~~decreased primarily due to ~~the absence~~lower average client balances reflective of ~~a credit event for a single client in the prior year quarter.~~market declines.

•Execution services revenues decreased primarily due to lower gains from the impact of market conditions on inventory held to facilitate client activity and lower client activity across products compared to the prior year ~~quarter, partially offset by the absence of trading losses related to the aforementioned credit event.~~quarter.

Fixed Income

Net revenues of ~~$2,923~~$2,576 million in the current quarter ~~were relatively unchanged when~~decreased 12% compared with the prior year quarter, asprimarily reflecting a decrease in ~~credit~~foreign exchange products ~~was~~and commodities, partially offset by ~~an increase~~increases in ~~commodities~~rates and ~~global macro~~credit products.

•Global macro products revenues ~~increased~~decreased primarily due to a decline in foreign exchange products, ~~due to the impact of~~partially offset by an increase from market conditions on inventory held to ~~facilitate client activity. Client activity levels were elevated consistent with the prior year quarter.~~

•~~Credit products revenues decreased primarily due to the impact of market conditions on inventory held to facilitate client activity across products.~~

•Commodities products and other fixed income revenues increased primarily driven by higher client activity and the impact of market conditions on inventory held to facilitate client activity in Commodities.


March ~~2022~~2023 Form 10-Q			7


Table of Contents
Management’s Discussion and Analysis

~~Other Net Revenues~~facilitate client activity in rates products reflective of interest rate volatility across regions.

~~Other Net~~•Credit products revenues increased, supported by client engagement, reflecting the impact of market conditions on inventory held to facilitate client activity in ~~the current quarter~~corporate credit products and municipal securities.

•Commodities products and other fixed income revenues decreased compared ~~with~~to elevated results in the prior year quarter, primarily due to ~~losses~~lower gains from the impact of market conditions on inventory held to facilitate client activity and lower client activity in Commodities.

Other Net Revenues

Other net revenues reflected a gain of $245 million in the current quarter compared with a loss of $74 million in the prior year quarter, primarily due to gains compared with losses in the prior year quarter on investments associated with certain employee deferred cash-based compensation plans, higher net interest income on corporate loans, and ~~higher~~lower mark-to-market losses on corporate loans ~~held for sale, net~~inclusive of ~~related hedges in the current quarter.~~hedges.

Provision for Credit Losses

The Provision for credit losses on loans and lending commitments of ~~$44~~$189 million in the current quarter was primarily ~~driven by portfolio growth.~~related to a deterioration in both the macroeconomic outlook and our expectations of commercial real estate borrowers. The Provision for credit losses on loans and lending commitments was ~~a net release of $93~~$44 million in the prior year quarter, primarily driven by ~~improvements in the outlook for macroeconomic conditions and the impact of paydowns on Corporate loans, including by lower-rated borrowers.~~portfolio growth.

For further information on the Provision for credit losses, see “Credit Risk” herein.

Non-interest Expenses

Non-interest expenses of ~~$4,826~~$4,716 million in the current quarter decreased 9%2% compared with the prior year quarter, primarily ~~as a result of~~due to lower Compensation and benefits expenses, partially offset by higher Non-compensation expenses.

•Compensation and benefits expenses decreased in the current quarter, primarily due to lower discretionary incentive compensation on lower revenues, partially offset by higher stock-based compensation expense driven by the Firm’s share price and ~~lower~~higher expenses related to certain deferred cash-based compensation plans linked to ~~the Firm~~’~~s share price and~~ investment ~~performance, partially offset by higher salaries.~~performance.

•Non-compensation expenses increased in the current quarter, primarily due to an increase in ~~litigation~~legal expenses and ~~investments in technology, partially offset by lower volume-related~~higher marketing and ~~other expenses.~~business development costs.

~~Income Tax Items~~

The effective tax rate of 19.2% is lower than the prior year quarter due to higher benefits related to the conversion of employee share-based awards, which primarily occur in the first quarter of each year.


			8			March ~~2022~~2023 Form 10-Q


Table of Contents
Management’s Discussion and Analysis

Wealth Management

Income Statement Information


		Three Months Ended March 31,							Three Months Ended March 31,				% Change
$ in millions	$ in millions	2022		2021		% Change		$ in millions	2023		2022
Revenues	Revenues							Revenues
Asset management	Asset management	$	3,626	$	3,191	14	%	Asset management	$	3,382	$	3,626	(7)	%
Transactional1	Transactional1	635		1,228		(48)	%	Transactional1	921		635		45	%
Net interest	Net interest	1,540		1,385		11	%	Net interest	2,158		1,540		40	%
Other1	Other1	134		155		(14)	%	Other1	98		134		(27)	%
Net revenues	Net revenues	5,935		5,959		—	%	Net revenues	6,559		5,935		11	%
Provision for credit losses	Provision for credit losses	13		(5)		N/M		Provision for credit losses	45		13		N/M
Compensation and benefits	Compensation and benefits	3,125		3,170		(1)	%	Compensation and benefits	3,477		3,125		11	%
Non-compensation expenses	Non-compensation expenses	1,224		1,194		3	%	Non-compensation expenses	1,325		1,224		8	%
Total non-interest expenses	Total non-interest expenses	4,349		4,364		—	%	Total non-interest expenses	4,802		4,349		10	%
Income before provision for income taxes	Income before provision for income taxes	$	1,573	$	1,600	(2)	%	Income before provision for income taxes	$	1,712	$	1,573	9	%
Provision for income taxes	Provision for income taxes	301		358		(16)	%	Provision for income taxes	336		301		12	%
Net income applicable to Morgan Stanley	Net income applicable to Morgan Stanley	$	1,272	$	1,242	2	%	Net income applicable to Morgan Stanley	$	1,376	$	1,272	8	%

1.Transactional includes Investment banking, Trading, and Commissions and fees revenues. Other includes Investments and Other revenues.

Wealth Management Metrics

$ in billions At March 31,
2022 At December 31,
2021
Total client assets $ 4,800 $ 4,930
U.S. Bank Subsidiary loans $ 137 $ 129
Margin and other lending1
$ 29 $ 31
Deposits2
$ 352 $ 346
Annualized weighted average cost of deposits 0.09% 0.10%


$ in billions	At March 31, 2023		At December 31, 2022
Total client assets1	$	4,558	$	4,187
U.S. Bank Subsidiary loans	$	144	$	146
Margin and other lending2	$	21	$	22
Deposits3	$	341	$	351
Annualized weighted average cost of deposits4
Period end	2.05%		1.59%
Period average for three months ended	1.86%		1.32%

Three Months Ended
March 31,
2022 2021
Net new assets3
$ 142.0 $ 104.9


	Three Months Ended March 31,
		2023		2022
Net new assets5		$	109.6	$	142.0

1.Client assets represent those for which Wealth Management is providing services including financial advisor-led brokerage, custody, administrative and investment advisory services; self-directed brokerage and investment advisory services; financial and wealth planning services; workplace services, including stock plan administration, and retirement plan services. See “Self-directed Channel” herein for additional information.

2.Margin and other lending represents margin lending arrangements, which allow customers to borrow against the value of qualifying securities and other lending which includes non‐purpose securities-based lending on non‐bank entities.

2.3.Deposits ~~are~~reflect liabilities sourced from Wealth Management clients and other sources of funding on the U.S. Bank Subsidiaries. Deposits include sweep deposit programs, savings and other, and time deposits. Excludes approximately $8$2 billion and $9$6 billion of off-balance sheet deposits as of March 31, ~~2022~~2023 and December 31, ~~2021,~~2022, respectively.

3.4.Annualized weighted average represents the total annualized weighted average cost of the various deposit products, excluding the effect of related hedging derivatives. The period end cost of deposits is based upon balances and rates as of March 31, 2023 and December 31, 2022. The period average is based on daily balances and rates for the period.

5.Net new assets represent client asset inflows, including dividends and ~~interest,~~interest, and asset acquisitions, less client asset outflows, and exclude activity from business combinations/divestitures and the impact of fees and commissions.

Advisor-led Channel


$ in billions	$ in billions	At March 31, 2022		At December 31, 2021		$ in billions	At March 31, 2023		At December 31, 2022
Advisor-led client assets1	Advisor-led client assets1	$	3,835	$	3,886	Advisor-led client assets1	$	3,582	$	3,392
Fee-based client assets2	Fee-based client assets2	$	1,873	$	1,839	Fee-based client assets2	$	1,769	$	1,678
Fee-based client assets as a percentage of advisor-led client assets	Fee-based client assets as a percentage of advisor-led client assets	49%		47%		Fee-based client assets as a percentage of advisor-led client assets	49%		49%

Three Months Ended
March 31,
2022 2021
Fee-based asset flows3
$ 97.2 $ 37.2


	Three Months Ended March 31,
		2023		2022
Fee-based asset flows3		$	22.4	$	97.2

1.Advisor-led client assets represent client assets in accounts that have a Wealth Management representative assigned.

2.Fee‐based client assets represent the amount of assets in client accounts where the basis of payment for services is a fee calculated on ~~thos~~ethose assets.

3.Fee-based asset flows include net new fee-based assets (including asset acquisitions), net account transfers, dividends, interest and client fees, and exclude institutional cash management related activity. For a ~~description~~description of the Inflows and Outflows included in Fee-based asset flows, see Fee-based client assets in the ~~2021~~2022 Form 10-K.

Self-directed Channel


$ in billions	$ in billions	At March 31, 2022		At December 31, 2021		$ in billions	At March 31, 2023		At December 31, 2022
Self-directed assets1	Self-directed assets1	$	965	$	1,044	Self-directed assets1	$	976	$	795
Self-directed households (in millions)2	Self-directed households (in millions)2	7.6		7.4		Self-directed households (in millions)2	8.1		8.0

Three Months Ended
March 31,
2022 2021
Daily average revenue trades (“DARTs”) (in thousands)3
1,016 1,619


	Three Months Ended March 31,
		2023	2022
Daily average revenue trades (“DARTs”) (in thousands)3		831	1,016

1.Self-directed assets represent active accounts which are not advisor led. Active accounts are defined as having at least $25 in assets.

2.Self-directed households represent the total number of households that include at least one account with self-directed assets. Individual households or participants that are engaged in one or more of our Wealth Management channels ~~will be~~are included in each of the respective channel counts.

3.DARTs represent the total self-directed trades in a period divided by the number of trading days during that period.

Workplace Channel1


$ in billions	$ in billions	At March 31, 2022		At December 31, 2021		$ in billions	At March 31, 2023		At December 31, 2022
Stock plan unvested assets2	Stock plan unvested assets2	$	454	$	509	Stock plan unvested assets2	$	358	$	302
Stock plan participants (in millions)3	Stock plan participants (in millions)3	5.8		5.6		Stock plan participants (in millions)3	6.5		6.3

1.The workplace channel includes equity compensation solutions for companies, their executives and employees.

2.Stock plan unvested assets represent the market value of public company securities at the end of the period.

3.Stock plan participants represent total accounts with vested and/or unvested stock plan assets in the workplace channel. Individuals with accounts in multiple plans are counted as participants in each plan.

Net Revenues

Asset Management

Asset management revenues of ~~$3,626~~$3,382 million in the current quarter ~~increased 14%~~decreased 7% compared with the prior year quarter, primarily due to ~~higher~~lower fee-based asset levels in the current quarter ~~as a result~~resulting from lower market levels, partially offset by the cumulative impact of positive fee-based ~~flows and market appreciation since the prior year quarter.~~flows.

See “Fee-Based Client Assets—Rollforwards” herein.

Transactional Revenues

Transactional revenues of ~~$635~~$921 million in the current quarter ~~decreased 48%~~increased 45% compared with the prior year quarter,


March 2023 Form 10-Q			9


Table of Contents
Management’s Discussion and Analysis

primarily due to ~~losses~~gains on investments associated with certain employee deferred cash-based compensation plans ~~lower~~compared with losses in the prior year quarter, partially offset by fewer new issuances and reduced client ~~activity in equities, and lower revenues from closed-end fund issuances.~~activity.

For further information on the impact of investments associated with certain employee deferred cash-based compensation plans, see “Selected Non-GAAP Financial Information” herein.

Net Interest

Net interest revenues of ~~$1,540~~$2,158 million in the current quarter increased ~~11%~~40% compared with the prior year quarter, primarily due to ~~growth in bank lending and~~the net effect of higher interest ~~rates.~~rates, partially offset by the impact of a reduction in brokerage sweep deposits in excess of our expectations.

The level and pace of interest rate changes and other macroeconomic factors continue to impact client demand for loans, client preferences for cash allocation to other products and the pace of reallocation of client balances, resulting in changes in the deposit mix and associated interest expense. If these trends persist, net interest income may continue to be impacted in future periods.

Provision for Credit Losses

The Provision for credit losses on loans and lending commitments of $45 million in the current quarter was primarily driven by deterioration in the macroeconomic outlook. The Provision for credit losses on loans and lending commitments was $13 million in the prior year quarter, primarily driven by portfolio growth.

Non-interest Expenses

Non-interest expenses of ~~$4,349~~$4,802 million in the current quarter ~~were relatively unchanged from~~increased 10% compared with the prior year ~~quarter.~~quarter, as a result of higher Compensation and benefits expenses and higher Non-compensation expenses.

•Compensation and benefits expenses ~~decreased~~increased in the current quarter primarily due to ~~lower~~higher expenses related to


~~March 2022 Form 10-Q~~			9


~~Table of Contents~~
~~Management’s Discussion and Analysis~~

certain deferred cash-based compensation plans linked to investment performance and the impact of higher headcount, partially offset by ~~an increase~~a decrease in the formulaic payout to Wealth Management representatives driven by ~~higher~~lower compensable ~~revenues, as well as higher salaries.~~revenues.

For further information on the impact of expenses related to certain employee deferred cash-based compensation plans linked to investment performance, see “Selected Non-GAAP Financial Information” herein.

•Non-compensation expenses increased in the current quarter primarily ~~due to~~driven by higher ~~professional services expenses~~spend on technology and ~~investments in technology, partially offset by lower brokerage~~higher marketing and ~~clearing~~business development costs.

Fee-Based Client Assets Rollforwards


$ in billions	$ in billions	At December 31, 2021		Inflows1		Outflows		Market Impact		At March 31, 2022		$ in billions	At December 31, 2022		Inflows		Outflows		Market Impact		At March 31, 2023
Separately managed2		$	479	$	87	$	(8)	$	7	$	565
Separately managed1												Separately managed1	$	501	$	16	$	(7)	$	18	$	528
Unified managed	Unified managed	467		25		(14)		(31)		447		Unified managed	408		21		(14)		17		432
Advisor	Advisor	211		9		(11)		(10)		199		Advisor	167		9		(9)		9		176
Portfolio manager	Portfolio manager	636		30		(21)		(30)		615		Portfolio manager	552		26		(20)		20		578
Subtotal	Subtotal	$	1,793	$	151	$	(54)	$	(64)	$	1,826	Subtotal	$	1,628	$	72	$	(50)	$	64	$	1,714
Cash management	Cash management	46		9		(8)		—		47		Cash management	50		20		(15)		—		55
Total fee-based client assets	Total fee-based client assets	$	1,839	$	160	$	(62)	$	(64)	$	1,873	Total fee-based client assets	$	1,678	$	92	$	(65)	$	64	$	1,769


$ in billions	$ in billions	At December 31, 2020		Inflows		Outflows		Market Impact		At March 31, 2021		$ in billions	At December 31, 2021		Inflows2		Outflows		Market Impact		At March 31, 2022
Separately managed2		$	359	$	13	$	(7)	$	20	$	385
Separately managed1												Separately managed1	$	479	$	87	$	(8)	$	7	$	565
Unified managed	Unified managed	379		27		(14)		13		405		Unified managed	467		25		(14)		(31)		447
Advisor	Advisor	177		12		(9)		8		188		Advisor	211		9		(11)		(10)		199
Portfolio manager	Portfolio manager	509		33		(18)		25		549		Portfolio manager	636		30		(21)		(30)		615
Subtotal	Subtotal	$	1,424	$	85	$	(48)	$	66	$	1,527	Subtotal	$	1,793	$	151	$	(54)	$	(64)	$	1,826
Cash management	Cash management	48		8		(9)		—		47		Cash management	46		9		(8)		—		47
Total fee-based client assets	Total fee-based client assets	$	1,472	$	93	$	(57)	$	66	$	1,574	Total fee-based client assets	$	1,839	$	160	$	(62)	$	(64)	$	1,873

1.~~Includes $75 billion of fee-based assets acquired in an asset acquisition in the current quarter reflected in Separately managed.~~

2.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 $75 billion of fee-based assets acquired in an asset acquisition in the first quarter of 2022, reflected in Separately managed.

Average Fee Rates1


		Three Months Ended March 31,			Three Months Ended March 31,
Fee rate in bps	Fee rate in bps	2022	2021	Fee rate in bps		2023	2022
Separately managed	Separately managed	13	14	Separately managed		13	13
Unified managed	Unified managed	94	97	Unified managed		93	94
Advisor	Advisor	81	81	Advisor		80	81
Portfolio manager	Portfolio manager	92	93	Portfolio manager		91	92
Subtotal	Subtotal	68	73	Subtotal		66	68
Cash management	Cash management	6	5	Cash management		6	6
Total fee-based client assets	Total fee-based client assets	67	71	Total fee-based client assets		65	67

1.Based on Asset management revenues related to advisory services associated with fee-based assets.

For a description of fee-based client assets and rollforward items in the previous tables, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Business Segments—Wealth Management Fee-Based Client Assets” in the ~~2021~~2022 Form 10-K.


			10			March ~~2022~~2023 Form 10-Q


Table of Contents
Management’s Discussion and Analysis

Investment Management

Income Statement Information

Three Months Ended
March 31,
$ in millions 2022 2021 % Change
Revenues

Asset management and related fees $ 1,388 $ 1,103 26 %
Performance-based income and other1
(53) 211 (125) %
Net revenues 1,335 1,314 2 %
Compensation and benefits 545 514 6 %
Non-compensation expenses 562 430 31 %
Total non-interest expenses 1,107 944 17 %
Income before provision for income taxes 228 370 (38) %
Provision for income taxes 37 81 (54) %
Net income 191 289 (34) %
Net income (loss) applicable to noncontrolling interests (12) 14 (186) %
Net income applicable to Morgan Stanley $ 203 $ 275 (26) %


	Three Months Ended March 31,				% Change
$ in millions	2023		2022
Revenues
Asset management and related fees	$	1,248	$	1,388	(10)	%
Performance-based income and other1	41		(53)		177	%
Net revenues	1,289		1,335		(3)	%
Compensation and benefits	568		545		4	%
Non-compensation expenses	555		562		(1)	%
Total non-interest expenses	1,123		1,107		1	%
Income before provision for income taxes	166		228		(27)	%
Provision for income taxes	30		37		(19)	%
Net income	136		191		(29)	%
Net income (loss) applicable to noncontrolling interests	2		(12)		117	%
Net income applicable to Morgan Stanley	$	134	$	203	(34)	%

1.Includes Investments, Trading, Commissions and fees, Net interest, and Other revenues.

~~Acquisition of Eaton Vance~~

The comparisons of current year results to prior periods are impacted by the acquisition of Eaton Vance on March 1, 2021. For additional information on the acquisition of Eaton Vance, see Note 3 to the financial statements in the Form 2021 10-K.

Net Revenues

Asset Management and Related Fees

Asset management and related fees of ~~$1,388~~$1,248 million in the current quarter ~~increased 26%~~decreased 10% from the prior year quarter, primarily due to ~~incremental revenues and higher~~lower average AUM asdriven by the decline in asset values and the cumulative effect of net outflows in Long-Term AUM.

Asset management revenues are influenced by the level and relative mix of AUM and related fee rates. The market environment in recent quarters has led to a ~~result~~decline in asset prices, which in turn, negatively impacted our AUM level across asset classes. To the extent the market condition deteriorates further, or we continue to see net outflows of ~~the Eaton Vance acquisition.~~Long-Term AUM, we would expect our Asset management revenue to continue to be negatively impacted.

See “Assets under Management or Supervision” herein.

Performance-based Income and Other

Performance-based income and other revenues ~~was~~were a ~~loss~~gain of ~~$53~~$41 million ~~a 125% decrease~~in the current quarter, representing an increase from the prior year quarter, primarily due to ~~lower carried interest and mark downs on investments, including the reversal of accrued carried interest and investment losses in an Asia private equity fund compared with~~ gains ~~in the prior year quarter, and the reversal of accrued carried interest in an international real estate fund. Also contributing to the decrease were losses~~ on investments associated with certain employee deferred cash-based compensation ~~plans.~~plans and mark-to-market gains on public investments compared with losses in the prior year quarter, partially offset by lower accrued carried interest.

Non-interest Expenses

Non-interest expenses of ~~$1,107~~$1,123 million in the current quarter increased ~~17%~~1% from the prior year quarter ~~as a result of higher Non-compensation expenses and~~primarily due to higher Compensation and benefits.

•Compensation and benefits expenses increased in the current quarter primarily due to ~~incremental compensation as a result of the Eaton Vance acquisition, partially offset by lower~~higher expenses related to certain deferred cash-based compensation plans linked to investment performance, ~~and~~partially offset by lower compensation associated with carried interest.

•Non-compensation expenses ~~increased in the current quarter primarily due to incremental expenses as a result of the Eaton Vance acquisition.~~were relatively unchanged.

Assets under Management or Supervision

Rollforwards

$ in billions Equity Fixed Income Alternatives and Solutions Long-Term AUM Subtotal Liquidity and Overlay Services Total
December 31, 2021 $ 395 $ 207 $ 466 $ 1,068 $ 497 $ 1,565
Inflows 19 19 27 65 494 559
Outflows (26) (22) (29) (77) (523) (600)
Market Impact (48) (7) (14) (69) (2) (71)
Other (3) (2) (1) (6) — (6)
March 31, 2022 $ 337 $ 195 $ 449 $ 981 $ 466 $ 1,447

$ in billions Equity Fixed Income Alternatives and Solutions Long-Term AUM Subtotal Liquidity and Overlay Services Total
December 31, 2020 $ 242 $ 98 $ 153 $ 493 $ 288 $ 781
Inflows 31 13 15 59 459 518
Outflows (23) (9) (10) (42) (433) (475)
Market Impact 4 (2) 10 12 — 12
Acquired1
119 103 251 473 116 589
Other (2) (2) (1) (5) (1) (6)
March 31, 2021 $ 371 $ 201 $ 418 $ 990 $ 429 $ 1,419

1.~~Related to the Eaton Vance acquisition.~~

~~March 2022 Form 10-Q~~

~~Table of Contents~~

~~Management’s Discussion and Analysis~~


$ in billions	Equity		Fixed Income		Alternatives and Solutions		Long-Term AUM Subtotal		Liquidity and Overlay Services		Total
December 31, 2022	$	259	$	173	$	431	$	863	$	442	$	1,305
Inflows	10		16		18		44		585		629
Outflows	(12)		(17)		(16)		(45)		(568)		(613)
Market Impact	21		4		15		40		6		46
Other	(1)		(1)		—		(2)		(3)		(5)
March 31, 2023	$	277	$	175	$	448	$	900	$	462	$	1,362


$ in billions	Equity		Fixed Income		Alternatives and Solutions		Long-Term AUM Subtotal		Liquidity and Overlay Services		Total
December 31, 2021	$	395	$	207	$	466	$	1,068	$	497	$	1,565
Inflows	19		19		27		65		494		559
Outflows	(26)		(22)		(29)		(77)		(523)		(600)
Market Impact	(48)		(7)		(14)		(69)		(2)		(71)
Other	(3)		(2)		(1)		(6)		—		(6)
March 31, 2022	$	337	$	195	$	449	$	981	$	466	$	1,447

Average AUM


		Three Months Ended March 31,						Three Months Ended March 31,
$ in billions	$ in billions		2022		2021		$ in billions		2023		2022
Equity	Equity		$	355	$	288	Equity		$	271	$	355
Fixed income	Fixed income		201		131		Fixed income		175		201
Alternatives and Solutions	Alternatives and Solutions		454		242		Alternatives and Solutions		441		454
Long-term AUM subtotal	Long-term AUM subtotal		1,010		661		Long-term AUM subtotal		887		1010
Liquidity and Overlay Services	Liquidity and Overlay Services		476		339		Liquidity and Overlay Services		442		476
Total AUM	Total AUM		$	1,486	$	1,000	Total AUM		$	1,329	$	1,486

Average Fee Rates1


		Three Months Ended March 31,			Three Months Ended March 31,
Fee rate in bps	Fee rate in bps		2022	2021		Fee rate in bps	2023	2022
Equity	Equity		70	77		Equity	72	70
Fixed income	Fixed income		36	33		Fixed income	35	36
Alternatives and Solutions	Alternatives and Solutions		35	45		Alternatives and Solutions	33	35
Long-term AUM	Long-term AUM		48	57		Long-term AUM	45	48
Liquidity and Overlay Services	Liquidity and Overlay Services		7	8		Liquidity and Overlay Services	13	7
Total AUM	Total AUM		35	40		Total AUM	35	35

1.Based on Asset management revenues, net of waivers, excluding performance-based fees and other non-management fees. For certain non-U.S. funds, it includes the portion of advisory fees that the advisor collects on behalf of third-party distributors. The payment of those fees to the distributor is included in Non-compensation expenses in the income statement.

Certain Eaton Vance products may have higher or lower average fee rates than similar products prior to the acquisition, with the overall impact yielding a lower average fee rate; however, Asset management and related fees arising from the acquisition are incremental to our revenues.

For a description of the asset classes and rollforward items in the previous tables, see “Management’s Discussion and


March 2023 Form 10-Q			11


Table of Contents
Management’s Discussion and Analysis

Analysis of Financial Condition and Results of Operations—Business Segments—Investment Management—Assets Under Management or Supervision” in the ~~2021~~2022 Form 10-K.


			12			March ~~2022~~2023 Form 10-Q


Table of Contents
Management’s Discussion and Analysis

Supplemental Financial Information

U.S. Bank Subsidiaries

Our U.S. bank subsidiaries, Morgan Stanley Bank N.A. (“MSBNA”) and Morgan Stanley Private Bank, National Association (“MSPBNA”) ~~(collectively,~~(together, “U.S. Bank Subsidiaries”), accept deposits, provide loans to a variety of customers, including large corporate and institutional clients as well as high to ultra-high net worth individuals, and invest in securities. Lending activity in the U.S. Bank Subsidiaries from the Institutional Securities business segment primarily includes Secured lending facilities and Commercial real estate loans. Lending activity in the U.S. Bank Subsidiaries from the Wealth Management business segment primarily includes Securities-based lending, which allows clients to borrow money against the value of qualifying securities, and Residential real estate loans.

For a further discussion of our credit risks, see “Quantitative and Qualitative Disclosures about Risk—Credit Risk.” For a further discussion about loans and lending commitments, see Notes 9 and 13 to the financial statements.

U.S. Bank Subsidiaries’ Supplemental Financial Information1


$ in billions	$ in billions	At March 31, 2022		At December 31, 2021		$ in billions	At March 31, 2023		At December 31, 2022
Investment securities portfolio:	Investment securities portfolio:					Investment securities portfolio:
Investment securities—AFS	Investment securities—AFS	$	69.3	$	81.6	Investment securities—AFS	$	67.6	$	66.9
Investment securities—HTM	Investment securities—HTM	60.6		61.7		Investment securities—HTM	55.7		56.4
Total investment securities	Total investment securities	$	129.9	$	143.3	Total investment securities	$	123.3	$	123.3
Wealth Management Loans2	Wealth Management Loans2					Wealth Management Loans2
Residential real estate	Residential real estate	$	47.2	$	44.2	Residential real estate	$	55.3	$	54.4
Securities-based lending and Other3	Securities-based lending and Other3	89.5		85.0		Securities-based lending and Other3	88.4		91.7
Total, net of ACL	Total, net of ACL	$	136.7	$	129.2	Total, net of ACL	$	143.7	$	146.1
Institutional Securities Loans2	Institutional Securities Loans2					Institutional Securities Loans2
Corporate	Corporate	$	7.0	$	6.5	Corporate	$	8.3	$	6.9
Secured lending facilities	Secured lending facilities	32.6		33.1		Secured lending facilities	38.3		37.1
Commercial and Residential real estate	Commercial and Residential real estate	11.7		10.4		Commercial and Residential real estate	10.5		10.2
Securities-based lending and Other	Securities-based lending and Other	6.8		6.3		Securities-based lending and Other	6.0		6.0
Total, net of ACL	Total, net of ACL	$	58.1	$	56.3	Total, net of ACL	$	63.1	$	60.2
Total Assets	Total Assets	$	390.0	$	386.1	Total Assets	$	384.8	$	391.0
Deposits4	Deposits4	$	352.1	$	346.2	Deposits4	$	340.9	$	350.6

1.Amounts exclude transactions between the bank subsidiaries, as well as deposits from the Parent Company and affiliates.

2.For a further discussion of loans in the Wealth Management and Institutional Securities business segments, see “Quantitative and Qualitative Disclosures about Risk—Credit Risk” herein.

3.Other loans primarily include tailored lending.

4.For further information on deposits, see “Liquidity and Capital Resources—Funding Management—Balance Sheet—Unsecured Financing” herein.

Accounting Development Updates

The Financial Accounting Standards Board has issued certain accounting updates that apply to us. Accounting updates not listed below were assessed and ~~either~~ determined to be either not applicable or to not have a material impact on our financial condition or results of operations upon adoption.

~~The~~We are currently evaluating the following accounting ~~updates are currently being evaluated, however,~~update; However, we do not expect a material impact on our financial condition or results of operations upon adoption:

•~~Financial Instruments—~~Investments—Tax Credit ~~Losses.~~ Structures. This accounting update ~~eliminates~~permits an election to account for tax equity investments using the ~~accounting guidance~~proportional amortization method if certain conditions are met. Under the proportional amortization method, the initial cost of the investment is amortized in proportion to the income tax credits and other income tax benefits received. The net amortization and income tax credits and other income tax benefits are recognized in the income statement as a component of provision for ~~Troubled Debt Restructurings (“TDRs”) and requires new disclosures regarding certain modifications of financing receivables (i.e., principal forgiveness, interest rate reductions, other-than-insignificant payment delays and term extensions) to borrowers experiencing financial difficulty.~~income taxes. The update also requires ~~disclosure~~disclosures of ~~current period gross charge-offs by year~~certain information that enable investors and other users of ~~origination~~our financial statements to understand the nature of (i) the tax equity investments in projects that generate income tax credits and other income tax benefits from a program for ~~financing receivables measured at amortized cost.~~which the proportional amortization method has been elected and (ii) the impact of the tax equity investments and related income tax credits on the financial condition and results of operations. The ASU iswill be effective January 1, ~~2023~~2024, with early adoption permitted.

•~~Derivatives and Hedging.~~ The accounting update allows entities to designate fair value hedging relationships to multiple layers in a closed portfolio of prepayable and non-prepayable financial assets. It also provides additional guidance on the accounting for and disclosure of hedge basis adjustments under the portfolio layer method. As of the adoption date, entities are permitted to reclassify HTM debt securities to AFS if the securities will be included in a closed portfolio that are designated in a portfolio layer method hedge. The ASU is effective January 1, 2023 with early adoption permitted.

Critical Accounting ~~Policies~~Estimates

Our financial statements are prepared in accordance with U.S. GAAP, which requires us to make estimates and assumptions (see Note 1 to the financial statements). We believe that of our significant accounting policies (see Note 2 to the financial statements in the ~~2021~~2022 Form 10-K and Note 2 to the financial statements), the fair value of financial instruments, goodwill and intangible assets, legal and regulatory contingencies (see Note 15 to the financial statements in the 2022 Form 10-K and Note 13 to the financial statements) and income taxes policies involve a higher degree of judgment and complexity. For a further discussion about our critical accounting policies, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting ~~Policies”~~Estimates” in the ~~2021~~2022 Form 10-K.

Liquidity and Capital Resources

Our liquidity and capital policies are established and maintained by senior management, with oversight by the Asset/Liability Management Committee and the Board of Directors (“Board”). Through various risk and control committees, senior management reviews business


~~March 2022 Form 10-Q~~			13


~~Table of Contents~~
~~Management’s Discussion and Analysis~~

performance relative to these policies, monitors the availability of alternative sources of financing, and oversees the liquidity, interest rate and currency sensitivity of our asset and liability position. Our Treasury department, Firm Risk Committee, Asset/Liability Management Committee, and other committees and control groups assist in evaluating, monitoring and ~~controlling~~managing the impact that our business activities have on our balance sheet, liquidity and capital structure. Liquidity and capital matters are reported regularly to the Board and the Risk Committee of the Board.


March 2023 Form 10-Q			13


Table of Contents
Management’s Discussion and Analysis

Balance Sheet

We monitor and evaluate the composition and size of our balance sheet on a regular basis. Our balance sheet management process includes quarterly planning, business-specific thresholds, monitoring of business-specific usage versus key performance metrics and new business impact assessments.

We establish balance sheet thresholds at the consolidated and business segment levels. We monitor balance sheet utilization and review variances resulting from business activity and market fluctuations. On a regular basis, we review current performance versus established thresholds and assess the need to re-allocate our balance sheet based on business segment needs. We also monitor key metrics, including asset and liability size and capital usage.

Total Assets by Business Segment


		At March 31, 2022									At March 31, 2023
$ in millions	$ in millions	IS		WM		IM		Total		$ in millions	IS		WM		IM		Total
Assets	Assets									Assets
Cash and cash equivalents	Cash and cash equivalents	$	98,944	$	36,603	$	539	$	136,086	Cash and cash equivalents	$	84,356	$	26,747	$	155	$	111,258
Trading assets at fair value	Trading assets at fair value	290,709		1,598		4,574		296,881		Trading assets at fair value	310,842		4,560		4,899		320,301
Investment securities	Investment securities	43,300		127,493		—		170,793		Investment securities	37,386		120,558		—		157,944
Securities purchased under agreements to resell	Securities purchased under agreements to resell	112,144		15,623		—		127,767		Securities purchased under agreements to resell	108,722		13,163		—		121,885
Securities borrowed	Securities borrowed	149,957		1,038		—		150,995		Securities borrowed	145,289		927		—		146,216
Customer and other receivables	Customer and other receivables	57,315		36,186		1,303		94,804		Customer and other receivables	43,973		28,907		1,215		74,095
Loans1	Loans1	59,542		136,713		5		196,260		Loans1	71,008		143,684		4		214,696
Other assets2	Other assets2	14,331		23,247		11,069		48,647		Other assets2	17,619		24,859		11,031		53,509
Total assets	Total assets	$	826,242	$	378,501	$	17,490	$	1,222,233	Total assets	$	819,195	$	363,405	$	17,304	$	1,199,904


		At December 31, 2021									At December 31, 2022
$ in millions	$ in millions	IS		WM		IM		Total		$ in millions	IS		WM		IM		Total
Assets	Assets									Assets
Cash and cash equivalents	Cash and cash equivalents	$	91,251	$	36,003	$	471	$	127,725	Cash and cash equivalents	$	88,362	$	39,539	$	226	$	128,127
Trading assets at fair value	Trading assets at fair value	288,405		1,921		4,543		294,869		Trading assets at fair value	294,884		1,971		4,460		301,315
Investment securities	Investment securities	41,407		141,591		—		182,998		Investment securities	40,481		119,450		—		159,931
Securities purchased under agreements to resell	Securities purchased under agreements to resell	112,267		7,732		—		119,999		Securities purchased under agreements to resell	102,511		11,396		—		113,907
Securities borrowed	Securities borrowed	128,154		1,559		—		129,713		Securities borrowed	132,619		755		—		133,374
Customer and other receivables	Customer and other receivables	57,009		37,643		1,366		96,018		Customer and other receivables	47,515		29,620		1,405		78,540
Loans1	Loans1	58,822		129,307		5		188,134		Loans1	67,676		146,105		4		213,785
Other assets2	Other assets2	14,820		22,682		11,182		48,684		Other assets2	15,789		24,469		10,994		51,252
Total assets	Total assets	$	792,135	$	378,438	$	17,567	$	1,188,140	Total assets	$	789,837	$	373,305	$	17,089	$	1,180,231

1.Amounts include loans held for investment, net of ACL, and loans held for sale but exclude loans at fair value, which are included in Trading assets in the balance sheet (see Note 9 to the financial statements).

2.Other assets primarily includes Goodwill and Intangible assets, premises, equipment and software, ROU assets related to leases, other investments, and deferred tax assets.

A substantial portion of total assets consists of cash and cash equivalents, liquid marketable securities and short-term receivables. In the Institutional Securities business segment, these arise from market-making, financing and prime brokerage activities, and in the Wealth Management business segment, these arise from banking activities, including management of the investment ~~portfolio, comprising Investment securities, Cash and cash equivalents and Securities purchased under agreements to resell.~~portfolio. Total assets of ~~$1,222~~$1,200 billion at March 31, ~~2022~~2023 were relatively unchanged from ~~$1,188~~$1,180 billion at December 31, ~~2021.~~2022.

Liquidity Risk Management Framework

The core components of our Liquidity Risk Management Framework are the Required Liquidity Framework, Liquidity Stress Tests and Liquidity Resources, which support our target liquidity profile. For a further discussion about the Firm’s Required Liquidity Framework and Liquidity Stress Tests, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Liquidity Risk Management Framework” in the ~~2021~~2022 Form 10-K.

At March 31, ~~2022~~2023 and December 31, ~~2021,~~2022, we maintained sufficient liquidity to meet current and contingent funding obligations as modeled in our Liquidity Stress Tests.

Liquidity Resources

We maintain sufficient liquidity resources, which consist of HQLA and cash deposits with banks (“Liquidity Resources”) to cover daily funding needs and to meet strategic liquidity targets sized by the Required Liquidity Framework and Liquidity Stress Tests. We actively manage the amount of our Liquidity Resources considering the following components: unsecured debt maturity profile; balance sheet size and composition; funding needs in a stressed environment, inclusive of contingent cash outflows; legal entity, regional and segment liquidity requirements; regulatory requirements; and collateral requirements.


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~~Management’s Discussion and Analysis~~

The amount of Liquidity Resources we hold is based on our risk appetite and is calibrated to meet various internal and regulatory requirements ~~as well as~~and to fund prospective business activities. The Liquidity Resources are primarily held within the Parent Company and its major operating subsidiaries. The Total HQLA values in the tables immediately following are different from Eligible HQLA, which, in accordance with the LCR rule, also takes into account certain regulatory weightings and other operational considerations.

Liquidity Resources by Type of Investment


							Average Daily Balance Three Months Ended
$ in millions	$ in millions	At March 31, 2022		At December 31, 2021		$ in millions	March 31, 2023		December 31, 2022
Cash deposits with central banks	Cash deposits with central banks	$	78,160	$	70,147	Cash deposits with central banks	$	65,677	$	58,818
Unencumbered HQLA Securities1:	Unencumbered HQLA Securities1:					Unencumbered HQLA Securities1:
U.S. government obligations	U.S. government obligations	122,646		154,879		U.S. government obligations	132,225		136,020
U.S. agency and agency mortgage-backed securities	U.S. agency and agency mortgage-backed securities	91,265		110,435		U.S. agency and agency mortgage-backed securities	92,219		87,591
Non-U.S. sovereign obligations2	Non-U.S. sovereign obligations2	22,522		11,959		Non-U.S. sovereign obligations2	21,113		20,583
Other investment grade securities	Other investment grade securities	648		607		Other investment grade securities	694		694
Total HQLA1	Total HQLA1	$	315,241	$	348,027	Total HQLA1	$	311,928	$	303,706
Cash deposits with banks (non-HQLA)	Cash deposits with banks (non-HQLA)	7,986		7,976		Cash deposits with banks (non-HQLA)	9,267		8,544
Total Liquidity Resources	Total Liquidity Resources	$	323,227	$	356,003	Total Liquidity Resources	$	321,195	$	312,250

1.HQLA is presented prior to applying weightings and includes all HQLA held in subsidiaries.

2.Primarily composed of unencumbered Japanese, French, U.K., ~~French~~Italian and ~~German~~Spanish government obligations.


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Management’s Discussion and Analysis

Liquidity Resources by Bank and Non-Bank Legal Entities


		At March 31, 2022		At December 31, 2021		Average Daily Balance Three Months Ended			Average Daily Balance Three Months Ended
$ in millions	$ in millions					March 31, 2022		$ in millions	March 31, 2023		December 31, 2022
Bank legal entities	Bank legal entities							Bank legal entities
U.S.	U.S.	$	160,425	$	171,642	$	165,108	U.S.	$	140,029	$	134,845
Non-U.S.	Non-U.S.	9,480		8,582		8,978		Non-U.S.	6,651		6,980
Total Bank legal entities	Total Bank legal entities	169,905		180,224		174,086		Total Bank legal entities	146,680		141,825
Non-Bank legal entities	Non-Bank legal entities							Non-Bank legal entities
U.S.:	U.S.:							U.S.:
Parent Company	Parent Company	35,496		60,391		44,846		Parent Company	52,315		56,111
Non-Parent Company	Non-Parent Company	58,073		52,932		59,925		Non-Parent Company	58,027		54,813
Total U.S.	Total U.S.	93,569		113,323		104,771		Total U.S.	110,342		110,924
Non-U.S.	Non-U.S.	59,753		62,456		59,424		Non-U.S.	64,173		59,501
Total Non-Bank legal entities	Total Non-Bank legal entities	153,322		175,779		164,195		Total Non-Bank legal entities	174,515		170,425
Total Liquidity Resources	Total Liquidity Resources	$	323,227	$	356,003	$	338,281	Total Liquidity Resources	$	321,195	$	312,250

Liquidity Resources may fluctuate from period to period based on the overall size and composition of our balance sheet, the maturity profile of our unsecured debt and estimates of funding needs in a stressed environment, among other factors.

Regulatory Liquidity Framework

Liquidity Coverage Ratio and Net Stable Funding Ratio

We and our U.S. Bank Subsidiaries are required to maintain a minimum LCR and NSFR of 100%. The LCR requires that large banking organizations have sufficient Eligible HQLA to cover net cash outflows arising from significant stress over 30 calendar days, thus promoting the short-term resilience of the liquidity risk profile of banking organizations. In determining Eligible HQLA for LCR purposes, weightings (or asset haircuts) are applied to HQLA, and certain HQLA held in subsidiaries is excluded. The NSFR requires large banking organizations to maintain sufficiently stable sources of funding over a one-year time horizon.

As of March 31, ~~2022,~~2023, we and our U.S. Bank Subsidiaries are compliant with the minimum LCR and NSFR requirements of 100%.

Liquidity Coverage Ratio


		Average Daily Balance Three Months Ended							Average Daily Balance Three Months Ended
$ in millions	$ in millions	March 31, 2022			December 31, 2021			$ in millions	March 31, 2023			December 31, 2022
Eligible HQLA1	Eligible HQLA1							Eligible HQLA1
Cash deposits with central banks	Cash deposits with central banks	$	63,336		$	54,606		Cash deposits with central banks	$	58,133		$	52,765
Securities2	Securities2	171,692			183,105			Securities2	185,375			186,551
Total Eligible HQLA1	Total Eligible HQLA1	$	235,028		$	237,711		Total Eligible HQLA1	$	243,508		$	239,316
LCR	LCR	130		%	134		%	LCR	135		%	132		%

1.Under the LCR rule, Eligible HQLA is calculated using weightings and excluding certain HQLA held in subsidiaries.

2.Primarily includes U.S. Treasuries, U.S. agency mortgage-backed securities, sovereign bonds and investment grade corporate bonds.

Funding Management

We manage our funding in a manner that reduces the risk of disruption to our operations. We pursue a strategy of diversification of secured and unsecured funding sources (by product, investor and region) and attempt to ensure that the tenor of our liabilities equals or exceeds the expected holding period of the assets being financed. Our goal is to achieve an optimal mix of durable secured and unsecured financing.

We fund our balance sheet on a global basis through diverse sources. These sources include our equity capital, borrowings, bank notes, securities sold under agreements to repurchase, securities lending, deposits, letters of credit and lines of credit. We have active financing programs for both standard and structured products targeting global investors and currencies.

Secured Financing

For a discussion of our secured financing activities, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Funding Management—Secured Financing” in the ~~2021~~2022 Form 10-K.


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~~Table of Contents~~
~~Management’s Discussion and Analysis~~

Collateralized Financing Transactions


$ in millions	$ in millions	At March 31, 2022		At December 31, 2021		$ in millions	At March 31, 2023		At December 31, 2022
Securities purchased under agreements to resell and Securities borrowed	Securities purchased under agreements to resell and Securities borrowed	$	278,762	$	249,712	Securities purchased under agreements to resell and Securities borrowed	$	268,101	$	247,281
Securities sold under agreements to repurchase and Securities loaned	Securities sold under agreements to repurchase and Securities loaned	$	74,290	$	74,487	Securities sold under agreements to repurchase and Securities loaned	$	76,079	$	78,213
Securities received as collateral1	Securities received as collateral1	$	7,844	$	10,504	Securities received as collateral1	$	9,867	$	9,954


		Average Daily Balance Three Months Ended					Average Daily Balance Three Months Ended
$ in millions	$ in millions	March 31, 2022		December 31, 2021		$ in millions	March 31, 2023		December 31, 2022
Securities purchased under agreements to resell and Securities borrowed	Securities purchased under agreements to resell and Securities borrowed	$	259,971	$	236,327	Securities purchased under agreements to resell and Securities borrowed	$	254,449	$	261,627
Securities sold under agreements to repurchase and Securities loaned	Securities sold under agreements to repurchase and Securities loaned	$	72,387	$	69,565	Securities sold under agreements to repurchase and Securities loaned	$	77,154	$	77,268

1.Included within Trading assets in the balance sheet.

See “Total Assets by Business Segment” herein for additional information on the assets shown in the previous table and Note 2 to the financial statements in the ~~2021~~2022 Form 10-K and Note 8 to the financial statements for additional information on collateralized financing transactions.

In addition to the collateralized financing transactions shown in the previous table, we engage in financing transactions collateralized by customer-owned securities, which are segregated in accordance with regulatory requirements. Receivables under these financing transactions, primarily margin loans, are included in Customer and other receivables in the balance sheet, and payables under these financing transactions, primarily to prime brokerage customers, are included in Customer and other payables in the balance sheet. Our risk exposure on these transactions is mitigated by


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Management’s Discussion and Analysis

collateral maintenance policies and the elements of our Liquidity Risk Management Framework.

Unsecured Financing

For a discussion of our unsecured financing activities, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Funding Management—Unsecured Financing” in the ~~2021~~2022 Form 10-K.

Deposits


$ in millions	$ in millions	At March 31, 2022		At December 31, 2021		$ in millions	At March 31, 2023		At December 31, 2022
Savings and demand deposits:	Savings and demand deposits:					Savings and demand deposits:
Brokerage sweep deposits1	Brokerage sweep deposits1	$	316,044	$	298,352	Brokerage sweep deposits1	$	175,448	$	202,592
Savings and other	Savings and other	32,607		34,395		Savings and other	122,882		117,356
Total Savings and demand deposits	Total Savings and demand deposits	348,651		332,747		Total Savings and demand deposits	298,330		319,948
Time deposits	Time deposits	12,189		14,827		Time deposits	49,193		36,698
Total2	Total2	$	360,840	$	347,574	Total2	$	347,523	$	356,646

1.Amounts represent balances swept from client brokerage accounts.

2.Excludes approximately $8$2 billion and $9$6 billion of off-balance sheet deposits at unaffiliated financial institutions as of March 31, ~~2022~~2023 and December 31, ~~2021,~~2022, respectively. This client cash held by third parties is not reflected in our balance sheet and is not immediately available for liquidity purposes.

Deposits are primarily sourced from our Wealth Management clients and are considered to have stable, low-cost funding

~~characteristics. Total~~ characteristics relative to other sources of funding. Each category of deposits ~~were relatively unchanged~~presented above has a different cost profile and clients may respond differently to changes in interest rates and other macroeconomic conditions. The decrease in total deposits in the current ~~quarter.~~quarter was primarily driven by a continued reduction in Brokerage sweep deposits due to net outflows to alternative cash-equivalent and long-term products, partially offset by an increase in Time deposits and Savings.

Borrowings by Remaining Maturity at March 31, ~~2022~~20231


$ in millions	$ in millions	Parent Company		Subsidiaries		Total		$ in millions	Parent Company		Subsidiaries		Total
Original maturities of one year or less	Original maturities of one year or less	$	—	$	4,146	$	4,146	Original maturities of one year or less	$	—	$	4,587	$	4,587
Original maturities greater than one year	Original maturities greater than one year							Original maturities greater than one year
2022		$	7,034	$	5,273	$	12,307
2023	2023	13,710		7,555		21,265		2023	$	4,504	$	6,418	$	10,922
2024	2024	20,066		8,779		28,845		2024	19,858		11,897		31,755
2025	2025	19,821		7,121		26,942		2025	21,666		9,428		31,094
2026	2026	19,652		5,537		25,189		2026	24,066		6,267		30,333
2027								2027	18,855		6,876		25,731
Thereafter	Thereafter	85,382		25,741		111,123		Thereafter	85,715		30,045		115,760
Total	Total	$	165,665	$	60,006	$	225,671	Total	$	174,664	$	70,931	$	245,595
Total Borrowings	Total Borrowings	$	165,665	$	64,152	$	229,817	Total Borrowings	$	174,664	$	75,518	$	250,182
Maturities over next 12 months2	Maturities over next 12 months2					$	21,328	Maturities over next 12 months2					$	20,382

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.

Borrowings of ~~$230~~$250 billion as of March 31, ~~2022~~2023 were relatively unchanged when compared with ~~$233~~$238 billion at December 31, ~~2021.~~2022.

We believe that accessing debt investors through multiple distribution channels helps provide consistent access to the

unsecured markets. In addition, the issuance of borrowings with original maturities greater than one year allows us to reduce reliance on short-term credit sensitive instruments. Borrowings with original maturities greater than one year are generally managed to achieve staggered maturities, thereby mitigating refinancing risk, and to maximize investor diversification through sales to global institutional and retail clients across regions, currencies and product types.

The availability and cost of financing to us can vary depending on market conditions, the volume of certain trading and lending activities, our credit ratings and the overall availability of credit. We also engage in, and may continue to engage in, ~~repurchases~~repurchases of our borrowings as part of our market-making activities.

For further information on Borrowings, see Note 12 to the financial statements.

Credit Ratings

We rely on external sources to finance a significant portion of our daily operations. Our credit ratings are one of the factors in the cost and availability of financing and can have an impact on certain trading revenues, particularly in those businesses where longer-term counterparty performance is a key consideration, such as certain OTC derivative transactions. When determining credit ratings, rating agencies consider both company-specific and industry-wide factors. See also “Risk Factors—Liquidity Risk” in the ~~2021~~2022 Form 10-K.


			16			~~March 2022 Form 10-Q~~


~~Table of Contents~~
~~Management’s Discussion and Analysis~~

Parent Company and U.S. Bank Subsidiaries Issuer Ratings at April ~~29, 2022~~28, 2023


	Parent Company
	Short-Term Debt	Long-Term Debt	Rating Outlook
DBRS, Inc.	R-1 (middle)	A (high)	Stable
Fitch Ratings, Inc.	F1	AA+	~~Positive~~Stable
Moody’s Investors Service, Inc.	P-1	A1	Stable
Rating and Investment Information, Inc.	a-1	A	~~Stable~~Positive
S&P Global Ratings	A-2	~~BBB+~~A-	~~Positive~~Stable


	MSBNA
	Short-Term Debt	Long-Term Debt	Rating Outlook
Fitch Ratings, Inc.	F1F1+	A+AA-	~~Positive~~Stable
Moody’s Investors Service, Inc.	P-1	Aa3	Stable
S&P Global Ratings	A-1	A+	Stable


	MSPBNA
	Short-Term Debt	Long-Term Debt	Rating Outlook
Moody’s Investors Service, Inc.	P-1	Aa3	Stable
S&P Global Ratings	A-1	A+	Stable

Incremental Collateral or Terminating Payments

In connection with certain OTC derivatives and certain other agreements where we are a liquidity provider to certain financing vehicles associated with the Institutional Securities business segment, we may be required to provide additional


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Management’s Discussion and Analysis

collateral, immediately settle any outstanding liability balances with certain counterparties or pledge additional collateral to certain clearing organizations in the event of a future credit rating downgrade irrespective of whether we are in a net asset or net liability position. See Note 6 to the financial statements for additional information on OTC derivatives that contain such contingent features.

While certain aspects of a credit rating downgrade are quantifiable pursuant to contractual provisions, the impact it would have on our business and results of operations in future periods is inherently uncertain and would depend on a number of interrelated factors, including, among other things, the magnitude of the downgrade, the rating relative to peers, the rating assigned by the relevant agency ~~pre-downgrade,~~before the downgrade, individual client behavior and future mitigating actions we might take. The liquidity impact of additional collateral requirements is included in our Liquidity Stress Tests.

Capital Management

We view capital as an important source of financial strength and actively manage our consolidated capital position based upon, among other things, business opportunities, risks, capital availability and rates of return together with internal capital policies, regulatory requirements and rating agency guidelines. In the future, we may expand or contract our capital base to address the changing needs of our businesses.

Common Stock Repurchases


		Three Months Ended March 31,					Three Months Ended March 31,
in millions, except for per share data	in millions, except for per share data	2022		2021		in millions, except for per share data		2023		2022
Number of shares	Number of shares	30		28		Number of shares		16		30
Average price per share	Average price per share	$	95.20	$	77.47	Average price per share		$	95.16	$	95.20
Total	Total	$	2,872	$	2,135	Total		$	1,500	$	2,872

For additional information on our common stock repurchases, see “Liquidity and Capital Resources—Regulatory Requirements—Capital Plans, Stress Tests and the Stress Capital Buffer” herein and Note 16 to the financial statements.

For a description of our capital plan, see “Liquidity and Capital Resources—Regulatory Requirements—Capital Plans, Stress Tests and the Stress Capital Buffer” herein.

Common Stock Dividend Announcement


Announcement date			April ~~14, 2022~~19, 2023
Amount per share			$~~0.70~~0.775
Date to be paid			May ~~13, 2022~~15, 2023
Shareholders of record as of			~~April 29, 2022~~May 1, 2023

For additional information on our common stock dividends, see “Liquidity and Capital Resources—Regulatory Requirements—Capital Plans, Stress Tests and the Stress Capital Buffer” herein.

For additional information on our common stock and information on our preferred stock, see Note 16 to the financial statements.

Off-Balance Sheet Arrangements

We enter into various off-balance sheet arrangements, including through unconsolidated SPEs and lending-related financial instruments (e.g., guarantees and commitments), primarily in connection with the Institutional Securities and Investment Management business segments.

We utilize SPEs primarily in connection with securitization activities. For information on our securitization activities, see Note 16 to the financial statements in the ~~2021~~2022 Form 10-K.

For information on our commitments, obligations under certain guarantee arrangements and indemnities, see Note 13 to the financial statements. For a further discussion of our lending commitments, see “Quantitative and Qualitative Disclosures about Risk—Credit Risk—Loans and Lending Commitments” herein.

Regulatory Requirements

Regulatory Capital Framework

We are an FHC under the Bank Holding Company Act of 1956, as amended (“BHC Act”) and are subject to the regulation and oversight of the Federal Reserve. The Federal Reserve establishes capital requirements for us, including “well-capitalized” standards, and evaluates our compliance


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~~Management’s Discussion and Analysis~~

with such capital requirements. The OCC establishes similar capital requirements and standards for our U.S. Bank Subsidiaries. The regulatory capital requirements are largely based on the Basel III capital standards established by the Basel Committee and also implement certain provisions of the Dodd-Frank Act. For us to remain an FHC, we must remain well-capitalized in accordance with standards established by the Federal Reserve, and our U.S. Bank Subsidiaries must remain well-capitalized in accordance with standards established by the OCC. In addition, many of our regulated subsidiaries are subject to regulatory capital requirements, including regulated subsidiaries provisionally registered as swap dealers with the CFTC or conditionally registered as security-based swap dealers with the SEC or registered as broker-dealers or futures commission merchants. For additional information on regulatory capital requirements for our U.S. Bank Subsidiaries, as well as our subsidiaries that are Swap Entities, see Note 15 to the financial statements.

Regulatory Capital Requirements

We are required to maintain minimum risk-based and leverage-based capital and TLAC ratios. For more information, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Regulatory Capital Requirements” in the ~~2021~~2022 Form 10-K. For additional information on TLAC,


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see “Total Loss-Absorbing Capacity, Long-Term Debt and Clean Holding Company Requirements” herein.

Risk-Based Regulatory Capital. Risk-based capital ratio requirements apply to Common Equity Tier 1 capital, Tier 1 capital and Total capital (which includes Tier 2 capital), each as a percentage of RWA, and consist of regulatory minimum required ratios plus our capital buffer requirement. Capital requirements require certain adjustments to, and deductions from, capital for purposes of determining these ratios.

Risk-Based Regulatory Capital Ratio Requirements

At March 31, 2022 and December 31, 2021

At March 31, 2023 and December 31, 2022

Standardized

Advanced

Standardized

Advanced

Capital buffers

Capital conservation buffer

—

2.5%

Capital conservation buffer

—

2.5%

SCB1

5.7%

N/A

SCB1

5.8%

N/A

G-SIB capital surcharge2

3.0%

G-SIB capital surcharge2

3.0%

CCyB3

Capital buffer requirement

8.7%

5.5%

Capital buffer requirement

8.8%

5.5%

1.For additional information on the SCB, see “Capital Plans, Stress Tests and the Stress Capital Buffer” herein and in the ~~2021~~2022 Form 10-K.

2.For a further discussion of the G-SIB capital surcharge, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Regulatory Requirements—G-SIB Capital Surcharge” in the ~~2021~~2022 Form 10-K.

3.The CCyB can be set up to 2.5%, but is currently set by the Federal Reserve at zero.

The capital buffer requirement represents the amount of Common Equity Tier 1 capital we must maintain above the minimum risk-based capital requirements in order to avoid restrictions on our ability to make capital distributions, including the payment of dividends and the repurchase of

stock, and to pay discretionary bonuses to executive officers. Our ~~Standardized Approach~~ capital buffer requirement computed under the standardized approaches for calculating credit risk and market RWAs (“Standardized Approach”) is equal to the sum of our SCB, G-SIB capital surcharge and CCyB, and our ~~Advanced Approach~~ capital buffer requirement computed under the applicable advanced approaches for calculating credit risk, market risk and operational risk RWAs (“Advanced Approach”) is equal to our 2.5% capital conservation buffer, G-SIB capital surcharge and CCyB.


		Regulatory Minimum		At March 31, 2022 and December 31, 2021		Regulatory Minimum		At March 31, 2023 and December 31, 2022
				Standardized	Advanced			Regulatory Minimum		Standardized	Advanced
Required ratios1	Required ratios1						Required ratios1
Common Equity Tier 1 capital ratio	Common Equity Tier 1 capital ratio	4.5	%	13.2%	10.0%		Common Equity Tier 1 capital ratio	4.5	%	13.3%	10.0%
Tier 1 capital ratio	Tier 1 capital ratio	6.0	%	14.7%	11.5%		Tier 1 capital ratio	6.0	%	14.8%	11.5%
Total capital ratio	Total capital ratio	8.0	%	16.7%	13.5%		Total capital ratio	8.0	%	16.8%	13.5%

1.Required ratios represent the regulatory minimum plus the capital buffer requirement.

Our risk-based capital ratios are computed under each of (i) the ~~standardized approaches for calculating credit risk and market risk RWA (“~~Standardized ~~Approach”)~~Approach and (ii) the ~~applicable advanced approaches for calculating credit risk, market risk and operational risk RWA (“~~Advanced ~~Approach”).~~Approach. The credit risk RWA calculations between the two approaches differ in that the Standardized Approach requires calculation of RWA using prescribed risk weights and exposure methodologies, whereas the Advanced Approach utilizes models to calculate exposure amounts and risk

weights. At March 31, ~~2022~~2023 and December 31, ~~2021,~~2022, the differences between the actual and required ratios were lower under the Standardized Approach.

Leverage-Based Regulatory Capital. Leverage-based capital requirements include a minimum Tier 1 leverage ratio of 4%, a minimum SLR of 3% and an enhanced SLR capital buffer of at least 2%.

CECL Deferral. AsBeginning on January 1, 2020, we elected to defer the effect of ~~December 31, 2021,~~the adoption of CECL on our risk-based and leverage-based capital amounts and ratios, as well as our RWA, adjusted average assets and supplementary leverage exposure ~~were calculated excluding the effect of the adoption of CECL based on our election to defer this effect~~calculations, over a five-year transition ~~period that began on January 1, 2020. In 2022 the~~period. The deferral impacts began to phase in at 25% per year from January 1, 2022 and are phased-in at 50% from January 1, 2023. The deferral impacts will become fully phased-in beginning inon January 1, 2025.

Regulatory Capital Ratios

$ in millions
Required
Ratio1
At March 31,
2022 At December 31, 2021
Risk-based capital—
Standardized
Common Equity Tier 1 capital $ 72,477 $ 75,742
Tier 1 capital 80,121 83,348
Total capital 89,468 93,166
Total RWA 501,429 471,921
Common Equity Tier 1 capital ratio 13.2 % 14.5 % 16.0 %
Tier 1 capital ratio 14.7 % 16.0 % 17.7 %
Total capital ratio 16.7 % 17.8 % 19.7 %


$ in millions	Required Ratio1		At March 31, 2023			At December 31, 2022
Risk-based capital— Standardized
Common Equity Tier 1 capital			$	69,454		$	68,670
Tier 1 capital			77,947			77,191
Total capital			89,794			86,575
Total RWA			459,107			447,849
Common Equity Tier 1 capital ratio	13.3	%	15.1		%	15.3		%
Tier 1 capital ratio	14.8	%	17.0		%	17.2		%
Total capital ratio	16.8	%	19.6		%	19.3		%


			18			~~March 2022 Form 10-Q~~


~~Table of Contents~~
~~Management’s Discussion and Analysis~~


$ in millions	$ in millions	Required Ratio1		At March 31, 2022			At December 31, 2021			$ in millions	Required Ratio1		At March 31, 2023			At December 31, 2022
Risk-based capital— Advanced	Risk-based capital— Advanced									Risk-based capital— Advanced
Common Equity Tier 1 capital	Common Equity Tier 1 capital			$	72,477		$	75,742		Common Equity Tier 1 capital			$	69,454		$	68,670
Tier 1 capital	Tier 1 capital			80,121			83,348			Tier 1 capital			77,947			77,191
Total capital	Total capital			89,129			92,927			Total capital			89,321			86,159
Total RWA	Total RWA			456,524			435,749			Total RWA			444,796			438,806
Common Equity Tier 1 capital ratio	Common Equity Tier 1 capital ratio	10.0	%	15.9		%	17.4		%	Common Equity Tier 1 capital ratio	10.0	%	15.6		%	15.6		%
Tier 1 capital ratio	Tier 1 capital ratio	11.5	%	17.6		%	19.1		%	Tier 1 capital ratio	11.5	%	17.5		%	17.6		%
Total capital ratio	Total capital ratio	13.5	%	19.5		%	21.3		%	Total capital ratio	13.5	%	20.1		%	19.6		%

$ in millions	$ in millions	Required Ratio1		At March 31, 2022			At December 31, 2021			$ in millions	Required Ratio1		At March 31, 2023			At December 31, 2022
Leverage-based capital	Leverage-based capital									Leverage-based capital
Adjusted average assets2	Adjusted average assets2			$	1,184,494		$	1,169,939		Adjusted average assets2			$	1,168,328		$	1,150,772
Tier 1 leverage ratio	Tier 1 leverage ratio	4.0	%	6.8		%	7.1		%	Tier 1 leverage ratio	4.0	%	6.7		%	6.7		%
Supplementary leverage exposure3	Supplementary leverage exposure3			$	1,466,624		$	1,476,962		Supplementary leverage exposure3			$	1,422,808		$	1,399,403
SLR	SLR	5.0	%	5.5		%	5.6		%	SLR	5.0	%	5.5		%	5.5		%

1.Required ratios are inclusive of any buffers applicable as of the date presented.

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 for the quarters ending on the respective balance sheet dates, reduced by disallowed goodwill, intangible assets, investments in covered funds, defined benefit pension plan assets, after-tax gain on sale from assets sold into securitizations, investments in our own capital instruments, certain deferred tax assets and other capital deductions.

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.


			18			March 2023 Form 10-Q


Table of Contents
Management’s Discussion and Analysis

Regulatory Capital


$ in millions	$ in millions	At March 31, 2022		At December 31, 2021		Change		$ in millions	At March 31, 2023		At December 31, 2022		Change
Common Equity Tier 1 capital	Common Equity Tier 1 capital							Common Equity Tier 1 capital
Common stock and surplus	Common stock and surplus	$	8,331	$	11,361	$	(3,030)	Common stock and surplus	$	1,395	$	2,782	$	(1,387)
Retained earnings	Retained earnings	91,907		89,679		2,228		Retained earnings	96,516		95,047		1,469
AOCI	AOCI	(4,902)		(3,102)		(1,800)		AOCI	(5,711)		(6,253)		542
Regulatory adjustments and deductions:	Regulatory adjustments and deductions:							Regulatory adjustments and deductions:
Net goodwill	Net goodwill	(16,610)		(16,641)		31		Net goodwill	(16,388)		(16,393)		5
Net intangible assets	Net intangible assets	(6,610)		(6,704)		94		Net intangible assets	(5,914)		(6,048)		134
Other adjustments and deductions1	Other adjustments and deductions1	361		1,149		(788)		Other adjustments and deductions1	(444)		(465)		21
Total Common Equity Tier 1 capital	Total Common Equity Tier 1 capital	$	72,477	$	75,742	$	(3,265)	Total Common Equity Tier 1 capital	$	69,454	$	68,670	$	784
Additional Tier 1 capital	Additional Tier 1 capital							Additional Tier 1 capital
Preferred stock	Preferred stock	$	7,750	$	7,750	$	—	Preferred stock	$	8,750	$	8,750	$	—
Noncontrolling interests	Noncontrolling interests	572		562		10		Noncontrolling interests	571		552		19
Additional Tier 1 capital	Additional Tier 1 capital	$	8,322	$	8,312	$	10	Additional Tier 1 capital	$	9,321	$	9,302	$	19
Deduction for investments in covered funds	Deduction for investments in covered funds	(678)		(706)		28		Deduction for investments in covered funds	(828)		(781)		(47)
Total Tier 1 capital	Total Tier 1 capital	$	80,121	$	83,348	$	(3,227)	Total Tier 1 capital	$	77,947	$	77,191	$	756
Standardized Tier 2 capital	Standardized Tier 2 capital							Standardized Tier 2 capital
Subordinated debt	Subordinated debt	$	8,119	$	8,609	$	(490)	Subordinated debt	$	9,997	$	7,846	$	2,151

Eligible ACL	Eligible ACL	1,329		1,155		174		Eligible ACL	1,898		1,613		285
Other adjustments and deductions	Other adjustments and deductions	(101)		54		(155)		Other adjustments and deductions	(48)		(75)		27
Total Standardized Tier 2 capital	Total Standardized Tier 2 capital	$	9,347	$	9,818	$	(471)	Total Standardized Tier 2 capital	$	11,847	$	9,384	$	2,463
Total Standardized capital	Total Standardized capital	$	89,468	$	93,166	$	(3,698)	Total Standardized capital	$	89,794	$	86,575	$	3,219
Advanced Tier 2 capital	Advanced Tier 2 capital							Advanced Tier 2 capital
Subordinated debt	Subordinated debt	$	8,119	$	8,609	$	(490)	Subordinated debt	$	9,997	$	7,846	$	2,151

Eligible credit reserves	Eligible credit reserves	990		916		74		Eligible credit reserves	1,425		1,197		228
Other adjustments and deductions	Other adjustments and deductions	(101)		54		(155)		Other adjustments and deductions	(48)		(75)		27
Total Advanced Tier 2 capital	Total Advanced Tier 2 capital	$	9,008	$	9,579	$	(571)	Total Advanced Tier 2 capital	$	11,374	$	8,968	$	2,406
Total Advanced capital	Total Advanced capital	$	89,129	$	92,927	$	(3,798)	Total Advanced capital	$	89,321	$	86,159	$	3,162

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.


~~March 2022 Form 10-Q~~			19


~~Table of Contents~~
~~Management’s Discussion and Analysis~~

RWA Rollforward


		Three Months Ended March 31, 2022					Three Months Ended March 31, 2023
$ in millions	$ in millions	Standardized		Advanced		$ in millions	Standardized		Advanced
Credit risk RWA	Credit risk RWA					Credit risk RWA
Balance at December 31, 2021		$	416,502	$	285,247
Balance at December 31, 2022						Balance at December 31, 2022	$	397,275	$	285,638
Change related to the following items:	Change related to the following items:					Change related to the following items:
Derivatives	Derivatives	13,678		12,933		Derivatives	1,388		1,399
Securities financing transactions	Securities financing transactions	8,826		2,692		Securities financing transactions	4,672		1,842

Investment securities	Investment securities	(1,586)		(4,303)		Investment securities	(290)		77
Commitments, guarantees and loans	Commitments, guarantees and loans	6,926		116		Commitments, guarantees and loans	(1,968)		1,374

Equity investments	Equity investments	(2,465)		(2,568)		Equity investments	(370)		(380)
Other credit risk	Other credit risk	3,945		4,863		Other credit risk	5,258		4,714
Total change in credit risk RWA	Total change in credit risk RWA	$	29,324	$	13,733	Total change in credit risk RWA	$	8,690	$	9,026
Balance at March 31, 2022		$	445,826	$	298,980
Balance at March 31, 2023						Balance at March 31, 2023	$	405,965	$	294,664
Market risk RWA	Market risk RWA					Market risk RWA
Balance at December 31, 2021		$	55,419	$	55,419
Balance at December 31, 2022						Balance at December 31, 2022	$	50,574	$	50,563
Change related to the following items:	Change related to the following items:					Change related to the following items:
Regulatory VaR	Regulatory VaR	277		277		Regulatory VaR	242		242
Regulatory stressed VaR	Regulatory stressed VaR	2,564		2,564		Regulatory stressed VaR	(1,042)		(1,042)
Incremental risk charge	Incremental risk charge	(230)		(230)		Incremental risk charge	(405)		(405)
Comprehensive risk measure	Comprehensive risk measure	(395)		(527)		Comprehensive risk measure	24		(84)
Specific risk	Specific risk	(2,032)		(2,032)		Specific risk	3,749		3,749

Total change in market risk RWA	Total change in market risk RWA	$	184	$	52	Total change in market risk RWA	$	2,568	$	2,460
Balance at March 31, 2022		$	55,603	$	55,471
Balance at March 31, 2023						Balance at March 31, 2023	$	53,142	$	53,023
Operational risk RWA	Operational risk RWA					Operational risk RWA
Balance at December 31, 2021		N/A		$	95,083
Balance at December 31, 2022						Balance at December 31, 2022	N/A		$	102,605
Change in operational risk RWA	Change in operational risk RWA	N/A		6,990		Change in operational risk RWA	N/A		(5,496)
Balance at March 31, 2022		N/A		$	102,073
Balance at March 31, 2023						Balance at March 31, 2023	N/A		$	97,109
Total RWA	Total RWA	$	501,429	$	456,524	Total RWA	$	459,107	$	444,796

Regulatory VaR—VaR for regulatory capital requirements

In the current quarter, Credit risk RWA increased under both the Standardized and Advanced Approaches, primarily driven by higher deferred tax assets, higher Securities financing and increased exposure in interest rate Derivatives.

Market risk RWA increased in the current quarter under both the Standardized and Advanced Approaches ~~due to larger foreign exchange~~primarily driven by higher Specific risk securitization and ~~commodities Derivatives exposure and increased client activity in Securities financing transactions,~~non-securitization standardized charges partially offset by ~~decreases in Investment securities and Equity investments. RWA under the Standardized Approach also increased due to lending growth.~~lower Regulatory Stressed VaR.

~~Market risk RWA was relatively unchanged in the current quarter under both the Standardized and Advanced Approaches.~~

The ~~increase~~decrease in Operational risk RWA in the current ~~quarter~~year period reflects ~~growth in litigation and~~lower execution-related losses.

Total Loss-Absorbing Capacity, Long-Term Debt and Clean Holding Company Requirements

The Federal Reserve has established external TLAC, long-term debt (“LTD”) and clean holding company requirements for top-tier BHCs of U.S. G-SIBs (“covered BHCs”), including the Parent Company. These requirements are designed to ensure that covered BHCs will have enough loss-absorbing resources at the point of failure to be recapitalized through the conversion of eligible LTD to equity or otherwise by imposing losses on eligible LTD or other forms of TLAC where an SPOE resolution strategy is used.


March 2023 Form 10-Q			19


Table of Contents
Management’s Discussion and Analysis

Required and Actual TLAC and Eligible LTD Ratios


						Actual Amount/Ratio											Actual Amount/Ratio
$ in millions	$ in millions	Regulatory Minimum		Required Ratio1		At March 31, 2022			At December 31, 2021			$ in millions	Regulatory Minimum		Required Ratio1		At March 31, 2023			At December 31, 2022
External TLAC2	External TLAC2					$	230,546		$	235,681		External TLAC2					$	250,191		$	245,951
External TLAC as a % of RWA	External TLAC as a % of RWA	18.0	%	21.5	%	46.0		%	49.9		%	External TLAC as a % of RWA	18.0	%	21.5	%	54.5		%	54.9		%
External TLAC as a % of leverage exposure	External TLAC as a % of leverage exposure	7.5	%	9.5	%	15.7		%	16.0		%	External TLAC as a % of leverage exposure	7.5	%	9.5	%	17.6		%	17.6		%
Eligible LTD3	Eligible LTD3					$	144,959		$	144,659		Eligible LTD3					$	162,775		$	159,444
Eligible LTD as a % of RWA	Eligible LTD as a % of RWA	9.0	%	9.0	%	28.9		%	30.7		%	Eligible LTD as a % of RWA	9.0	%	9.0	%	35.5		%	35.6		%
Eligible LTD as a % of leverage exposure	Eligible LTD as a % of leverage exposure	4.5	%	4.5	%	9.9		%	9.8		%	Eligible LTD as a % of leverage exposure	4.5	%	4.5	%	11.4		%	11.4		%

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 each respective balance sheet date.

We are in compliance with all TLAC requirements as of March 31, ~~2022~~2023 and December 31, ~~2021.~~2022.

For a further discussion of TLAC and related requirements, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Regulatory Requirements—Total Loss-Absorbing Capacity, Long-Term Debt and Clean Holding Company Requirements” in the ~~2021~~2022 Form 10-K.

Capital Plans, Stress Tests and the Stress Capital Buffer

The Federal Reserve has capital planning and stress test requirements for large BHCs, which form part of the Federal Reserve’s annual CCAR framework.

We must submit, on at least an annual basis, a capital plan to the Federal Reserve, taking into account the results of separate annual stress tests designed by us and the Federal Reserve, so that the Federal Reserve may assess our systems and processes that incorporate forward-looking projections of revenues and losses to monitor and maintain our internal capital adequacy. As banks with less than $250 billion of total assets, our U.S. Bank Subsidiaries are not subject to company-run stress test regulatory requirements.

As part of its annual capital supervisory stress testing process, the Federal Reserve determines an SCB for each large BHC, including us.

Our SCB will remain at ~~5.7%~~5.8% through September 30, ~~2022.~~2023. Together with other features of the regulatory capital framework, this SCB results in an aggregate Standardized Approach Common Equity Tier 1 required ratio of ~~13.2%~~13.3%.

Our Board of Directors ~~authorized the~~approved a new multi-year repurchase authorization of up to ~~$12~~$20 billion of outstanding common stock, ~~from July 1, 2021 through June 30,~~without a set expiration date, beginning in the third quarter of 2022, which will be exercised from time to time as conditions warrant.


			20			~~March 2022 Form 10-Q~~


~~Table of Contents~~
~~Management’s Discussion and Analysis~~

For further information, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Regulatory Requirements—Capital Plans, Stress Tests and the Stress Capital Buffer” in the 2021 Form 10-K.

For the ~~2022~~2023 capital planning and stress test cycle, we submitted our capital plan and company-run stress test results to the Federal Reserve on April 5, ~~2022.~~2023. The Federal Reserve is expected to publish summary results of the CCAR and Dodd-Frank Act supervisory stress tests of each large BHC, including us, by June 30, ~~2022.~~2023. We are required to disclose a summary of the results of our company-run stress tests within 15 days of the date the Federal Reserve discloses the results of the supervisory stress tests.

For additional information, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Regulatory Requirements—Capital Plans, Stress Tests and the Stress Capital Buffer” in the 2022 Form 10-K.

Attribution of Average Common Equity According to the Required Capital Framework

Our required capital (“Required Capital”) estimation is based on the Required Capital framework, an internal capital adequacy measure. Common equity attribution to the business segments is based on capital usage calculated under the Required Capital framework, as well as each business segment’s relative contribution to our total Required Capital.

The Required Capital framework is a risk-based and leverage-based capital measure, which is compared with our regulatory capital to ensure that we maintain an amount of going concern capital after absorbing potential losses from stress events, where applicable, at a point in time. The amount of capital allocated to the business segments is generally set at the beginning of each year and remains fixed throughout the year until the next annual reset unless a significant business change occurs (e.g., acquisition or disposition). We define the difference between our total average common equity and the sum of the average common equity amounts allocated to our business segments as Parent common equity. We generally hold Parent common equity for prospective regulatory requirements, organic growth, potential future acquisitions and other capital needs.

Average Common Equity Attribution under the Required Capital Framework1


		Three Months Ended March 31,						Three Months Ended March 31,
$ in billions	$ in billions		2022		2021		$ in billions		2023		2022
Institutional Securities	Institutional Securities		$	48.8	$	43.5	Institutional Securities		$	45.6	$	48.8
Wealth Management	Wealth Management		31.0		28.5		Wealth Management		28.8		31.0
Investment Management2			10.6		4.4
Investment Management							Investment Management		10.4		10.6
Parent	Parent		6.3		17.9		Parent		6.6		6.3
Total	Total		$	96.7	$	94.3	Total		$	91.4	$	96.7

1.The attribution of average common equity to the business segments is a non-GAAP financial measure. See “Selected Non-GAAP Financial Information” herein.

~~2. The total average common equity and the allocation to the Investment Management business segment in 2021 reflect the Eaton Vance acquisition on March 1, 2021.~~

We continue to evaluate our Required Capital framework with respect to the impact of evolving regulatory requirements, as appropriate.


			20			March 2023 Form 10-Q


Table of Contents
Management’s Discussion and Analysis

Resolution and Recovery Planning

We are required to submit once every two years to the Federal Reserve and the FDIC a resolution plan that describes our strategy for a rapid and orderly resolution under the U.S. Bankruptcy Code in the event of our material financial distress or failure. We submitted our 2021 targeted resolution plan on June 30, 2021. In November 2022, we received joint feedback on our 2021 resolution plan from the Federal Reserve and the FDIC (“Agencies”). The feedback indicated that there are no shortcomings or deficiencies in our 2021 resolution plan and that we had successfully addressed a prior shortcoming identified by the Agencies in the review of our 2019 full resolution plan. Our next resolution plan submission will be a full resolution plan in July 2023.

As described in our most recent resolution plan, our preferred resolution strategy is an SPOE strategy. In line with our SPOE strategy, the Parent Company has transferred, and has agreed to transfer on an ongoing basis, certain assets to its wholly owned, direct subsidiary Morgan Stanley Holdings LLC (the “Funding IHC”). In addition, the Parent Company has entered into an amended and restated support agreement with its material entities (including the Funding IHC) and certain other subsidiaries. In the event of a resolution scenario, the Parent Company would be obligated to contribute all of its ~~Contributable Assets~~contributable assets to our ~~material~~supported entities and/or the Funding IHC. The Funding IHC would be obligated to provide capital and liquidity, as applicable, to our ~~material~~supported entities. The combined implication of the SPOE resolution strategy and the requirement to maintain certain levels of TLAC is that losses in resolution would be imposed on the holders of eligible long-term debt and other forms of eligible TLAC issued by the Parent Company before any losses are imposed on creditors of our ~~material~~supported entities and without requiring taxpayer or government financial support.

For more information about resolution and recovery planning requirements and our activities in these areas, including the implications of such activities in a resolution scenario, see “Business—Supervision and Regulation—Financial Holding Company—Resolution and Recovery Planning,” “Risk Factors—Legal, Regulatory and Compliance Risk” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Regulatory Requirements—Resolution and Recovery Planning” in the ~~2021~~2022 Form 10-K.

Regulatory Developments and Other Matters

Covered Funds Restrictions under the Volcker Rule

The Volcker Rule prohibits certain investments and relationships by banking entities with covered funds, as defined in the Volcker Rule. During the current quarter, we determined and began implementing various conformance options permitted under the Volcker Rule with respect to interests in certain legacy illiquid funds for which we previously received a conformance extension until July 21, 2023. These conformance options include selling a portion or all of our interests, restructuring our investments, and relying on other applicable exemptions and exclusions under the Volcker Rule. As of March 31, 2023, the carrying value of our investments in those legacy illiquid funds approximated $210 million. For additional information on the Volcker Rule, see “Business—Supervision and Regulation—Financial Holding Company—Activities Restrictions Under the Volcker Rule” in the 2022 Form 10-K. For information on investments measured at NAV, see Note 4 to the financial statements.

Replacement of London Interbank Offered Rate and Replacement or Reform of Other Interest Rate Benchmarks

Central banks around the world, including the Federal Reserve, have ~~commissioned committees and working groups of market participants and official sector representatives~~sponsored initiatives in recent years to replace LIBOR and replace or reform certain other interest rate benchmarks (collectively, the “IBORs”). A transition away from use of the IBORs to alternative rates and other potential interest rate benchmark reforms is underway and ~~will continue over the course of the next few years.~~is a multi-year initiative.

The publication of most non-U.S. dollar LIBOR rates ceased as of the end of December ~~2021. The publication of~~2021, although certain ~~non-U.S. dollar~~Sterling and Yen LIBOR rates have been published for a limited period following this date on the basis of a “synthetic” methodology (known as “synthetic LIBOR”). The synthetic Yen LIBOR rates ceased as of the end of December 2022 and following the announcement of the U.K. Financial Conduct Authority (“UK FCA”), which regulates the publisher of LIBOR (ICE Benchmark Administration), publication of the one- and six-month tenors of synthetic Sterling LIBOR ceased at the end of March 2023 and publication of the three-month synthetic Sterling LIBOR will ~~continue~~cease at the end of March 2024.

U.S. dollar LIBOR rates are expected to cease being published as of the end of June 2023. On March 15, 2022 the U.S. enacted federal legislation that is intended to minimize legal and economic uncertainty following U.S. dollar LIBOR’s cessation by replacing LIBOR references in certain U.S. law-governed contracts under certain circumstances with a SOFR-based rate identified in a Federal Reserve rule plus a statutory spread adjustment. While some states have already adopted LIBOR legislation, the federal legislation expressly preempts any provision of any state or local law, statute, rule, regulation or standard. In addition, the UK FCA has announced that it will require ICE Benchmark Administration


March ~~2022~~2023 Form 10-Q			21


Table of Contents
Management’s Discussion and Analysis

~~least~~to continue the publication of the one-, three- and six-month tenors of U.S. dollar LIBOR on a synthetic basis until the end of ~~2022~~September 2024. This may result in certain non-U.S. law-governed contracts and ~~certain~~U.S. law-governed contracts not covered by the federal legislation to remain on synthetic U.S. dollar LIBOR ~~tenors are expected to continue to be published~~ until ~~June 30, 2023. On March 15, 2022~~ the U.S. enacted federal legislation that is intended to minimize legal and economic uncertainty following U.S. dollar LIBOR’s cessation by replacing LIBOR references in certain contracts under certain circumstances with a SOFR-based rate to be established in a Federal Reserve rule that incorporates a spread adjustment specified in the statute. While some states have already adopted LIBOR legislation, the federal legislation expressly preempts any provisionend of ~~any state or local law, statute, rule, regulation or standard.~~this period.

As of March 31, ~~2022,~~ 2023, our LIBOR-referenced contracts were primarily concentrated in derivative contracts and, to a lesser extent, loans, floating rate notes, preferred shares, securitizations and mortgages. A significant majority of our derivative contracts, and a majority of our non-derivative contracts, contain fallback provisions or otherwise have an expected path that will allow for the transition to an alternative reference rate upon the cessation of the applicable LIBOR rate.

While we have made substantial progress in the transition away from the IBORs, we nonetheless currently remain party to a significant number of U.S. dollar LIBOR-linked contracts. For ~~those~~the limited number of U.S. dollar LIBOR-linked contracts without ~~appropriate fallbacks, and for~~a current market standard fallback, or to which the federal legislation isdoes not ~~expected to~~ apply, we are actively developing appropriate transition plans in light of the planned June 30, 2023 cessation date for the remaining U.S. dollar LIBOR tenors.

Our IBOR transition plan is overseen by a global steering committee, with senior management oversight, and we continue to execute against our Firm-wide IBOR transition plan to complete the transition to alternative reference rates.

See also “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Regulatory Requirements—Regulatory Developments and Other Matters” and “Risk Factors—Risk Management” in the ~~2021~~2022 Form 10-K for a further discussion of the replacement of the IBORs and/or reform of other interest rate benchmarks and related risks.


			22			March ~~2022~~2023 Form 10-Q


Table of Contents

Quantitative and Qualitative Disclosures about Risk

Management believes effective risk management is vital to the success of our business activities. For a discussion of our Enterprise Risk Management framework and risk management functions, see “Quantitative and Qualitative Disclosures about Risk—Risk Management” in the ~~2021~~2022 Form 10-K.

Market Risk

Market risk refers to the risk that a change in the level of one or more market prices, rates, spreads, indices, volatilities, correlations or other market factors, such as market liquidity, will result in losses for a position or portfolio. Generally, we incur market risk as a result of trading, investing and client facilitation activities, principally within the Institutional Securities business segment where the substantial majority of our VaR for market risk exposures is generated. In addition, we incur non-trading market risk, principally within the Wealth Management and Investment Management business segments. The Wealth Management business segment primarily incurs non-trading market risk (including interest rate risk) from lending and deposit-taking activities. The Investment Management business segment primarily incurs non-trading market risk from capital investments in its funds. For a further discussion of market risk, see “Quantitative and Qualitative Disclosures about Risk—Market Risk” in the ~~2021~~2022 Form 10-K.

Trading Risks

We have exposures to a wide range of risks related to interest rates and credit spreads, equity prices, foreign exchange rates and commodity prices as well as the associated implied volatilities, correlations and spreads of the global markets in which we conduct our trading activities.

The statistical technique known as VaR is one of the tools we use to measure, monitor and review the market risk exposures of our trading portfolios.

For information regarding our primary risk exposures and market risk management, VaR methodology, assumptions and limitations, see “Quantitative and Qualitative Disclosures about Risk—Market Risk—Trading Risks” in the ~~2021~~2022 Form 10-K.

95%/One-Day Management VaR for the Trading Portfolio


		Three Months Ended									Three Months Ended
		March 31, 2022									March 31, 2023
$ in millions	$ in millions	Period End		Average		High1		Low1		$ in millions	Period End		Average		High1		Low1
Interest rate and credit spread	Interest rate and credit spread	$	30	$	25	$	33	$	21	Interest rate and credit spread	$	32	$	36	$	43	$	31
Equity price	Equity price	28		25		41		17		Equity price	29		25		31		16
Foreign exchange rate	Foreign exchange rate	16		8		19		3		Foreign exchange rate	10		10		18		6
Commodity price	Commodity price	24		20		27		15		Commodity price	21		24		35		16
Less: Diversification benefit2	Less: Diversification benefit2	(51)		(41)		N/A				Less: Diversification benefit2	(44)		(47)		N/A
Primary Risk Categories	Primary Risk Categories	$	47	$	37	$	47	$	31	Primary Risk Categories	$	48	$	48	$	60	$	39
Credit Portfolio	Credit Portfolio	15		13		15		12		Credit Portfolio	21		19		21		18
Less: Diversification benefit2	Less: Diversification benefit2	(15)		(11)		N/A				Less: Diversification benefit2	(19)		(12)		N/A
Total Management VaR	Total Management VaR	$	47	$	39	$	48	$	32	Total Management VaR	$	50	$	55	$	72	$	45


		Three Months Ended									Three Months Ended
		December 31, 2021									December 31, 2022
$ in millions	$ in millions	Period End		Average		High1		Low1		$ in millions	Period End		Average		High1		Low1
Interest rate and credit spread	Interest rate and credit spread	$	21	$	25	$	32	$	21	Interest rate and credit spread	$	37	$	36	$	43	$	32
Equity price	Equity price	20		25		32		20		Equity price	16		20		28		16
Foreign exchange rate	Foreign exchange rate	6		6		9		4		Foreign exchange rate	10		9		12		7
Commodity price	Commodity price	16		17		26		14		Commodity price	26		30		41		20
Less: Diversification benefit2	Less: Diversification benefit2	(31)		(35)		N/A				Less: Diversification benefit2	(36)		(39)		N/A
Primary Risk Categories	Primary Risk Categories	$	32	$	38	$	51	$	32	Primary Risk Categories	$	53	$	56	$	65	$	47
Credit Portfolio	Credit Portfolio	12		12		13		12		Credit Portfolio	19		18		19		15
Less: Diversification benefit2	Less: Diversification benefit2	(12)		(10)		N/A				Less: Diversification benefit2	(9)		(10)		N/A
Total Management VaR	Total Management VaR	$	32	$	40	$	54	$	32	Total Management VaR	$	63	$	64	$	71	$	56

1.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.

2.Diversification benefit equals the difference between the total 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.

Average Total Management VaR and average Management VaR for the Primary Risk Categories ~~were relatively unchanged~~decreased from the three months ended December 31, ~~2021.~~ ~~Period end Total Management VaR increased from December 31, 2021,~~2022, primarily ~~from~~due to reduced exposures in the ~~interest rate and credit spread, equity price and~~ commodity price ~~risk categories, which were driven by increased exposure in the Fixed Income~~category and ~~Equity businesses and by increased market volatility. These increases were partially offset by~~ increased diversification ~~benefit.~~benefits.

Distribution of VaR Statistics and Net Revenues

We evaluate the reasonableness of our VaR model by comparing the potential declines in portfolio values generated by the model with corresponding actual trading results for the Firm, as well as individual business units. For days where losses exceed the VaR statistic, we examine the drivers of trading losses to evaluate the VaR model’s ~~accuracy~~.accuracy. There were ~~two~~2 loss days in the current quarter, one of which ~~did not exceed~~exceeded 95% Total Management VaR.


March ~~2022~~2023 Form 10-Q			23


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Risk Disclosures

Daily 95%/One-Day Total Management VaR for the Current Quarter

($ in millions)

Daily Net Trading Revenues for the Current Quarter

($ in millions)

The previous histogram shows the distribution of daily net trading revenues for the current quarter. Daily net trading revenues include profits and losses from Interest rate and credit spread, Equity price, Foreign exchange rate, Commodity price, and Credit Portfolio positions and intraday trading activities for our trading businesses. Certain items such as fees, commissions, net interest income and counterparty default risk are excluded from daily net trading revenues and the VaR model. Revenues required for Regulatory VaR backtesting further exclude intraday trading.

Non-Trading Risks

We believe that sensitivity analysis is an appropriate representation of our non-trading risks. The following sensitivity analyses cover substantially all of the non-trading risk in our portfolio.

Credit Spread Risk Sensitivity1


$ in millions	$ in millions	At March 31, 2022		At December 31, 2021		$ in millions	At March 31, 2023		At December 31, 2022
Derivatives	Derivatives	$	7	$	7	Derivatives	$	6	$	7
Borrowings carried at fair value	Borrowings carried at fair value	44		48		Borrowings carried at fair value	42		39

1.Amounts represent the potential gain for each 1 bps widening of our credit spread.

~~U.S. Bank Subsidiaries'~~

Credit spread risk sensitivity for borrowings carried at fair value at March 31, 2023 increased from December 31, 2022 primarily due to tightening credit spreads, in addition to new debt issuance.

The Wealth Management business segment reflects a substantial portion of our non-trading interest rate risk. Net interest income in the Wealth Management business segment primarily consists of interest income earned on non-trading assets held, including loans and investment securities, as well as margin and other lending on non-bank entities and interest expense incurred on non-trading liabilities, primarily deposits.

Wealth Management Net Interest Income Sensitivity Analysis


$ in millions	$ in millions	At March 31, 2022		At December 31, 2021		$ in millions	At March 31, 2023		At December 31, 2022
Basis point change	Basis point change					Basis point change
+100	+100	$	162	$	1,267	+100	$	533	$	643
-100	-100	(622)		(893)		-100	(637)		(745)

The previous table presents an analysis of selected instantaneous upward and downward parallel interest rate shocks (subject to a floor of zero percent in the downward scenario) on net interest income over the next 12 months for our ~~U.S. Bank Subsidiaries.~~Wealth Management business segment. These shocks are applied to our 12-month forecast for our ~~U.S. Bank Subsidiaries,~~Wealth Management business segment, which incorporates market expectations of interest rates and our forecasted business ~~activity.~~activity, including deposit forecasts as a key assumption.

We do not manage to any single rate scenario but rather manage net interest income in our ~~U.S. Bank Subsidiaries~~Wealth Management business segment to optimize across a range of possible outcomes, including non-parallel rate change scenarios. The sensitivity analysis assumes that we take no action in response to these scenarios, assumes there are no changes in other macroeconomic variables normally correlated with changes in interest rates and includes subjective assumptions regarding customer and market re-pricing behavior and other factors.

Our Wealth Management business segment balance sheet is asset sensitive, given assets reprice faster than liabilities, resulting in higher net interest income in increasing interest rate scenarios. The ~~change in~~level of interest rates may impact the amount of deposits held at the Firm, given competition for deposits from other institutions and alternative cash-equivalent products available to depositors. Further, rising interest rates could also impact client demand for loans. Net interest income sensitivity to interest rates ~~between~~at March 31, ~~2022 and~~2023


			24			March 2023 Form 10-Q


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Risk Disclosures

decreased from December 31, ~~2021 was~~2022, primarily driven by the ~~significant changes in market rates and~~ effects of changes in the mix of our assets and liabilities.

Investments Sensitivity, Including Related Carried Interest


		Loss from 10% Decline					Loss from 10% Decline
$ in millions	$ in millions	At March 31, 2022		At December 31, 2021		$ in millions	At March 31, 2023		At December 31, 2022
Investments related to Investment Management activities	Investments related to Investment Management activities	$	415	$	407	Investments related to Investment Management activities	$	449	$	431
Other investments:	Other investments:					Other investments:
MUMSS	MUMSS	158		167		MUMSS	144		143
Other Firm investments	Other Firm investments	344		331		Other Firm investments	375		378

We have exposure to public and private companies through direct investments, as well as through funds that invest in these assets. These investments are predominantly equity positions with long investment horizons, a portion of which is for business facilitation purposes. The market risk related to these investments is measured by estimating the potential reduction in net revenues associated with a reasonably possible 10% decline in investment values and ~~related~~related impact on performance-based income, as applicable.

Investments sensitivity changed between March 31, 2023 and December 31, 2022 with an increase in sensitivity in Investments related to Investment Management activity primarily due to new investments in public funds.


			24			~~March 2022 Form 10-Q~~


~~Table of Contents~~
~~Risk Disclosures~~

Asset Management Revenue Sensitivity

Certain asset management revenues in the Wealth Management and Investment Management business segments are derived from management fees, which are based on fee-based client assets in Wealth Management or AUM in Investment Management (together, “client holdings”). The assets underlying client holdings are primarily composed of equity, fixed income and alternative investments and are sensitive to changes in related markets. ~~The overall level of these~~These revenues ~~depends~~depend on multiple factors ~~that include,~~including, but ~~are~~ not limited to, the level and duration of a market increase or decline, price volatility, the geographic and industry mix of client assets, and client behavior such as the rate and magnitude of client investments and redemptions. Therefore, overall revenues domay not correlate completely with changes in the related markets.

Credit Risk

Credit risk refers to the risk of loss arising when a borrower, counterparty or issuer does not meet its financial obligations to us. We are primarily exposed to credit risk from institutions and individuals through our Institutional Securities and Wealth Management business segments. For a further discussion of our credit risks, see “Quantitative and Qualitative Disclosures about Risk—Credit Risk” in the ~~2021~~2022 Form 10-K.

Loans and Lending Commitments


		At March 31, 2022									At March 31, 2023
$ in millions	$ in millions	HFI		HFS		FVO		Total		$ in millions	HFI		HFS		FVO2		Total
Institutional Securities:	Institutional Securities:									Institutional Securities:
Corporate	Corporate	$	6,105	$	7,069	$	8	$	13,182	Corporate	$	7,435	$	11,150	$	—	$	18,585
Secured lending facilities	Secured lending facilities	29,896		4,661		—		34,557		Secured lending facilities	37,187		3,006		6		40,199
Commercial and Residential real estate	Commercial and Residential real estate	8,276		1,986		4,492		14,754		Commercial and Residential real estate	8,601		948		2,535		12,084
Securities-based lending and Other	Securities-based lending and Other	1,972		131		7,633		9,736		Securities-based lending and Other	3,430		16		5,276		8,722
Total Institutional Securities	Total Institutional Securities	46,249		13,847		12,133		72,229		Total Institutional Securities	56,653		15,120		7,817		79,590
Wealth Management:	Wealth Management:									Wealth Management:
Residential real estate	Residential real estate	47,236		6		—		47,242		Residential real estate	55,400		25		—		55,425
Securities-based lending and Other	Securities-based lending and Other	89,436		160		—		89,596		Securities-based lending and Other	88,463		1		—		88,464
Total Wealth Management	Total Wealth Management	136,672		166		—		136,838		Total Wealth Management	143,863		26		—		143,889
Total Investment Management1	Total Investment Management1	5		—		357		362		Total Investment Management1	4		—		214		218
Total loans2		182,926		14,013		12,490		209,429
Total loans										Total loans	200,520		15,146		8,031		223,697
ACL	ACL	(679)						(679)		ACL	(970)						(970)
Total loans, net of ACL	Total loans, net of ACL	$	182,247	$	14,013	$	12,490	$	208,750	Total loans, net of ACL	$	199,550	$	15,146	$	8,031	$	222,727
Lending commitments3	Lending commitments3							$	142,492	Lending commitments3							$	140,096
Total exposure	Total exposure							$	351,242	Total exposure							$	362,823


		At December 31, 2021									At December 31, 2022
$ in millions	$ in millions	HFI		HFS		FVO		Total		$ in millions	HFI		HFS		FVO2		Total
Institutional Securities:	Institutional Securities:									Institutional Securities:
Corporate	Corporate	$	5,567	$	8,107	$	8	$	13,682	Corporate	$	6,589	$	10,634	$	—	$	17,223
Secured lending facilities	Secured lending facilities	31,471		3,879		—		35,350		Secured lending facilities	35,606		3,176		6		38,788
Commercial and Residential real estate	Commercial and Residential real estate	7,227		1,777		4,774		13,778		Commercial and Residential real estate	8,515		926		2,548		11,989
Securities-based lending and Other	Securities-based lending and Other	1,292		45		7,710		9,047		Securities-based lending and Other	2,865		39		5,625		8,529
Total Institutional Securities	Total Institutional Securities	45,557		13,808		12,492		71,857		Total Institutional Securities	53,575		14,775		8,179		76,529
Wealth Management:	Wealth Management:									Wealth Management:
Residential real estate	Residential real estate	44,251		7		—		44,258		Residential real estate	54,460		4		—		54,464
Securities-based lending and Other	Securities-based lending and Other	85,143		17		—		85,160		Securities-based lending and Other	91,797		9		—		91,806
Total Wealth Management	Total Wealth Management	129,394		24		—		129,418		Total Wealth Management	146,257		13		—		146,270
Total Investment Management1	Total Investment Management1	5		—		135		140		Total Investment Management1	4		—		218		222
Total loans2		174,956		13,832		12,627		201,415
Total loans										Total loans	199,836		14,788		8,397		223,021
ACL	ACL	(654)						(654)		ACL	(839)						(839)
Total loans, net of ACL	Total loans, net of ACL	$	174,302	$	13,832	$	12,627	$	200,761	Total loans, net of ACL	$	198,997	$	14,788	$	8,397	$	222,182
Lending commitments3	Lending commitments3							$	134,934	Lending commitments3							$	136,960
Total exposure	Total exposure							$	335,695	Total exposure							$	359,142

Total exposure—consists of Total loans, net of ACL, and Lending commitments

1.Investment Management business segment loans are related to certain of our activities as an investment advisor and manager. Loans held at fair value are the result of the consolidation of investment vehicles (including CLOs) managed by Investment Management, composed primarily of senior secured loans to corporations.

2.FVO also includes the fair value of certain unfunded lending commitments.

3.Lending commitments represent the notional amount of legally binding obligations to provide funding to clients for lending transactions. Since commitments associated with these business activities may expire unused or may not be utilized to full capacity, they do not necessarily reflect the actual future cash funding requirements.

We provide loans and lending commitments to a variety of customers, including large corporate and institutional clients, as well as high to ultra-high net worth individuals. In addition, we purchase loans in the secondary market. Loans and lending commitments are either held for investment, held for sale or carried at fair value. For more information on these loan classifications, see Note 2 to the financial statements in the ~~2021~~2022 Form 10-K.

Total loans and lending commitments increased by approximately ~~$16~~$4 billion since December 31, ~~2021,~~2022, primarily due to growth in Secured lending facilities and Corporate lending commitments within the Institutional Securities business segment, as well as increases in Securities-based and Residential real estate loans within the Wealth Management business segment.

~~See Notes 4, 5, 9 and 13 to the financial statements for further information.~~


March ~~2022~~2023 Form 10-Q			25


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Risk Disclosures

due to an increase in Corporate lending within the Institutional Securities business segment.

See Notes 4, 5, 9 and 13 to the financial statements for further information.

Allowance for Credit Losses—Loans and Lending Commitments


$ in millions
ACL—Loans	$	~~654~~839
ACL—Lending Commitments	~~444~~504
Total at December 31, ~~2021~~2022	~~1,098~~1,343
Gross charge-offs	~~(11)~~(71)


Provision for credit losses	57234
Other	~~(6)~~3
Total at March 31, ~~2022~~2023	$	~~1,138~~1,509
ACL—Loans	$	~~679~~970
ACL—Lending commitments	~~459~~539

Provision for Credit Losses by Business Segment


		Three Months Ended March 31, 2022							Three Months Ended March 31, 2023
$ in millions	$ in millions		IS		WM		Total			$ in millions	IS		WM		Total
Loans	Loans		$	24	$	15	$	39		Loans	$	160	$	41	$	201
Lending commitments	Lending commitments		20		(2)		18			Lending commitments	29		4		33
Total	Total		$	44	$	13	$	57		Total	$	189	$	45	$	234

Credit exposure arising from our loans and lending commitments is measured in accordance with our internal risk management standards. Risk factors considered in determining the allowance for credit losses for loans and lending commitments include the borrower’s financial strength, industry, facility structure, LTV ratio, debt service ratio, collateral and covenants. Qualitative and environmental factors such as economic and business conditions, nature and volume of the portfolio and lending terms, and volume and severity of past due loans may also be considered.

The ~~aggregate~~ allowance for credit losses for loans and lending commitments increased since December 31, 2022, reflecting deterioration in both the ~~current quarter, reflecting the Provision for credit losses primarily due to portfolio growth.~~macroeconomic outlook and our expectations of commercial real estate borrowers.

The base scenario used in our ACL models as of March 31, ~~2022~~2023 was generated using a combination of ~~industry~~ consensus economic forecasts, forward rates, and internally developed and validated models, and assumes ~~continued growth over the forecast period.~~an economic contraction in 2023, followed by a recovery in 2024. Given the nature of our lending portfolio, the most sensitive model input is U.S. gross domestic ~~product.~~product (“GDP”).

Forecasted U.S. Real GDP Growth Rates in Base Scenario

4Q 2022 4Q 2023
Year-over-year growth rate 3.3 % 2.1 %


	4Q 2023		4Q 2024
Year-over-year growth rate	(0.1)	%	2.0	%

See Note 9 to the financial statements for further information. See Note 2 to the financial statements in the ~~2021~~2022 Form 10-K for a discussion of the Firm’s ACL methodology under CECL.

Status of Loans Held for Investment


		At March 31, 2022				At December 31, 2021					At March 31, 2023				At December 31, 2022
		IS		WM		IS		WM			IS		WM		IS		WM
Accrual	Accrual	99.0	%	99.8	%	98.7	%	99.8	%	Accrual	98.9	%	99.9	%	99.3	%	99.9	%
Nonaccrual1	Nonaccrual1	1.0	%	0.2	%	1.3	%	0.2	%	Nonaccrual1	1.1	%	0.1	%	0.7	%	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.

Net Charge-off Ratios for Loans Held for Investment


$ in millions	$ in millions	Corporate			Secured Lending Facilities			CRE			Residential Real Estate			SBL and Other			Total			$ in millions	Corporate			Secured Lending Facilities			CRE			Residential Real Estate			SBL and Other			Total
For the Three Months Ended March 31, 2023																				For the Three Months Ended March 31, 2023
Net charge-off (recovery) ratio1																				Net charge-off (recovery) ratio1	0.01		%	—		%	0.81		%	—		%	—		%	0.04		%
Average loans																				Average loans	$	6,953		$	36,322		$	8,568		$	54,802		$	93,021		$	199,666
For the Three Months Ended March 31, 2022	For the Three Months Ended March 31, 2022																			For the Three Months Ended March 31, 2022
Net charge-off ratio1		—		%	0.01		%	0.09		%	—		%	—		%	0.01		%
Average loans		$	5,802		$	31,353		$	7,805		$	45,521		$	87,900		$	178,381
For the Three Months Ended March 31, 2021
Net charge-off ratio1	Net charge-off ratio1	0.02		%	—		%	0.12		%	—		%	—		%	0.01		%	Net charge-off ratio1	—		%	0.01		%	0.09		%	—		%	—		%	0.01		%
Average loans	Average loans	$	5,637		$	25,915		$	7,292		$	35,888		$	65,888		$	140,620		Average loans	$	5,802		$	31,353		$	7,805		$	45,521		$	87,900		$	178,381

1.Net charge-off ratio represents gross charge-offs net of recoveries divided by total average loans held for investment before ACL.

Institutional Securities Loans and Lending Commitments1


		At March 31, 2022											At March 31, 2023
		Contractual Years to Maturity											Contractual Years to Maturity
$ in millions	$ in millions	<1		1-5		5-15		>15		Total		$ in millions	<1		1-5		5-15		>15		Total
Loans	Loans											Loans
AA	AA	$	18	$	5	$	—	$	—	$	23	AA	$	48	$	—	$	105	$	—	$	153
A	A	986		892		740		—		2,618		A	1,184		2,020		186		—		3,390
BBB	BBB	6,239		8,634		474		—		15,347		BBB	5,157		11,706		453		—		17,316
BB	BB	10,520		18,820		1,758		59		31,157		BB	13,020		17,732		623		377		31,752
Other NIG	Other NIG	5,364		9,235		3,220		160		17,979		Other NIG	7,942		11,081		3,440		181		22,644
Unrated2	Unrated2	76		790		679		3,006		4,551		Unrated2	72		956		586		1,956		3,570
Total loans, net of ACL	Total loans, net of ACL	23,203		38,376		6,871		3,225		71,675		Total loans, net of ACL	27,423		43,495		5,393		2,514		78,825
Lending commitments	Lending commitments											Lending commitments
AAA	AAA	—		50		—		—		50		AAA	—		50		—		—		50
AA	AA	3,367		2,813		—		—		6,180		AA	2,273		2,775		289		—		5,337
A	A	6,485		17,355		508		309		24,657		A	5,336		19,947		407		—		25,690
BBB	BBB	5,997		43,083		777		—		49,857		BBB	11,852		41,144		747		—		53,743
BB	BB	4,432		21,411		2,220		1		28,064		BB	3,680		17,212		863		171		21,926
Other NIG	Other NIG	891		14,942		3,290		3		19,126		Other NIG	1,226		13,411		861		3		15,501
Unrated2	Unrated2	—		20		10		—		30		Unrated2	2		5		—		—		7
Total lending commitments	Total lending commitments	21,172		99,674		6,805		313		127,964		Total lending commitments	24,369		94,544		3,167		174		122,254
Total exposure	Total exposure	$	44,375	$	138,050	$	13,676	$	3,538	$	199,639	Total exposure	$	51,792	$	138,039	$	8,560	$	2,688	$	201,079


			26			March ~~2022~~2023 Form 10-Q


Table of Contents
Risk Disclosures


		At December 31, 2021											At December 31, 2022
		Contractual Years to Maturity											Contractual Years to Maturity
$ in millions	$ in millions	<1		1-5		5-15		>15		Total		$ in millions	<1		1-5		5-15		>15		Total
Loans	Loans											Loans
AA	AA	$	—	$	35	$	38	$	—	$	73	AA	$	66	$	—	$	139	$	—	$	205
A	A	890		1,089		675		—		2,654		A	1,331		787		185		—		2,303
BBB	BBB	5,335		8,944		563		—		14,842		BBB	5,632		10,712		465		—		16,809
BB	BB	10,734		18,349		814		18		29,915		BB	11,045		19,219		796		162		31,222
Other NIG	Other NIG	4,656		10,475		3,439		160		18,730		Other NIG	7,274		10,249		3,945		139		21,607
Unrated2	Unrated2	171		665		511		3,753		5,100		Unrated2	95		924		624		2,066		3,709
Total loans, net of ACL	Total loans, net of ACL	21,786		39,557		6,040		3,931		71,314		Total loans, net of ACL	25,443		41,891		6,154		2,367		75,855
Lending commitments	Lending commitments											Lending commitments
AAA	AAA	—		50		—		—		50		AAA	—		50		—		—		50
AA	AA	3,283		2,690		—		—		5,973		AA	2,515		2,935		11		—		5,461
A	A	5,255		17,646		407		303		23,611		A	5,030		19,717		202		330		25,279
BBB	BBB	6,703		36,096		766		—		43,565		BBB	10,263		39,615		566		—		50,444
BB	BB	2,859		19,698		3,122		—		25,679		BB	3,691		17,656		1,416		96		22,859
Other NIG	Other NIG	992		13,420		6,180		55		20,647		Other NIG	1,173		13,872		530		—		15,575
Unrated2	Unrated2	672		40		3		—		715		Unrated2	—		20		—		3		23
Total lending commitments	Total lending commitments	19,764		89,640		10,478		358		120,240		Total lending commitments	22,672		93,865		2,725		429		119,691
Total exposure	Total exposure	$	41,550	$	129,197	$	16,518	$	4,289	$	191,554	Total exposure	$	48,115	$	135,756	$	8,879	$	2,796	$	195,546

NIG–Non-investment grade

1.Counterparty credit ratings are internally determined by the CRM.

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 “Quantitative and Qualitative Disclosures about Risk—Market Risk” herein.

Institutional Securities Loans and Lending Commitments by Industry


$ in millions	$ in millions	At March 31, 2022		At December 31, 2021		$ in millions	At March 31, 2023		At December 31, 2022
Industry	Industry					Industry
Financials	Financials	$	54,331	$	52,066	Financials	$	52,298	$	54,222
Real estate	Real estate	33,438		31,560		Real estate	36,203		32,358
Communications services						Communications services	14,857		15,336
Industrials	Industrials	14,855		17,446		Industrials	14,620		14,557
Information technology						Information technology	14,379		13,790
Healthcare	Healthcare	13,513		12,618		Healthcare	12,506		12,353
Information technology		12,844		13,471
Communications services		12,705		12,645
Utilities						Utilities	11,730		10,542
Consumer discretionary	Consumer discretionary	12,204		11,628		Consumer discretionary	11,540		11,592
Utilities		9,931		10,310
Consumer staples						Consumer staples	10,317		7,823
Energy						Energy	8,672		9,115
Materials	Materials	9,275		6,394		Materials	6,210		6,102
Energy		9,212		8,544
Consumer staples		8,254		7,855
Insurance	Insurance	7,041		4,954		Insurance	5,979		5,925
Other	Other	2,036		2,063		Other	1,768		1,831
Total exposure	Total exposure	$	199,639	$	191,554	Total exposure	$	201,079	$	195,546

~~Sectors Currently in Focus due to COVID-19~~

We continue to monitor the developments of the coronavirus disease (“COVID-19”) and its impact on various sectors and industries, particularly those most sensitive to the ongoing effects of the pandemic, including retail, air travel and lodging and leisure, which are included across the Industrials, Financials, Real estate and Consumer discretionary industries in the previous table. Refer to “Risk Factors” in the 2021 Form 10-K.

Institutional Securities Lending Activities

The Institutional Securities business segment lending activities include Corporate, Secured lending facilities, Commercial real estate and Securities-based lending and Other. As of March 31, ~~2022,~~2023, over 90% of our total lending exposure, which consists of loans and lending commitments, is investment grade and/or secured by collateral. For a description of Institutional Securities’ lending activities, see “Quantitative and Qualitative Disclosures about Risk—Credit Risk” in the ~~2021~~2022 Form 10-K.

Institutional Securities Event-Driven Loans and Lending Commitments

At March 31, 2022
Contractual Years to Maturity
$ in millions <1 1-5 5-15 Total
Loans, net of ACL $ 923 $ 1,168 $ 2,254 $ 4,345
Lending commitments 3,017 9,288 4,900 17,205
Total exposure $ 3,940 $ 10,456 $ 7,154 $ 21,550
At December 31, 2021
Contractual Years to Maturity
$ in millions <1 1-5 5-15 Total
Loans, net of ACL $ 951 $ 2,088 $ 1,803 $ 4,842
Lending commitments 1,619 5,288 8,879 15,786
Total exposure $ 2,570 $ 7,376 $ 10,682 $ 20,628


	At March 31, 2023
	Contractual Years to Maturity
$ in millions	<1		1-5		5-15		Total
Loans, net of ACL	$	2,361	$	1,193	$	2,401	$	5,955
Lending commitments	4,507		481		459		5,447
Total exposure	$	6,868	$	1,674	$	2,860	$	11,402


	At December 31, 2022
	Contractual Years to Maturity
$ in millions	<1		1-5		5-15		Total
Loans, net of ACL	$	2,385	$	1,441	$	2,771	$	6,597
Lending commitments	3,079		861		603		4,543
Total exposure	$	5,464	$	2,302	$	3,374	$	11,140

Event-driven loans and lending commitments are associated with an underwriting and/or syndication to finance a ~~particular event or~~specific transaction, such as ~~to support client~~ merger, acquisition, recapitalization or project finance activities. Balances may fluctuate as such lending is related to transactions that vary in timing and size from period to period.

Institutional Securities Loans and Lending Commitments Held for Investment


		At March 31, 2022						At March 31, 2023
$ in millions	$ in millions	Loans		Lending Commitments		Total			$ in millions	Loans		Lending Commitments		Total
Corporate	Corporate	$	6,105	$	76,006	$	82,111		Corporate	$	7,435	$	82,758	$	90,193
Secured lending facilities	Secured lending facilities	29,896		14,025		43,921			Secured lending facilities	37,187		13,893		51,080
Commercial real estate	Commercial real estate	8,276		711		8,987			Commercial real estate	8,601		371		8,972
Other		1,972		885		2,857
Securities-based lending and Other									Securities-based lending and Other	3,430		955		4,385
Total, before ACL	Total, before ACL	$	46,249	$	91,627	$	137,876		Total, before ACL	$	56,653	$	97,977	$	154,630
ACL	ACL	$	(554)	$	(443)	$	(997)		ACL	$	(765)	$	(515)	$	(1,280)


		At December 31, 2021								At December 31, 2022
$ in millions	$ in millions		Loans		Lending Commitments		Total		$ in millions		Loans		Lending Commitments		Total
Corporate	Corporate		$	5,567	$	73,585	$	79,152	Corporate		$	6,589	$	79,882	$	86,471
Secured lending facilities	Secured lending facilities		31,471		10,003		41,474		Secured lending facilities		35,606		12,803		48,409
Commercial real estate	Commercial real estate		7,227		1,475		8,702		Commercial real estate		8,515		374		8,889
Other			1,292		887		2,179
Securities-based lending and Other									Securities-based lending and Other		2,865		985		3,850
Total, before ACL	Total, before ACL		$	45,557	$	85,950	$	131,507	Total, before ACL		$	53,575	$	94,044	$	147,619
ACL	ACL		$	(543)	$	(426)	$	(969)	ACL		$	(674)	$	(484)	$	(1,158)


March ~~2022~~2023 Form 10-Q			27


Table of Contents
Risk Disclosures

Institutional Securities Commercial Real Estate Loans and Lending Commitments

By Region


	At March 31, 2023						At December 31, 2022
$ in millions	Loans1		LC1		Total		Loans1		LC1		Total
Americas	$	6,103	$	367	$	6,470	$	6,320	$	378	$	6,698
EMEA	3,367		84		3,451		3,040		79		3,119
Asia	427		5		432		445		5		450
Total	$	9,897	$	456	$	10,353	$	9,805	$	462	$	10,267

By Property Type


	At March 31, 2023						At December 31, 2022
$ in millions	Loans1		LC1		Total		Loans1		LC1		Total
Office	$	3,869	$	273	$	4,142	$	3,861	$	301	$	4,162
Industrial	2,689		18		2,707		2,561		25		2,586
Multifamily	1,647		82		1,729		1,889		85		1,974
Retail	846		6		852		659		6		665
Hotel	834		77		911		780		45		825
Other	12		—		12		55		—		55
Total	$	9,897	$	456	$	10,353	$	9,805	$	462	$	10,267

LC–Lending Commitments

1. Amounts include HFI, HFS and FVO. HFI loans are presented net of ACL.

The current economic environment and changes in business and consumer behavior post-COVID have adversely impacted commercial real estate borrowers due to pressure from higher interest rates, tenant lease renewals, and elevated refinancing risks, among other issues. While we continue to actively monitor all our loan portfolios, the commercial real estate sector remains under heightened focus given the sector’s sensitivity to economic and secular factors, credit conditions, and difficulties specific to certain property types, most notably office.

As of March 31, 2023, our lending against commercial real estate properties totaled $10.4 billion within the Institutional Securities business segment. Commercial real estate loans are originated for experienced sponsors and are generally secured by institutional commercial real estate properties. In many cases, loans are subsequently syndicated or securitized on a full or partial basis, reducing our ongoing exposure.

Institutional Securities Allowance for Credit Losses—Loans and Lending Commitments


$ in millions	$ in millions	Corporate		Secured Lending Facilities		Commercial Real Estate		Other		Total		$ in millions	Corporate		Secured Lending Facilities		Commercial Real Estate		Other		Total
ACL—Loans	ACL—Loans	$	165	$	163	$	206	$	9	$	543	ACL—Loans	$	235	$	153	$	275	$	11	$	674
ACL—Lending commitments	ACL—Lending commitments	356		41		20		9		426		ACL—Lending commitments	411		51		15		7		484
Total at December 31, 2021		$	521	$	204	$	226	$	18	$	969
Total at December 31, 2022												Total at December 31, 2022	$	646	$	204	$	290	$	18	$	1,158
Gross charge-offs	Gross charge-offs	—		(3)		(7)		—		(10)		Gross charge-offs	(1)		—		(69)		—		(70)

Provision for credit losses	Provision for credit losses	26		20		(1)		(1)		44		Provision for credit losses	53		—		136		—		189
Other	Other	(4)		—		(2)		—		(6)		Other	2		(1)		—		2		3
Total at March 31, 2022		$	543	$	221	$	216	$	17	$	997
Total at March 31, 2023												Total at March 31, 2023	$	700	$	203	$	357	$	20	$	1,280
ACL—Loans	ACL—Loans	$	170	$	172	$	203	$	9	$	554	ACL—Loans	$	265	$	152	$	335	$	13	$	765
ACL—Lending commitments	ACL—Lending commitments	373		49		13		8		443		ACL—Lending commitments	435		51		22		7		515

Institutional Securities HFI Loans—Ratios of Allowance for Credit Losses to Balance Before Allowance


		At March 31, 2022		At December 31, 2021			At March 31, 2023		At December 31, 2022
Corporate	Corporate	2.8	%	3.0	%	Corporate	3.6	%	3.6	%
Secured lending facilities	Secured lending facilities	0.6	%	0.5	%	Secured lending facilities	0.4	%	0.4	%
Commercial real estate	Commercial real estate	2.5	%	2.9	%	Commercial real estate	3.9	%	3.2	%
Other		0.5	%	0.7	%
Securities-based lending and Other						Securities-based lending and Other	0.4	%	0.4	%
Total Institutional Securities loans	Total Institutional Securities loans	1.2	%	1.2	%	Total Institutional Securities loans	1.4	%	1.3	%

Wealth Management Loans and Lending Commitments


		At March 31, 2022											At March 31, 2023
		Contractual Years to Maturity											Contractual Years to Maturity
$ in millions	$ in millions	<1		1-5		5-15		>15		Total		$ in millions	<1		1-5		5-15		>15		Total
Securities-based lending and Other loans	Securities-based lending and Other loans	$	78,507	$	9,307	$	1,588	$	141	$	89,543	Securities-based lending and Other loans	$	76,801	$	9,789	$	1,647	$	137	$	88,374
Residential real estate loans	Residential real estate loans	3		13		1,277		45,877		47,170		Residential real estate loans	1		39		1,351		53,919		55,310
Total loans, net of ACL	Total loans, net of ACL	$	78,510	$	9,320	$	2,865	$	46,018	$	136,713	Total loans, net of ACL	$	76,802	$	9,828	$	2,998	$	54,056	$	143,684
Lending commitments	Lending commitments	11,398		2,824		47		259		14,528		Lending commitments	12,985		4,492		32		333		17,842
Total exposure	Total exposure	$	89,908	$	12,144	$	2,912	$	46,277	$	151,241	Total exposure	$	89,787	$	14,320	$	3,030	$	54,389	$	161,526


		At December 31, 2021											At December 31, 2022
		Contractual Years to Maturity											Contractual Years to Maturity
$ in millions	$ in millions	<1		1-5		5-15		>15		Total		$ in millions	<1		1-5		5-15		>15		Total
Securities-based lending and Other loans	Securities-based lending and Other loans	$	74,466	$	8,927	$	1,571	$	144	$	85,108	Securities-based lending and Other loans	$	80,526	$	9,371	$	1,692	$	140	$	91,729
Residential real estate loans	Residential real estate loans	4		10		1,231		42,954		44,199		Residential real estate loans	1		32		1,375		52,968		54,376
Total loans, net of ACL	Total loans, net of ACL	$	74,470	$	8,937	$	2,802	$	43,098	$	129,307	Total loans, net of ACL	$	80,527	$	9,403	$	3,067	$	53,108	$	146,105
Lending commitments	Lending commitments	11,894		2,467		51		282		14,694		Lending commitments	12,408		4,501		37		323		17,269
Total exposure	Total exposure	$	86,364	$	11,404	$	2,853	$	43,380	$	144,001	Total exposure	$	92,935	$	13,904	$	3,104	$	53,431	$	163,374

The principal Wealth Management business segment lending activities include Securities-based lending and Residential real estate loans.

Securities-based lending allows clients to borrow money against the value of qualifying securities, generally for any purpose other than purchasing, trading or carrying securities or refinancing margin debt. Other loans include structured loans originated through the Firm’s private banking platform to high and ultra-high net worth clients that are mostly secured by various types of collateral, including stock, private investments, commercial real estate and other financial assets.For more information about our Securities-based lending and


			28			March 2023 Form 10-Q


Table of Contents
Risk Disclosures

Residential real estate loans, see “Quantitative and Qualitative Disclosures about Risk—Credit Risk” in the ~~2021~~2022 Form 10-K.

Wealth Management Commercial Real Estate Loans and Lending Commitments by Property Type


	At March 31, 2023						At December 31, 2022
$ in millions	Loans1		LC		Total		Loans1		LC		Total
Office	$	1,669	$	1	$	1,670	$	1,675	$	1	$	1,676
Industrial	330		—		330		330		—		330
Multifamily	1,848		140		1,988		1,661		142		1,803
Retail	2,125		9		2,134		2,135		6		2,141
Hotel	418		—		418		419		—		419
Other	185		10		195		183		10		193
Total	$	6,575	$	160	$	6,735	$	6,403	$	159	$	6,562

LC–Lending Commitments

1.Amounts include HFI Loans net of ACL.

As of March 31, 2023, our lending against commercial real estate properties totaled $6.7 billion within the Wealth Management business and are included within Securities-based lending and Other. Such loans are originated through our private banking platform, are both secured and generally benefiting from full or partial guarantees from high or ultra-high net worth clients. All of our lending against commercial real estate properties within Wealth Management are in the Americas region. At both March 31, 2023 and December 31, 2022, greater than 95% of the commercial real estate loans balance in the Wealth Management business segment benefited from full or partial guarantees from high or ultra-high net worth clients.

Wealth Management Allowance for Credit Losses—Loans and Lending Commitments


$ in millions
ACL—Loans	$	~~111~~165
ACL—Lending commitments	1820
Total at December 31, ~~2021~~2022	~~129~~185
Gross charge-offs	(1)


Provision for credit losses	1345

Total at March 31, ~~2022~~2023	$	~~141~~229
ACL—Loans	$	~~125~~205
ACL—Lending commitments	1624

At March 31, ~~2022,~~2023, more than 75% of Wealth Management residential real estate loans were to borrowers with “Exceptional” or “Very Good” FICO scores (i.e., exceeding 740). Additionally, Wealth Management’s securities-based lending portfolio remains well-collateralized and subject to daily client margining, which includes requiring customers to deposit additional collateral or reduce debt positions, when necessary.

Customer and Other Receivables

Margin Loans and Other Lending


$ in millions	$ in millions	At March 31, 2022		At December 31, 2021		$ in millions	At March 31, 2023		At December 31, 2022
Institutional Securities	Institutional Securities	$	27,177	$	40,545	Institutional Securities	$	18,304	$	16,591
Wealth Management	Wealth Management	29,171		30,987		Wealth Management	21,050		21,933
Total	Total	$	56,348	$	71,532	Total	$	39,354	$	38,524

The Institutional Securities and Wealth Management business segments provide margin lending arrangements that allow customers to borrow against the value of qualifying securities, primarily for the purpose of purchasing additional securities, as well as to collateralize short positions. Institutional Securities primarily includes margin loans in the Equity Financing business. Wealth Management includes margin loans as well as non-purpose securities-based lending on non-bank entities. Amounts may fluctuate from period to period as overall client balances change as a result of market levels, client positioning and leverage.

Credit exposures arising from margin lending activities are generally mitigated by their short-term nature, the value of collateral held and our right to call for additional margin when collateral values decline. However, we could incur losses in the event that the customer fails to meet margin calls and collateral values decline below the loan amount. This risk is elevated in loans backed by collateral pools with significant concentrations in individual issuers or securities with similar risk characteristics. For a further discussion, see “Risk Factors—Credit Risk” in the ~~2021~~2022 Form 10-K.

Employee Loans

For information on employee loans and related ACL, see Note 9 to the financial statements.

March ~~2022~~2023 Form 10-Q


Table of Contents
Risk Disclosures

Derivatives

Fair Value of OTC Derivative Assets


		Counterparty Credit Rating1													Counterparty Credit Rating1
$ in millions	$ in millions	AAA		AA		A		BBB		NIG		Total		$ in millions	AAA		AA		A		BBB		NIG		Total
At March 31, 2022
At March 31, 2023														At March 31, 2023
Less than 1 year	Less than 1 year	$	2,641	$	19,678	$	44,744	$	37,429	$	17,803	$	122,295	Less than 1 year	$	2,071	$	15,151	$	32,023	$	29,160	$	9,933	$	88,338
1-3 years	1-3 years	850		6,623		16,964		19,316		7,979		51,732		1-3 years	1,520		7,243		14,507		16,267		7,213		46,750
3-5 years	3-5 years	1,109		6,317		7,749		9,729		3,497		28,401		3-5 years	633		6,542		7,117		8,750		3,196		26,238
Over 5 years	Over 5 years	4,366		32,016		49,904		53,086		6,223		145,595		Over 5 years	3,959		39,743		38,447		37,361		6,011		125,521
Total, gross	Total, gross	$	8,966	$	64,634	$	119,361	$	119,560	$	35,502	$	348,023	Total, gross	$	8,183	$	68,679	$	92,094	$	91,538	$	26,353	$	286,847
Counterparty netting	Counterparty netting	(3,982)		(53,118)		(84,229)		(89,891)		(16,705)		(247,925)		Counterparty netting	(3,599)		(55,095)		(66,179)		(71,713)		(14,946)		(211,532)
Cash and securities collateral	Cash and securities collateral	(3,552)		(8,765)		(27,333)		(17,907)		(6,675)		(64,232)		Cash and securities collateral	(2,929)		(11,078)		(22,797)		(13,729)		(5,456)		(55,989)
Total, net	Total, net	$	1,432	$	2,751	$	7,799	$	11,762	$	12,122	$	35,866	Total, net	$	1,655	$	2,506	$	3,118	$	6,096	$	5,951	$	19,326


		Counterparty Credit Rating1													Counterparty Credit Rating1
$ in millions	$ in millions	AAA		AA		A		BBB		NIG		Total		$ in millions	AAA		AA		A		BBB		NIG		Total
At December 31, 2021
At December 31, 2022														At December 31, 2022
Less than 1 year	Less than 1 year	$	1,561	$	11,088	$	32,069	$	25,680	$	11,924	$	82,322	Less than 1 year	$	2,903	$	18,166	$	40,825	$	32,373	$	10,730	$	104,997
1-3 years	1-3 years	780		4,577		16,821		15,294		6,300		43,772		1-3 years	1,818		8,648		17,113		19,365		6,974		53,918
3-5 years	3-5 years	593		4,807		6,805		8,030		3,317		23,552		3-5 years	655		6,834		8,632		9,105		4,049		29,275
Over 5 years	Over 5 years	4,359		26,056		61,091		44,091		4,633		140,230		Over 5 years	4,206		42,613		45,488		46,660		8,244		147,211
Total, gross	Total, gross	$	7,293	$	46,528	$	116,786	$	93,095	$	26,174	$	289,876	Total, gross	$	9,582	$	76,261	$	112,058	$	107,503	$	29,997	$	335,401
Counterparty netting	Counterparty netting	(3,093)		(36,957)		(91,490)		(68,365)		(11,642)		(211,547)		Counterparty netting	(4,037)		(60,451)		(79,334)		(85,786)		(17,415)		(247,023)
Cash and securities collateral	Cash and securities collateral	(3,539)		(7,608)		(20,500)		(17,755)		(5,762)		(55,164)		Cash and securities collateral	(3,632)		(13,402)		(28,776)		(14,457)		(5,198)		(65,465)
Total, net	Total, net	$	661	$	1,963	$	4,796	$	6,975	$	8,770	$	23,165	Total, net	$	1,913	$	2,408	$	3,948	$	7,260	$	7,384	$	22,913


$ in millions	$ in millions	At March 31, 2022		At December 31, 2021		$ in millions	At March 31, 2023		At December 31, 2022
Industry	Industry					Industry
Financials	Financials	$	10,483	$	5,096	Financials	$	5,677	$	6,294
Utilities	Utilities	7,830		5,918		Utilities	4,562		5,656
Regional governments						Regional governments	1,839		2,052
Energy	Energy	5,785		2,587		Energy	1,480		2,851
Industrials						Industrials	1,287		1,433
Communications services						Communications services	1,036		1,051
Consumer staples						Consumer staples	707		687
Healthcare						Healthcare	509		565
Information technology						Information technology	468		480
Consumer Discretionary	Consumer Discretionary	3,185		3,069		Consumer Discretionary	453		290
Regional governments		1,495		963
Industrials		1,259		985
Information technology		928		1,060
Communications services		852		348
Sovereign governments		659		386
Healthcare		632		682
Materials	Materials	575		240		Materials	310		317
Consumer staples		510		324
Not-for-profit organizations	Not-for-profit organizations	411		531		Not-for-profit organizations	214		204
Insurance	Insurance	356		174		Insurance	174		185
Sovereign governments						Sovereign governments	162		410
Real estate	Real estate	181		280		Real estate	113		95
Other	Other	725		522		Other	335		343
Total	Total	$	35,866	$	23,165	Total	$	19,326	$	22,913

1.Counterparty credit ratings are determined internally by the CRM.

We are exposed to credit risk as a dealer in OTC derivatives. Credit risk with respect to derivative instruments arises from the possibility that a counterparty may fail to perform according to the terms of the contract. For more information on derivatives, see “Quantitative and Qualitative Disclosures about Risk—Credit Risk—Derivatives” in the ~~2021~~2022 Form 10-K and Note 6 to the financial statements.

Country Risk

Country risk exposure is the risk that events in, or that affect, a foreign country (any country other than the U.S.) might adversely affect us. We actively manage country risk exposure through a comprehensive risk management framework that combines credit and other market fundamentals and allows us to effectively identify, monitor and limit country risk. For a further discussion of our country risk exposure see “Quantitative and Qualitative Disclosures about Risk—Country and Other Risks” in the ~~2021~~2022 Form 10-K.

Top 10 Non-U.S. Country Exposures at March 31, ~~2022~~2023

$ in millions United Kingdom Germany Japan France India
Sovereign
Net inventory1
$ (544) $ 1,794 $ 3,557 $ 320 $ 1,946
Net counterparty exposure2
33 170 79 8 —
Exposure before hedges (511) 1,964 3,636 328 1,946
Hedges3
(303) (286) (113) (6) —
Net exposure $ (814) $ 1,678 $ 3,523 $ 322 $ 1,946
Non-sovereign
Net inventory1
$ 1,088 $ 561 $ 873 $ 661 $ 883
Net counterparty exposure2
17,657 3,180 4,702 3,445 1,315
Loans 3,997 1,531 426 536 220
Lending commitments 7,290 3,860 — 3,220 8
Exposure before hedges 30,032 9,132 6,001 7,862 2,426
Hedges3
(1,824) (1,350) (148) (2,075) —
Net exposure $ 28,208 $ 7,782 $ 5,853 $ 5,787 $ 2,426
Total net exposure $ 27,394 $ 9,460 $ 9,376 $ 6,109 $ 4,372


$ in millions	United Kingdom		Germany		Japan		France		Australia
Sovereign
Net inventory1	$	(419)	$	(611)	$	300	$	75	$	132
Net counterparty exposure2	10		118		196		12		88


Exposure before hedges	(409)		(493)		496		87		220
Hedges3	(56)		(273)		(187)		(6)		—
Net exposure	$	(465)	$	(766)	$	309	$	81	$	220

Non-sovereign
Net inventory1	$	1,491	$	190	$	1,140	$	17	$	498
Net counterparty exposure2	9,992		3,819		4,572		3,487		881
Loans	5,481		990		329		1,001		1,494
Lending commitments	6,760		4,108		—		2,742		1,084
Exposure before hedges	23,724		9,107		6,041		7,247		3,957
Hedges3	(2,026)		(1,706)		(625)		(2,210)		(297)
Net exposure	$	21,698	$	7,401	$	5,416	$	5,037	$	3,660
Total net exposure	$	21,233	$	6,635	$	5,725	$	5,118	$	3,880


~~March 2022 Form 10-Q~~			29


~~Table of Contents~~
~~Risk Disclosures~~


$ in millions	$ in millions	Spain		Canada		Brazil		Netherlands		Ireland		$ in millions	Brazil		China		India		Canada		Spain
Sovereign	Sovereign											Sovereign
Net inventory1	Net inventory1	$	(102)	$	387	$	3,030	$	274	$	147	Net inventory1	$	2,555	$	290	$	1,356	$	242	$	141
Net counterparty exposure2	Net counterparty exposure2	55		24		—		—		6		Net counterparty exposure2	5		197		—		67		51

Exposure before hedges	Exposure before hedges	(47)		411		3,030		274		153		Exposure before hedges	2,560		487		1,356		309		192
Hedges3	Hedges3	(8)		—		(135)		(17)		—		Hedges3	(195)		(65)		—		—		(8)
Net exposure	Net exposure	$	(55)	$	411	$	2,895	$	257	$	153	Net exposure	$	2,365	$	422	$	1,356	$	309	$	184

Non-sovereign	Non-sovereign											Non-sovereign
Net inventory1	Net inventory1	$	337	$	517	$	19	$	(15)	$	1,053	Net inventory1	$	167	$	2,048	$	1,028	$	510	$	305
Net counterparty exposure2	Net counterparty exposure2	1,271		1,530		488		1,319		663		Net counterparty exposure2	574		188		1,006		1,094		375
Loans	Loans	2,457		185		294		527		968		Loans	308		568		135		382		2,171
Lending commitments	Lending commitments	970		1,476		224		1,843		582		Lending commitments	404		652		—		1,381		857
Exposure before hedges	Exposure before hedges	5,035		3,708		1,025		3,674		3,266		Exposure before hedges	1,453		3,456		2,169		3,367		3,708
Hedges3	Hedges3	(952)		(108)		(39)		(492)		(4)		Hedges3	(42)		(125)		—		(183)		(584)
Net exposure	Net exposure	$	4,083	$	3,600	$	986	$	3,182	$	3,262	Net exposure	$	1,411	$	3,331	$	2,169	$	3,184	$	3,124
Total net exposure	Total net exposure	$	4,028	$	4,011	$	3,881	$	3,439	$	3,415	Total net exposure	$	3,776	$	3,753	$	3,525	$	3,493	$	3,308

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) is net of the benefit of collateral received and also is net by counterparty when legally enforceable master netting agreements are in place. For more information, see “Additional Information—Top 10 Non-U.S. Country Exposures” herein.

3.Amounts represent net 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~~the fair value of any receivable or payable. For further description of the contractual terms for purchased credit protection and whether they may limit the effectiveness of our hedges, see “Quantitative and Qualitative Disclosures about Risk—Credit Risk—Derivatives” in the ~~2021~~2022 Form 10-K.


			30			March 2023 Form 10-Q


Table of Contents
Risk Disclosures

Additional Information—Top 10 Non-U.S. Country Exposures

Collateral Held against Net Counterparty Exposure1


$ in millions		At March 31, ~~2022~~2023
Country of Risk	Collateral2
~~Germany~~	~~Spain and France~~	$	~~9,973~~
United Kingdom	U.K., U.S. and ~~Spain~~France	~~8,050~~$	8,122
Germany	France, Spain, and Portugal	6,442
Other	Japan, ~~Germany~~France, and ~~U.S.~~Spain	~~23,114~~15,217

1.The benefit of collateral received is reflected in the Top 10 Non-U.S. Country Exposures at March 31, ~~2022.~~2023.

2.Primarily consists of cash and government obligations of the countries listed.

Operational Risk

Operational risk refers to the risk of loss, or of damage to our reputation, resulting from inadequate or failed processes or systems, from human factors or from external events (e.g., cyber attacks or third-party vulnerabilities) that may manifest as, for example, loss of information, business disruption, theft and fraud, legal and compliance risks, or damage to physical assets. We may incur operational risk across the full scope of our business activities, including revenue-generating activities and support and control groups (e.g., information technology and trade processing). For a further discussion about our operational risk, see “Quantitative and Qualitative Disclosures about Risk—Operational Risk” in the ~~2021~~2022 Form 10-K.

Model Risk

Model risk refers to the potential for adverse consequences from decisions based on incorrect or misused model outputs. Model risk can lead to financial loss, poor business and strategic decision making or damage to our reputation. The risk inherent in a model is a function of the materiality, complexity and uncertainty around inputs and assumptions. Model risk is generated from the use of models impacting financial statements, regulatory filings, capital adequacy assessments and the formulation of strategy. For a further discussion about our model risk, see “Quantitative and Qualitative Disclosures about Risk—Model Risk” in the ~~2021~~2022 Form 10-K.

Liquidity Risk

Liquidity risk refers to the risk that we will be unable to finance our operations due to a loss of access to the capital markets or difficulty in liquidating our assets. Liquidity risk also encompasses our ability (or perceived ability) to meet our financial obligations without experiencing significant business disruption or reputational damage that may threaten our viability as a going concern. For a further discussion about our liquidity risk, see “Quantitative and Qualitative Disclosures about Risk—Liquidity Risk” in the ~~2021~~2022 Form 10-K and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” herein.

Legal and Compliance Risk

Legal and compliance risk includes the risk of legal or regulatory sanctions, material financial loss, including fines, penalties, judgments, damages and/or settlements, limitations on our business, or loss to reputation that we may suffer as a result of failure to comply with laws, regulations, rules, related self-regulatory organization standards and codes of conduct applicable to our business activities. This risk also includes contractual and commercial risk, such as the risk that a counterparty’s performance obligations will be unenforceable. It also includes compliance with AML, terrorist financing, and anti-corruption rules and regulations. For a further discussion about our legal and compliance risk, see “Quantitative and Qualitative Disclosures about Risk—Legal and Compliance Risk” in the ~~2021~~2022 Form 10-K.

Climate Risk

Climate change manifests as physical and transition risks. The physical risks of climate change include acute events, such as flooding, hurricanes, heatwaves and wildfires, and chronic, longer-term shifts in climate patterns, such as increasing global average temperatures, rising sea levels, and droughts. Transition risks are policy, legal, technological, and market changes to address climate risks and include changes in consumer behavior, shareholder preferences, and any additional regulatory and legislative requirements, such as carbon taxes. Climate risk, which is not expected to have a significant effect on our consolidated results of operations or financial condition in the near-term, is an overarching risk that can impact other categories of risk over the longer-term. For a further discussion about our climate risk, see “Quantitative and Qualitative Disclosures about Risk—Climate Risk” in the 2022 Form 10-K.

March ~~2022~~2023 Form 10-Q


Table of Contents

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of Morgan Stanley:

Results of Review of Interim Financial Information

We have reviewed the accompanying condensed consolidated balance sheet of Morgan Stanley and subsidiaries (the “Firm”) as of March 31, ~~2022,~~2023, and the related condensed consolidated income statements, comprehensive income statements, cash flow statements and statements of changes in total equity for the three-month periods ended March 31, ~~2022~~2023 and ~~2021,~~2022, and the related notes (collectively referred to as the “interim financial information”). Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial information for it to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Firm as of December 31, ~~2021,~~2022, and the related consolidated income statement, comprehensive income statement, cash flow statement and statement of changes in total equity for the year then ended (not presented herein) included in the Firm’s Annual Report on Form 10-K; and in our report dated February 24, ~~2022,~~2023, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, ~~2021~~2022 is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

Basis for Review Results

This interim financial information is the responsibility of the Firm’s management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Firm in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our reviews in accordance with the standards of the PCAOB. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.


/s/ Deloitte & Touche LLP
New York, New York
May ~~4, 2022~~2, 2023

March ~~2022~~2023 Form 10-Q


Table of Contents
Consolidated Income Statement (Unaudited)


		Three Months Ended March 31,						Three Months Ended March 31,
in millions, except per share data	in millions, except per share data		2022		2021		in millions, except per share data		2023		2022
Revenues	Revenues						Revenues
Investment banking	Investment banking		$	1,758	$	2,840	Investment banking		$	1,330	$	1,758
Trading	Trading		3,983		4,225		Trading		4,477		3,983
Investments	Investments		75		318		Investments		145		75
Commissions and fees	Commissions and fees		1,416		1,626		Commissions and fees		1,239		1,416
Asset management	Asset management		5,119		4,398		Asset management		4,728		5,119
Other	Other		234		284		Other		252		234
Total non-interest revenues	Total non-interest revenues		12,585		13,691		Total non-interest revenues		12,171		12,585
Interest income	Interest income		2,650		2,437		Interest income		10,870		2,650
Interest expense	Interest expense		434		409		Interest expense		8,524		434
Net interest	Net interest		2,216		2,028		Net interest		2,346		2,216
Net revenues	Net revenues		14,801		15,719		Net revenues		14,517		14,801
Provision for credit losses	Provision for credit losses		57		(98)		Provision for credit losses		234		57
Non-interest expenses	Non-interest expenses						Non-interest expenses
Compensation and benefits	Compensation and benefits		6,274		6,798		Compensation and benefits		6,410		6,274
Brokerage, clearing and exchange fees	Brokerage, clearing and exchange fees		882		910		Brokerage, clearing and exchange fees		881		882
Information processing and communications	Information processing and communications		829		733		Information processing and communications		915		829
Professional services	Professional services		705		624		Professional services		710		705
Occupancy and equipment	Occupancy and equipment		427		405		Occupancy and equipment		440		427
Marketing and business development	Marketing and business development		175		146		Marketing and business development		247		175
Other	Other		864		857		Other		920		864
Total non-interest expenses	Total non-interest expenses		10,156		10,473		Total non-interest expenses		10,523		10,156
Income before provision for income taxes	Income before provision for income taxes		4,588		5,344		Income before provision for income taxes		3,760		4,588
Provision for income taxes	Provision for income taxes		873		1,176		Provision for income taxes		727		873
Net income	Net income		$	3,715	$	4,168	Net income		$	3,033	$	3,715
Net income applicable to noncontrolling interests	Net income applicable to noncontrolling interests		49		48		Net income applicable to noncontrolling interests		53		49
Net income applicable to Morgan Stanley	Net income applicable to Morgan Stanley		$	3,666	$	4,120	Net income applicable to Morgan Stanley		$	2,980	$	3,666
Preferred stock dividends	Preferred stock dividends		124		138		Preferred stock dividends		144		124
Earnings applicable to Morgan Stanley common shareholders	Earnings applicable to Morgan Stanley common shareholders		$	3,542	$	3,982	Earnings applicable to Morgan Stanley common shareholders		$	2,836	$	3,542
Earnings per common share	Earnings per common share						Earnings per common share
Basic	Basic		$	2.04	$	2.22	Basic		$	1.72	$	2.04
Diluted	Diluted		$	2.02	$	2.19	Diluted		$	1.70	$	2.02
Average common shares outstanding	Average common shares outstanding						Average common shares outstanding
Basic	Basic		1,733		1,795		Basic		1,645		1,733
Diluted	Diluted		1,755		1,818		Diluted		1,663		1,755

Consolidated Comprehensive Income Statement

(Unaudited)


		Three Months Ended March 31,						Three Months Ended March 31,
$ in millions	$ in millions		2022		2021		$ in millions		2023		2022
Net income	Net income		$	3,715	$	4,168	Net income		$	3,033	$	3,715
Other comprehensive income (loss), net of tax:	Other comprehensive income (loss), net of tax:						Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	Foreign currency translation adjustments		(105)		(219)		Foreign currency translation adjustments		20		(105)
Change in net unrealized gains (losses) on available-for-sale securities	Change in net unrealized gains (losses) on available-for-sale securities		(2,395)		(776)		Change in net unrealized gains (losses) on available-for-sale securities		512		(2,395)
Pension and other	Pension and other		5		5		Pension and other		(1)		5
Change in net debt valuation adjustment	Change in net debt valuation adjustment		660		137		Change in net debt valuation adjustment		(15)		660
Net change in cash flow hedges							Net change in cash flow hedges		7		—
Total other comprehensive income (loss)	Total other comprehensive income (loss)		$	(1,835)	$	(853)	Total other comprehensive income (loss)		$	523	$	(1,835)
Comprehensive income	Comprehensive income		$	1,880	$	3,315	Comprehensive income		$	3,556	$	1,880
Net income applicable to noncontrolling interests	Net income applicable to noncontrolling interests		49		48		Net income applicable to noncontrolling interests		53		49
Other comprehensive income (loss) applicable to noncontrolling interests	Other comprehensive income (loss) applicable to noncontrolling interests		(35)		(61)		Other comprehensive income (loss) applicable to noncontrolling interests		(19)		(35)
Comprehensive income applicable to Morgan Stanley	Comprehensive income applicable to Morgan Stanley		$	1,866	$	3,328	Comprehensive income applicable to Morgan Stanley		$	3,522	$	1,866


~~March 2022 Form 10-Q~~			32			See Notes to Consolidated Financial Statements			33			March 2023 Form 10-Q


Table of Contents
Consolidated Balance Sheet


$ in millions, except share data	$ in millions, except share data	(Unaudited) At March 31, 2022		At December 31, 2021		$ in millions, except share data	(Unaudited) At March 31, 2023		At December 31, 2022
Assets	Assets					Assets
Cash and cash equivalents	Cash and cash equivalents	$	136,086	$	127,725	Cash and cash equivalents	$	111,258	$	128,127
Trading assets at fair value ($107,196 and $104,186 were pledged to various parties)		296,881		294,869
Investment securities (includes $90,354 and $102,830 at fair value)		170,793		182,998
Securities purchased under agreements to resell (includes $2 and $7 at fair value)		127,767		119,999
Trading assets at fair value ($127,205 and $124,411 were pledged to various parties)						Trading assets at fair value ($127,205 and $124,411 were pledged to various parties)	320,301		301,315
Investment securities:						Investment securities:
Available-for-sale at fair value (amortized cost of $88,738 and $89,772)						Available-for-sale at fair value (amortized cost of $88,738 and $89,772)	83,932		84,297
Held-to-maturity (fair value of $64,419 and $65,006)						Held-to-maturity (fair value of $64,419 and $65,006)	74,012		75,634
Securities purchased under agreements to resell (includes $8 and $8 at fair value)						Securities purchased under agreements to resell (includes $8 and $8 at fair value)	121,885		113,907
Securities borrowed	Securities borrowed	150,995		129,713		Securities borrowed	146,216		133,374
Customer and other receivables	Customer and other receivables	94,804		96,018		Customer and other receivables	74,095		78,540
Loans:	Loans:					Loans:
Held for investment (net of allowance for credit losses of $679 and $654)		182,247		174,302
Held for investment (net of allowance for credit losses of $970 and $839)						Held for investment (net of allowance for credit losses of $970 and $839)	199,550		198,997
Held for sale	Held for sale	14,013		13,832		Held for sale	15,146		14,788
Goodwill	Goodwill	16,825		16,833		Goodwill	16,657		16,652
Intangible assets (net of accumulated amortization of $3,972 and $3,819)		8,244		8,360
Intangible assets (net of accumulated amortization of $4,404 and $4,253)						Intangible assets (net of accumulated amortization of $4,404 and $4,253)	7,470		7,618
Other assets	Other assets	23,578		23,491		Other assets	29,382		26,982
Total assets	Total assets	$	1,222,233	$	1,188,140	Total assets	$	1,199,904	$	1,180,231
Liabilities	Liabilities					Liabilities
Deposits (includes $2,013 and $1,940 at fair value)		$	360,840	$	347,574
Deposits (includes $5,042 and $4,796 at fair value)						Deposits (includes $5,042 and $4,796 at fair value)	$	347,523	$	356,646
Trading liabilities at fair value	Trading liabilities at fair value	176,580		158,328		Trading liabilities at fair value	170,764		154,438
Securities sold under agreements to repurchase (includes $964 and $791 at fair value)		60,068		62,188
Securities sold under agreements to repurchase (includes $872 and $864 at fair value)						Securities sold under agreements to repurchase (includes $872 and $864 at fair value)	60,491		62,534
Securities loaned	Securities loaned	14,222		12,299		Securities loaned	15,588		15,679
Other secured financings (includes $4,751 and $5,133 at fair value)		8,808		10,041
Other secured financings (includes $5,005 and $4,550 at fair value)						Other secured financings (includes $5,005 and $4,550 at fair value)	8,670		8,158
Customer and other payables	Customer and other payables	243,609		228,685		Customer and other payables	220,700		216,134
Other liabilities and accrued expenses	Other liabilities and accrued expenses	24,214		29,300		Other liabilities and accrued expenses	24,032		27,353
Borrowings (includes $75,963 and $76,340 at fair value)		229,817		233,127
Borrowings (includes $86,422 and $78,720 at fair value)						Borrowings (includes $86,422 and $78,720 at fair value)	250,182		238,058
Total liabilities	Total liabilities	1,118,158		1,081,542		Total liabilities	1,097,950		1,079,000
Commitments and contingent liabilities (see Note 13)	Commitments and contingent liabilities (see Note 13)			0		Commitments and contingent liabilities (see Note 13)
0Equity
Equity						Equity
Morgan Stanley shareholders’ equity:	Morgan Stanley shareholders’ equity:					Morgan Stanley shareholders’ equity:
Preferred stock	Preferred stock	7,750		7,750		Preferred stock	8,750		8,750
Common stock, $0.01 par value:	Common stock, $0.01 par value:					Common stock, $0.01 par value:
Shares authorized: 3,500,000,000; Shares issued: 2,038,893,979; Shares outstanding: 1,756,153,374 and 1,772,226,530		20		20
Shares authorized: 3,500,000,000; Shares issued: 2,038,893,979; Shares outstanding: 1,670,318,320 and 1,675,487,409						Shares authorized: 3,500,000,000; Shares issued: 2,038,893,979; Shares outstanding: 1,670,318,320 and 1,675,487,409	20		20
Additional paid-in capital	Additional paid-in capital	28,007		28,841		Additional paid-in capital	28,856		29,339
Retained earnings	Retained earnings	91,722		89,432		Retained earnings	96,392		94,862
Employee stock trusts	Employee stock trusts	4,975		3,955		Employee stock trusts	5,343		4,881
Accumulated other comprehensive income (loss)	Accumulated other comprehensive income (loss)	(4,902)		(3,102)		Accumulated other comprehensive income (loss)	(5,711)		(6,253)
Common stock held in treasury at cost, $0.01 par value (282,740,605 and 266,667,449 shares)		(19,696)		(17,500)
Common stock held in treasury at cost, $0.01 par value (368,575,659 and 363,406,570 shares)						Common stock held in treasury at cost, $0.01 par value (368,575,659 and 363,406,570 shares)	(27,481)		(26,577)
Common stock issued to employee stock trusts	Common stock issued to employee stock trusts	(4,975)		(3,955)		Common stock issued to employee stock trusts	(5,343)		(4,881)
Total Morgan Stanley shareholders’ equity	Total Morgan Stanley shareholders’ equity	102,901		105,441		Total Morgan Stanley shareholders’ equity	100,826		100,141
Noncontrolling interests	Noncontrolling interests	1,174		1,157		Noncontrolling interests	1,128		1,090
Total equity	Total equity	104,075		106,598		Total equity	101,954		101,231
Total liabilities and equity	Total liabilities and equity	$	1,222,233	$	1,188,140	Total liabilities and equity	$	1,199,904	$	1,180,231


March 2023 Form 10-Q			34			See Notes to Consolidated Financial Statements			33			~~March 2022 Form 10-Q~~


Table of Contents
Consolidated Statement of Changes in Total Equity (Unaudited)


		Three Months Ended March 31,						Three Months Ended March 31,
$ in millions	$ in millions		2022		2021		$ in millions		2023		2022
Preferred Stock	Preferred Stock						Preferred Stock
Beginning balance			$	7,750	$	9,250
Beginning and ending balance							Beginning and ending balance		$	8,750	$	7,750

Redemption of preferred stock			—		(1,500)
Ending balance			7,750		7,750

Common Stock	Common Stock						Common Stock
Beginning and ending balance	Beginning and ending balance		20		20		Beginning and ending balance		20		20
Additional Paid-in Capital	Additional Paid-in Capital						Additional Paid-in Capital
Beginning balance	Beginning balance		28,841		25,546		Beginning balance		29,339		28,841
Share-based award activity	Share-based award activity		(834)		(332)		Share-based award activity		(483)		(834)

Issuance of common stock for the acquisition of Eaton Vance			—		2,185
Other net increases (decreases)			—		7

Ending balance	Ending balance		28,007		27,406		Ending balance		28,856		28,007
Retained Earnings	Retained Earnings						Retained Earnings
Beginning balance	Beginning balance		89,432		78,694		Beginning balance		94,862		89,432
Net income applicable to Morgan Stanley	Net income applicable to Morgan Stanley		3,666		4,120		Net income applicable to Morgan Stanley		2,980		3,666
Preferred stock dividends1	Preferred stock dividends1		(124)		(138)		Preferred stock dividends1		(144)		(124)
Common stock dividends1	Common stock dividends1		(1,252)		(635)		Common stock dividends1		(1,305)		(1,252)
Other net increases (decreases)	Other net increases (decreases)		—		(7)		Other net increases (decreases)		(1)		—
Ending balance	Ending balance		91,722		82,034		Ending balance		96,392		91,722
Employee Stock Trusts	Employee Stock Trusts						Employee Stock Trusts
Beginning balance	Beginning balance		3,955		3,043		Beginning balance		4,881		3,955
Share-based award activity	Share-based award activity		1,020		818		Share-based award activity		462		1,020
Ending balance	Ending balance		4,975		3,861		Ending balance		5,343		4,975
Accumulated Other Comprehensive Income (Loss)	Accumulated Other Comprehensive Income (Loss)						Accumulated Other Comprehensive Income (Loss)
Beginning balance	Beginning balance		(3,102)		(1,962)		Beginning balance		(6,253)		(3,102)
Net change in Accumulated other comprehensive income (loss)	Net change in Accumulated other comprehensive income (loss)		(1,800)		(792)		Net change in Accumulated other comprehensive income (loss)		542		(1,800)
Ending balance	Ending balance		(4,902)		(2,754)		Ending balance		(5,711)		(4,902)
Common Stock Held in Treasury at Cost	Common Stock Held in Treasury at Cost						Common Stock Held in Treasury at Cost
Beginning balance	Beginning balance		(17,500)		(9,767)		Beginning balance		(26,577)		(17,500)
Share-based award activity	Share-based award activity		1,485		1,020		Share-based award activity		1,304		1,485
Repurchases of common stock and employee tax withholdings	Repurchases of common stock and employee tax withholdings		(3,681)		(2,582)		Repurchases of common stock and employee tax withholdings		(2,208)		(3,681)
Issuance of common stock for the acquisition of Eaton Vance			—		3,132
Ending balance	Ending balance		(19,696)		(8,197)		Ending balance		(27,481)		(19,696)
Common Stock Issued to Employee Stock Trusts	Common Stock Issued to Employee Stock Trusts						Common Stock Issued to Employee Stock Trusts
Beginning balance	Beginning balance		(3,955)		(3,043)		Beginning balance		(4,881)		(3,955)
Share-based award activity	Share-based award activity		(1,020)		(818)		Share-based award activity		(462)		(1,020)
Ending balance	Ending balance		(4,975)		(3,861)		Ending balance		(5,343)		(4,975)
Noncontrolling Interests	Noncontrolling Interests						Noncontrolling Interests
Beginning balance	Beginning balance		1,157		1,368		Beginning balance		1,090		1,157
Net income applicable to noncontrolling interests	Net income applicable to noncontrolling interests		49		48		Net income applicable to noncontrolling interests		53		49
Net change in Accumulated other comprehensive income (loss) applicable to noncontrolling interests	Net change in Accumulated other comprehensive income (loss) applicable to noncontrolling interests		(35)		(61)		Net change in Accumulated other comprehensive income (loss) applicable to noncontrolling interests		(19)		(35)
Other net increases (decreases)	Other net increases (decreases)		3		(26)		Other net increases (decreases)		4		3
Ending balance	Ending balance		1,174		1,329		Ending balance		1,128		1,174
Total Equity	Total Equity		$	104,075	$	107,588	Total Equity		$	101,954	$	104,075

1.See Note 16 for information regarding dividends per share for each class of stock.


~~March 2022 Form 10-Q~~			34			See Notes to Consolidated Financial Statements			35			March 2023 Form 10-Q


Table of Contents
Consolidated Cash Flow Statement (Unaudited)


		Three Months Ended March 31,					Three Months Ended March 31,
$ in millions	$ in millions	2022		2021		$ in millions	2023		2022
Cash flows from operating activities	Cash flows from operating activities					Cash flows from operating activities
Net income	Net income	$	3,715	$	4,168	Net income	$	3,033	$	3,715
Adjustments to reconcile net income to net cash provided by (used for) operating activities:	Adjustments to reconcile net income to net cash provided by (used for) operating activities:					Adjustments to reconcile net income to net cash provided by (used for) operating activities:
Stock-based compensation expense	Stock-based compensation expense	431		518		Stock-based compensation expense	558		431
Depreciation and amortization	Depreciation and amortization	942		887		Depreciation and amortization	940		942
Provision for credit losses	Provision for credit losses	57		(98)		Provision for credit losses	234		57
Other operating adjustments	Other operating adjustments	51		(95)		Other operating adjustments	66		51
Changes in assets and liabilities:	Changes in assets and liabilities:					Changes in assets and liabilities:
Trading assets, net of Trading liabilities	Trading assets, net of Trading liabilities	5,069		20,463		Trading assets, net of Trading liabilities	2,582		5,069
Securities borrowed	Securities borrowed	(21,282)		10,242		Securities borrowed	(12,842)		(21,282)
Securities loaned	Securities loaned	1,923		695		Securities loaned	(91)		1,923
Customer and other receivables and other assets	Customer and other receivables and other assets	1,227		(18,721)		Customer and other receivables and other assets	4,899		1,227
Customer and other payables and other liabilities	Customer and other payables and other liabilities	17,994		3,270		Customer and other payables and other liabilities	777		17,994
Securities purchased under agreements to resell	Securities purchased under agreements to resell	(7,768)		1,513		Securities purchased under agreements to resell	(7,978)		(7,768)
Securities sold under agreements to repurchase	Securities sold under agreements to repurchase	(2,120)		4,037		Securities sold under agreements to repurchase	(2,043)		(2,120)
Net cash provided by (used for) operating activities	Net cash provided by (used for) operating activities	239		26,879		Net cash provided by (used for) operating activities	(9,865)		239
Cash flows from investing activities	Cash flows from investing activities					Cash flows from investing activities
Proceeds from (payments for):	Proceeds from (payments for):					Proceeds from (payments for):
Other assets—Premises, equipment and software, net		(652)		(525)
Other assets—Premises, equipment and software						Other assets—Premises, equipment and software	(719)		(652)
Changes in loans, net	Changes in loans, net	(7,479)		(6,474)		Changes in loans, net	(822)		(7,479)
Investment securities:
AFS securities1:						AFS securities1:
Purchases	Purchases	(17,459)		(32,333)		Purchases	(3,475)		(14,125)
Proceeds from sales	Proceeds from sales	18,469		6,825		Proceeds from sales	1,466		18,469
Proceeds from paydowns and maturities	Proceeds from paydowns and maturities	7,403		12,638		Proceeds from paydowns and maturities	3,460		4,301
Cash paid as part of the Eaton Vance acquisition, net of cash acquired		—		(2,648)
HTM securities1:						HTM securities1:
Purchases						Purchases	—		(3,334)
Proceeds from paydowns and maturities						Proceeds from paydowns and maturities	1,617		3,102
Other investing activities	Other investing activities	(124)		(44)		Other investing activities	(2,568)		(124)
Net cash provided by (used for) investing activities	Net cash provided by (used for) investing activities	158		(22,561)		Net cash provided by (used for) investing activities	(1,041)		158
Cash flows from financing activities	Cash flows from financing activities					Cash flows from financing activities
Net proceeds from (payments for):	Net proceeds from (payments for):					Net proceeds from (payments for):
Other secured financings	Other secured financings	(636)		(3,798)		Other secured financings	356		(636)
Deposits	Deposits	5,834		12,391		Deposits	(9,084)		5,834
Proceeds from issuance of Borrowings	Proceeds from issuance of Borrowings	20,284		24,112		Proceeds from issuance of Borrowings	21,219		20,284
Payments for:	Payments for:					Payments for:
Borrowings	Borrowings	(11,094)		(19,774)		Borrowings	(15,201)		(11,094)
Repurchases of common stock and employee tax withholdings	Repurchases of common stock and employee tax withholdings	(3,681)		(2,582)		Repurchases of common stock and employee tax withholdings	(2,205)		(3,681)
Cash dividends	Cash dividends	(1,314)		(755)		Cash dividends	(1,406)		(1,314)
Other financing activities	Other financing activities	(102)		(30)		Other financing activities	33		(102)
Net cash provided by (used for) financing activities	Net cash provided by (used for) financing activities	9,291		9,564		Net cash provided by (used for) financing activities	(6,288)		9,291
Effect of exchange rate changes on cash and cash equivalents	Effect of exchange rate changes on cash and cash equivalents	(1,327)		(1,418)		Effect of exchange rate changes on cash and cash equivalents	325		(1,327)
Net increase (decrease) in cash and cash equivalents	Net increase (decrease) in cash and cash equivalents	8,361		12,464		Net increase (decrease) in cash and cash equivalents	(16,869)		8,361
Cash and cash equivalents, at beginning of period	Cash and cash equivalents, at beginning of period	127,725		105,654		Cash and cash equivalents, at beginning of period	128,127		127,725
Cash and cash equivalents, at end of period	Cash and cash equivalents, at end of period	$	136,086	$	118,118	Cash and cash equivalents, at end of period	$	111,258	$	136,086
Supplemental Disclosure of Cash Flow Information	Supplemental Disclosure of Cash Flow Information					Supplemental Disclosure of Cash Flow Information
Cash payments for:	Cash payments for:					Cash payments for:
Interest	Interest	$	623	$	586	Interest	$	8,912	$	623
Income taxes, net of refunds	Income taxes, net of refunds	383		339		Income taxes, net of refunds	307		383

1.The prior period amounts have been revised to present Purchases, Proceeds from sales and Proceeds from paydowns and maturities separately between AFS securities and HTM securities.


March 2023 Form 10-Q			36			See Notes to Consolidated Financial Statements			35			~~March 2022 Form 10-Q~~


Table of Contents
Notes to Consolidated Financial Statements (Unaudited)

1. Introduction and Basis of Presentation

The Firm

Morgan Stanley is a global financial services firm that maintains significant market positions in each of its business segments—Institutional Securities, Wealth Management and Investment Management. Morgan Stanley, through its subsidiaries and affiliates, provides a wide variety of products and services to a large and diversified group of clients and customers, including corporations, governments, financial institutions and individuals. Unless the context otherwise requires, the terms “Morgan Stanley” or the “Firm” mean Morgan Stanley (the “Parent Company”) together with its consolidated subsidiaries. Disclosures reflect the effects of the acquisition of Eaton Vance Corp. (“Eaton Vance”) prospectively from the March 1, 2021 acquisition date. See Note 3 to the financial statements in the 2021 Form 10-K for further information. See the “Glossary of Common Terms and Acronyms” for the definition of certain terms and acronyms used throughout this Form 10-Q.

A description of the clients and principal products and services of each of the Firm’s business segments is as follows:

income, alternatives and solutions, and liquidity and overlay services. Institutional clients include defined benefit/defined contribution plans, foundations, endowments, government entities, sovereign wealth funds, insurance companies, third-party fund sponsors and corporations. Individual clients are

generally served through intermediaries, including affiliated and non-affiliated distributors.

Basis of Financial Information

The financial statements are prepared in accordance with U.S. GAAP, which requires the Firm to make estimates and assumptions regarding the valuations of certain financial instruments, the valuations of goodwill and intangible assets, the outcome of legal and tax matters, deferred tax assets, ACL, and other matters that affect its financial statements and related disclosures. The Firm believes that the estimates utilized in the preparation of its financial statements are prudent and reasonable. Actual results could differ materially from these estimates.

The ~~notes~~Notes are an integral part of the Firm’s financial statements. The Firm has evaluated subsequent events for adjustment to or disclosure in these financial statements through the date of this report and has not identified any recordable or disclosable events not otherwise reported in these financial statements or the notes thereto.

The accompanying financial statements should be read in conjunction with the Firm’s financial statements and notes thereto included in the ~~2021~~2022 Form 10-K. Certain footnote disclosures included in the ~~2021~~2022 Form 10-K have been condensed or omitted from these financial statements as they are not required for interim reporting under U.S. GAAP. The financial statements reflect all adjustments of a normal, recurring nature that are, in the opinion of management, necessary for the fair presentation of the results for the interim period. The results of operations for interim periods are not necessarily indicative of results for the entire year.

Consolidation

The financial statements include the accounts of the Firm, its wholly owned subsidiaries and other entities in which the Firm has a controlling financial interest, including certain VIEs (see Note 14). Intercompany balances and transactions have been eliminated. For consolidated subsidiaries that are not wholly owned, the third-party holdings of equity interests are referred to as Noncontrolling interests. The net income attributable to Noncontrolling interests for such subsidiaries is presented as Net income applicable to noncontrolling interests in the income statement. The portion of shareholders’ equity that is attributable to noncontrolling interests for such subsidiaries is presented as Noncontrolling interests, a component of Total equity, in the balance sheet.

For a discussion of the Firm’s significant regulated U.S. and international subsidiaries and its involvement with VIEs, see Note 1 to the financial statements in the ~~2021~~2022 Form 10-K.


~~March 2022 Form 10-Q~~			36


~~Table of Contents~~
Notes to Consolidated Financial Statements (Unaudited)

2. Significant Accounting Policies

For a detailed discussion about the Firm’s significant accounting policies and for further information on accounting ~~updates adopted, see Note 2 to the financial statements in the 2021 Form 10-K.~~

~~During the three months ended March 31, 2022 (“current quarter”), there were no significant updates to the Firm’s significant accounting policies.~~

~~3. Cash and Cash Equivalents~~

$ in millions At
March 31,
2022 At
December 31,
2021
Cash and due from banks $ 9,086 $ 8,394
Interest bearing deposits with banks 127,000 119,331
Total Cash and cash equivalents $ 136,086 $ 127,725
Restricted cash $ 41,315 $ 40,887

~~For additional information on cash and cash equivalents, including restricted cash, see Note 2 to the financial statements in the 2021 Form 10-K.~~

~~4. Fair Values~~

~~Recurring Fair Value Measurements~~

~~Assets and Liabilities Measured at Fair Value on a Recurring Basis~~

At March 31, 2022
$ in millions Level 1 Level 2 Level 3
Netting1
Total
Assets at fair value
Trading assets:
U.S. Treasury and agency securities $ 44,038 $ 19,680 $ 8 $ — $ 63,726
Other sovereign government obligations 24,449 7,422 188 — 32,059
State and municipal securities — 1,664 — — 1,664
MABS — 929 351 — 1,280
Loans and lending commitments2
— 9,349 3,141 — 12,490
Corporate and other debt — 28,751 1,753 — 30,504
Corporate equities3
86,106 790 239 — 87,135
Derivative and other contracts:
Interest rate 10,124 163,417 1,086 — 174,627
Credit — 10,860 646 — 11,506
Foreign exchange 39 101,193 63 — 101,295
Equity 997 64,521 391 — 65,909
Commodity and other 12,202 33,688 3,416 — 49,306
Netting1
(17,166) (271,135) (993) (55,468) (344,762)
Total derivative and other contracts 6,196 102,544 4,609 (55,468) 57,881
Investments4
661 761 1,120 — 2,542
Physical commodities — 2,709 — — 2,709
Total trading assets4
161,450 174,599 11,409 (55,468) 291,990
Investment securities—AFS 56,479 33,875 — — 90,354
Securities purchased under agreements to resell — 2 — — 2
Total assets at fair value $ 217,929 $ 208,476 $ 11,409 $ (55,468) $ 382,346

At March 31, 2022
$ in millions Level 1 Level 2 Level 3
Netting1
Total
Liabilities at fair value
Deposits $ — $ 1,987 $ 26 $ — $ 2,013
Trading liabilities:
U.S. Treasury and agency securities 15,090 112 — — 15,202
Other sovereign government obligations 24,751 2,911 2 — 27,664
Corporate and other debt — 11,081 17 — 11,098
Corporate equities3
80,037 191 29 — 80,257
Derivative and other contracts:
Interest rate 9,127 155,763 452 — 165,342
Credit — 10,949 553 — 11,502
Foreign exchange 31 93,168 96 — 93,295
Equity 1,184 71,669 1,045 — 73,898
Commodity and other 12,716 28,140 1,982 — 42,838
Netting1
(17,166) (271,135) (993) (55,224) (344,518)
Total derivative and other contracts 5,892 88,554 3,135 (55,224) 42,357
Total trading liabilities 125,770 102,849 3,183 (55,224) 176,578
Securities sold under agreements to repurchase — 448 516 — 964
Other secured financings — 4,631 120 — 4,751
Borrowings — 73,564 2,399 — 75,963
Total liabilities at fair value $ 125,770 $ 183,479 $ 6,244 $ (55,224) $ 260,269

At December 31, 2021
$ in millions Level 1 Level 2 Level 3
Netting1
Total
Assets at fair value
Trading assets:
U.S. Treasury and agency securities $ 45,970 $ 29,749 $ 2 $ — $ 75,721
Other sovereign government obligations 28,041 4,533 211 — 32,785
State and municipal securities — 1,905 13 — 1,918
MABS — 1,237 344 — 1,581
Loans and lending commitments2
— 8,821 3,806 — 12,627
Corporate and other debt — 27,309 1,973 — 29,282
Corporate equities3
91,630 832 115 — 92,577
Derivative and other contracts:
Interest rate 1,364 153,048 1,153 — 155,565
Credit — 8,441 509 — 8,950
Foreign exchange 28 74,571 132 — 74,731
Equity 1,562 68,519 251 — 70,332
Commodity and other 4,462 20,194 3,057 — 27,713
Netting1
(5,696) (241,814) (794) (50,833) (299,137)
Total derivative and other contracts 1,720 82,959 4,308 (50,833) 38,154
Investments4
735 846 1,125 — 2,706
Physical commodities — 2,771 — — 2,771
Total trading assets4
168,096 160,962 11,897 (50,833) 290,122
Investment securities—AFS 59,021 43,809 — — 102,830
Securities purchased under agreements to resell — 7 — — 7
Total assets at fair value $ 227,117 $ 204,778 $ 11,897 $ (50,833) $ 392,959


			37			March ~~2022~~2023 Form 10-Q


Table of Contents
Notes to Consolidated Financial Statements (Unaudited)

At December 31, 2021
$ in millions Level 1 Level 2 Level 3
Netting1
Total
Liabilities at fair value
Deposits $ — $ 1,873 $ 67 $ — $ 1,940
Trading liabilities:
U.S. Treasury and agency securities 16,433 319 — — 16,752
Other sovereign government obligations 20,771 2,062 — — 22,833
Corporate and other debt — 8,707 16 — 8,723
Corporate equities3
75,181 226 45 — 75,452
Derivative and other contracts:
Interest rate 1,087 145,670 445 — 147,202
Credit — 9,090 411 — 9,501
Foreign exchange 19 73,096 80 — 73,195
Equity 2,119 77,363 1,196 — 80,678
Commodity and other 4,563 16,837 1,528 — 22,928
Netting1
(5,696) (241,814) (794) (50,632) (298,936)
Total derivative and other contracts 2,092 80,242 2,866 (50,632) 34,568
Total trading liabilities 114,477 91,556 2,927 (50,632) 158,328
Securities sold under agreements to repurchase — 140 651 — 791
Other secured financings — 4,730 403 — 5,133
Borrowings — 74,183 2,157 — 76,340
Total liabilities at fair value $ 114,477 $ 172,482 $ 6,205 $ (50,632) $ 242,532
updates adopted in the prior year, see Note 2 to the financial statements in the 2022 Form 10-K.

During the three months ended March 31, 2023 there were no significant updates to the Firm’s significant accounting policies, other than for the accounting update adopted.

Accounting Update Adopted in 2023

Financial Instruments - Credit Losses

The Firm adopted the Financial Instruments-Credit Losses accounting update on January 1, 2023, with no impact on the Firm’s financial condition or results of operations upon adoption.

This accounting update eliminates the accounting guidance for troubled debt restructurings (“TDRs”) and requires new disclosures regarding certain modifications of financing receivables (i.e., principal forgiveness, interest rate reductions, other-than-insignificant payment delays and term extensions) to borrowers experiencing financial difficulty. The update also requires disclosure of current period gross charge-offs by year of origination for financing receivables measured at amortized cost. Refer to Note 9, Loans, Lending Commitments and Related Allowance for Credit Losses, for the new disclosures.

3. Cash and Cash Equivalents


$ in millions	At March 31, 2023		At December 31, 2022
Cash and due from banks	$	5,336	$	5,409
Interest bearing deposits with banks	105,922		122,718
Total Cash and cash equivalents	$	111,258	$	128,127
Restricted cash	$	33,229	$	35,380

For additional information on cash and cash equivalents, including restricted cash, see Note 2 to the financial statements in the 2022 Form 10-K.

4. Fair Values

Recurring Fair Value Measurements

Assets and Liabilities Measured at Fair Value on a Recurring Basis


	At March 31, 2023
$ in millions	Level 1		Level 2		Level 3		Netting1		Total
Assets at fair value
Trading assets:
U.S. Treasury and agency securities	$	53,525	$	40,345	$	1	$	—	$	93,871
Other sovereign government obligations	29,842		5,785		196		—		35,823
State and municipal securities	—		1,685		3		—		1,688
MABS	—		1,540		454		—		1,994
Loans and lending commitments2	—		5,974		2,057		—		8,031
Corporate and other debt	—		27,804		2,243		—		30,047
Corporate equities3	97,102		944		144		—		98,190
Derivative and other contracts:
Interest rate	5,112		153,365		647		—		159,124
Credit	—		9,437		356		—		9,793
Foreign exchange	64		83,371		180		—		83,615
Equity	1,900		46,948		307		—		49,155
Commodity and other	4,184		14,300		3,546		—		22,030
Netting1	(10,169)		(233,264)		(1,103)		(38,758)		(283,294)
Total derivative and other contracts	1,091		74,157		3,933		(38,758)		40,423
Investments4	795		711		955		—		2,461
Physical commodities	—		2,349		—		—		2,349
Total trading assets4	182,355		161,294		9,986		(38,758)		314,877
Investment securities—AFS	53,047		30,885		—		—		83,932
Securities purchased under agreements to resell	—		8		—		—		8
Total assets at fair value	$	235,402	$	192,187	$	9,986	$	(38,758)	$	398,817


	At March 31, 2023
$ in millions	Level 1		Level 2		Level 3		Netting1		Total
Liabilities at fair value
Deposits	$	—	$	5,013	$	29	$	—	$	5,042
Trading liabilities:
U.S. Treasury and agency securities	23,790		32		—		—		23,822
Other sovereign government obligations	35,965		2,531		73		—		38,569
Corporate and other debt	—		11,007		46		—		11,053
Corporate equities3	67,878		371		41		—		68,290
Derivative and other contracts:
Interest rate	5,094		145,101		864		—		151,059
Credit	—		9,703		308		—		10,011
Foreign exchange	55		81,981		114		—		82,150
Equity	2,194		52,453		1,084		—		55,731
Commodity and other	4,616		12,695		1,947		—		19,258
Netting1	(10,169)		(233,264)		(1,103)		(44,644)		(289,180)
Total derivative and other contracts	1,790		68,669		3,214		(44,644)		29,029
Total trading liabilities	129,423		82,610		3,374		(44,644)		170,763
Securities sold under agreements to repurchase	—		358		514		—		872
Other secured financings	—		4,890		115		—		5,005
Borrowings	—		84,773		1,649		—		86,422
Total liabilities at fair value	$	129,423	$	177,644	$	5,681	$	(44,644)	$	268,104


March 2023 Form 10-Q			38


Table of Contents
Notes to Consolidated Financial Statements (Unaudited)


	At December 31, 2022
$ in millions	Level 1		Level 2		Level 3		Netting1		Total
Assets at fair value
Trading assets:
U.S. Treasury and agency securities	$	38,462	$	42,263	$	17	$	—	$	80,742
Other sovereign government obligations	24,644		4,769		169		—		29,582
State and municipal securities	—		1,503		145		—		1,648
MABS	—		1,774		416		—		2,190
Loans and lending commitments2	—		6,380		2,017		—		8,397
Corporate and other debt	—		23,351		2,096		—		25,447
Corporate equities3	97,869		1,019		116		—		99,004
Derivative and other contracts:
Interest rate	4,481		166,392		517		—		171,390
Credit	—		7,876		425		—		8,301
Foreign exchange	49		115,766		183		—		115,998
Equity	2,778		40,171		406		—		43,355
Commodity and other	5,609		21,152		3,701		—		30,462
Netting1	(9,618)		(258,821)		(1,078)		(55,777)		(325,294)
Total derivative and other contracts	3,299		92,536		4,154		(55,777)		44,212
Investments4	652		685		923		—		2,260
Physical commodities	—		2,379		—		—		2,379
Total trading assets4	164,926		176,659		10,053		(55,777)		295,861
Investment securities—AFS	53,866		30,396		35		—		84,297
Securities purchased under agreements to resell	—		8		—		—		8
Total assets at fair value	$	218,792	$	207,063	$	10,088	$	(55,777)	$	380,166


	At December 31, 2022
$ in millions	Level 1		Level 2		Level 3		Netting1		Total
Liabilities at fair value
Deposits	$	—	$	4,776	$	20	$	—	$	4,796
Trading liabilities:
U.S. Treasury and agency securities	20,776		228		—		—		21,004
Other sovereign government obligations	23,235		2,688		3		—		25,926
Corporate and other debt	—		8,786		29		—		8,815
Corporate equities3	59,998		518		42		—		60,558
Derivative and other contracts:
Interest rate	3,446		161,044		668		—		165,158
Credit	—		7,987		315		—		8,302
Foreign exchange	89		113,383		117		—		113,589
Equity	3,266		46,923		1,142		—		51,331
Commodity and other	6,187		17,574		2,618		—		26,379
Netting1	(9,618)		(258,821)		(1,078)		(57,107)		(326,624)
Total derivative and other contracts	3,370		88,090		3,782		(57,107)		38,135
Total trading liabilities	107,379		100,310		3,856		(57,107)		154,438
Securities sold under agreements to repurchase	—		352		512		—		864
Other secured financings	—		4,459		91		—		4,550
Borrowings	—		77,133		1,587		—		78,720
Total liabilities at fair value	$	107,379	$	187,030	$	6,066	$	(57,107)	$	243,368

MABS—Mortgage- and asset-backed securities

1.For positions with the same counterparty that cross over the 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 that level. For further information on derivative instruments and hedging activities, see Note 6.

2.For a further breakdown by type, see the following Detail 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” herein.

Detail of Loans and Lending Commitments at Fair Value


$ in millions	$ in millions	At March 31, 2022		At December 31, 2021		$ in millions	At March 31, 2023		At December 31, 2022
Corporate		$	8	$	8

Secured lending facilities						Secured lending facilities	$	6	$	6
Commercial Real Estate	Commercial Real Estate	1,407		863		Commercial Real Estate	581		528
Residential Real Estate	Residential Real Estate	3,085		3,911		Residential Real Estate	1,954		2,020
Securities-based lending and Other loans	Securities-based lending and Other loans	7,990		7,845		Securities-based lending and Other loans	5,490		5,843
Total	Total	$	12,490	$	12,627	Total	$	8,031	$	8,397

Unsettled Fair Value of Futures Contracts1


$ in millions	$ in millions	At March 31, 2022		At December 31, 2021		$ in millions	At March 31, 2023		At December 31, 2022
Customer and other receivables (payables), net	Customer and other receivables (payables), net	$	377	$	948	Customer and other receivables (payables), net	$	788	$	1,219

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.

For a description of the valuation techniques applied to the Firm’s major categories of assets and liabilities measured at fair value on a recurring basis, see Note 5 to the financial statements in the ~~2021~~2022 Form 10-K. During the current quarter, there were no significant revisions made to the Firm’s valuation techniques.


			39			March 2023 Form 10-Q


Table of Contents
Notes to Consolidated Financial Statements (Unaudited)

Rollforward of Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis


		Three Months Ended March 31,						Three Months Ended March 31,
$ in millions	$ in millions		2022		2021		$ in millions		2023		2022
U.S. Treasury and agency securities	U.S. Treasury and agency securities		U.S. Treasury and agency securities
Beginning balance	Beginning balance		$	2	$	9	Beginning balance		$	17	$	2

Purchases	Purchases		1		12		Purchases		—		1
Sales	Sales		—		(9)		Sales		(9)		—

Net transfers	Net transfers		5		—		Net transfers		(7)		5
Ending balance	Ending balance		$	8	$	12	Ending balance		$	1	$	8
Unrealized gains (losses)	Unrealized gains (losses)		$	—	$	—	Unrealized gains (losses)		$	—	$	—
Other sovereign government obligations	Other sovereign government obligations		Other sovereign government obligations
Beginning balance	Beginning balance		$	211	$	268	Beginning balance		$	169	$	211

Realized and unrealized gains (losses)							Realized and unrealized gains (losses)		4		—
Purchases	Purchases		6		15		Purchases		78		6
Sales	Sales		(40)		(256)		Sales		(54)		(40)

Net transfers	Net transfers		11		(10)		Net transfers		(1)		11
Ending balance	Ending balance		$	188	$	17	Ending balance		$	196	$	188
Unrealized gains (losses)	Unrealized gains (losses)		$	—	$	—	Unrealized gains (losses)		$	4	$	—
State and municipal securities	State and municipal securities		State and municipal securities
Beginning balance	Beginning balance		$	13	$	—	Beginning balance		$	145	$	13

Sales							Sales		(40)		—

Net transfers	Net transfers		(13)		—		Net transfers		(102)		(13)
Ending balance	Ending balance		$	—	$	—	Ending balance		$	3	$	—
Unrealized gains (losses)	Unrealized gains (losses)		$	—	$	—	Unrealized gains (losses)		$	—	$	—
MABS	MABS		MABS
Beginning balance	Beginning balance		$	344	$	322	Beginning balance		$	416	$	344
Realized and unrealized gains (losses)	Realized and unrealized gains (losses)		(1)		51		Realized and unrealized gains (losses)		2		(1)
Purchases	Purchases		56		144		Purchases		57		56
Sales	Sales		(96)		(103)		Sales		(45)		(96)

Net transfers	Net transfers		48		(40)		Net transfers		24		48
Ending balance	Ending balance		$	351	$	374	Ending balance		$	454	$	351
Unrealized gains (losses)	Unrealized gains (losses)		$	(3)	$	(2)	Unrealized gains (losses)		$	1	$	(3)
Loans and lending commitments	Loans and lending commitments		Loans and lending commitments
Beginning balance	Beginning balance		$	3,806	$	5,759	Beginning balance		$	2,017	$	3,806
Realized and unrealized gains (losses)	Realized and unrealized gains (losses)		26		(26)		Realized and unrealized gains (losses)		(26)		26
Purchases and originations	Purchases and originations		369		1,833		Purchases and originations		535		369
Sales	Sales		(210)		(2,060)		Sales		(193)		(210)
Settlements	Settlements		(409)		(388)		Settlements		(235)		(409)
Net transfers	Net transfers		(441)		(73)		Net transfers		(41)		(441)
Ending balance	Ending balance		$	3,141	$	5,045	Ending balance		$	2,057	$	3,141
Unrealized gains (losses)	Unrealized gains (losses)		$	22	$	(32)	Unrealized gains (losses)		$	(25)	$	22
Corporate and other debt	Corporate and other debt		Corporate and other debt
Beginning balance	Beginning balance		$	1,973	$	3,435	Beginning balance		$	2,096	$	1,973
Realized and unrealized gains (losses)	Realized and unrealized gains (losses)		12		(51)		Realized and unrealized gains (losses)		34		12
Purchases and originations	Purchases and originations		71		867		Purchases and originations		508		71
Sales	Sales		(160)		(749)		Sales		(446)		(160)
Settlements			—		(255)

Net transfers	Net transfers		(143)		72		Net transfers		51		(143)
Ending balance	Ending balance		$	1,753	$	3,319	Ending balance		$	2,243	$	1,753
Unrealized gains (losses)	Unrealized gains (losses)		$	7	$	2	Unrealized gains (losses)		$	64	$	7
Corporate equities	Corporate equities		Corporate equities
Beginning balance	Beginning balance		$	115	$	86	Beginning balance		$	116	$	115
Realized and unrealized gains (losses)	Realized and unrealized gains (losses)		—		16		Realized and unrealized gains (losses)		(8)		—
Purchases	Purchases		24		25		Purchases		19		24
Sales	Sales		(82)		(46)		Sales		(25)		(82)

Net transfers	Net transfers		182		33		Net transfers		42		182
Ending balance	Ending balance		$	239	$	114	Ending balance		$	144	$	239
Unrealized gains (losses)	Unrealized gains (losses)		$	—	$	18	Unrealized gains (losses)		$	(2)	$	—


	Three Months Ended March 31,
$ in millions		2023		2022
Investments
Beginning balance		$	923	$	1,125
Realized and unrealized gains (losses)		14		(24)
Purchases		47		20
Sales		(24)		(4)

Net transfers		(5)		3
Ending balance		$	955	$	1,120
Unrealized gains (losses)		$	10	$	(26)
Investment securities—AFS
Beginning balance		$	35	$	—
Realized and unrealized gains (losses)		1		—



Net transfers		(36)		—
Ending balance		$	—	$	—
Unrealized gains (losses)		$	1	$	—









Net derivatives: Interest rate
Beginning balance		$	(151)	$	708
Realized and unrealized gains (losses)		(149)		39
Purchases		10		3
Issuances		(8)		(2)
Settlements		189		(21)
Net transfers		(108)		(93)
Ending balance		$	(217)	$	634
Unrealized gains (losses)		$	29	$	147
Net derivatives: Credit
Beginning balance		$	110	$	98
Realized and unrealized gains (losses)		(27)		43
Purchases		—		8
Issuances		—		(8)
Settlements		(31)		(68)
Net transfers		(4)		20
Ending balance		$	48	$	93
Unrealized gains (losses)		$	(28)	$	28
Net derivatives: Foreign exchange
Beginning balance		$	66	$	52
Realized and unrealized gains (losses)		(11)		(145)
Purchases		—		5
Issuances		(3)		—
Settlements		40		81
Net transfers		(26)		(26)
Ending balance		$	66	$	(33)
Unrealized gains (losses)		$	(10)	$	(138)
Net derivatives: Equity
Beginning balance		$	(736)	$	(945)
Realized and unrealized gains (losses)		16		98
Purchases		39		28
Issuances		(161)		(68)
Settlements		(30)		117
Net transfers		95		116
Ending balance		$	(777)	$	(654)
Unrealized gains (losses)		$	(30)	$	88


March ~~2022~~2023 Form 10-Q			3840


Table of Contents
Notes to Consolidated Financial Statements (Unaudited)

Three Months Ended
March 31,
$ in millions 2022 2021
Investments
Beginning balance $ 1,125 $ 828
Realized and unrealized gains (losses) (24) 6
Purchases 20 64
Sales (4) (15)
Net transfers 3 41
Ending balance $ 1,120 $ 924
Unrealized gains (losses) $ (26) $ (6)
Investment securities —AFS
Beginning balance $ — $ 2,804
Realized and unrealized gains (losses) — (4)
Sales — (192)
Net transfers1
— (2,481)
Ending balance $ — $ 127
Unrealized gains (losses) $ — $ (5)
Securities purchased under agreements to resell
Beginning balance $ — $ 3
Net transfers — (3)
Ending balance $ — $ —
Unrealized gains (losses) $ — $ —
Net derivatives: Interest rate
Beginning balance $ 708 $ 682
Realized and unrealized gains (losses) 39 (413)
Purchases 3 31
Issuances (2) (17)
Settlements (21) 83
Net transfers (93) 325
Ending balance $ 634 $ 691
Unrealized gains (losses) $ 147 $ (403)
Net derivatives: Credit
Beginning balance $ 98 $ 49
Realized and unrealized gains (losses) 43 (4)
Purchases 8 19
Issuances (8) (8)
Settlements (68) (72)
Net transfers 20 (66)
Ending balance $ 93 $ (82)
Unrealized gains (losses) $ 28 $ (13)
Net derivatives: Foreign exchange
Beginning balance $ 52 $ 61
Realized and unrealized gains (losses) (145) (236)
Purchases 5 2
Issuances — (4)
Settlements 81 26
Net transfers (26) 41
Ending balance $ (33) $ (110)
Unrealized gains (losses) $ (138) $ (206)
Net derivatives: Equity
Beginning balance $ (945) $ (2,231)
Realized and unrealized gains (losses) 98 63
Purchases 28 77
Issuances (68) (297)
Settlements 117 65
Net transfers 116 206
Ending balance $ (654) $ (2,117)
Unrealized gains (losses) $ 88 $ 12

Three Months Ended
March 31,
$ in millions 2022 2021
Net derivatives: Commodity and other
Beginning balance $ 1,529 $ 1,709
Realized and unrealized gains (losses) 4 331
Purchases 9 7
Issuances (11) (1)
Settlements (47) (131)
Net transfers (50) 29
Ending balance $ 1,434 $ 1,944
Unrealized gains (losses) $ (216) $ 215
Deposits
Beginning balance $ 67 $ 126
Realized and unrealized losses (gains) — (4)
Issuances — 11
Settlements (5) (2)
Net transfers (36) 46
Ending balance $ 26 $ 177
Unrealized losses (gains) $ — $ (4)
Nonderivative trading liabilities
Beginning balance $ 61 $ 79
Realized and unrealized losses (gains) (3) (9)
Purchases (33) (20)
Sales 11 13
Net transfers 12 (1)
Ending balance $ 48 $ 62
Unrealized losses (gains) $ (3) $ (9)
Securities sold under agreements to repurchase
Beginning balance $ 651 $ 444
Realized and unrealized losses (gains) 2 (2)
Settlements (10) —
Net transfers (127) (1)
Ending balance $ 516 $ 441
Unrealized losses (gains) $ 2 $ (2)
Other secured financings
Beginning balance $ 403 $ 516
Realized and unrealized losses (gains) (3) (5)
Issuances 28 370
Settlements (305) (322)
Net transfers (3) (4)
Ending balance $ 120 $ 555
Unrealized losses (gains) $ (3) $ (5)
Borrowings
Beginning balance $ 2,157 $ 4,374
Realized and unrealized losses (gains) (143) (118)
Issuances 161 231
Settlements (42) (316)
Net transfers 266 91
Ending balance $ 2,399 $ 4,262
Unrealized losses (gains) $ (143) $ (116)
Portion of Unrealized losses (gains) recorded in OCI—Change in net DVA (29) (29)

1.~~Net transfers in the prior year quarter reflect the transfer of $2.5 billion of AFS securities from Level 3 to Level 2 due to increased trading activity and observability of pricing inputs.~~


	Three Months Ended March 31,
$ in millions		2023		2022
Net derivatives: Commodity and other
Beginning balance		$	1,083	$	1,529
Realized and unrealized gains (losses)		446		4
Purchases		16		9
Issuances		(3)		(11)
Settlements		(103)		(47)
Net transfers		160		(50)
Ending balance		$	1,599	$	1,434
Unrealized gains (losses)		$	211	$	(216)
Deposits
Beginning balance		$	20	$	67


Issuances		6		—
Settlements		—		(5)
Net transfers		3		(36)
Ending balance		$	29	$	26
Unrealized losses (gains)		$	—	$	—
Nonderivative trading liabilities
Beginning balance		$	74	$	61
Realized and unrealized losses (gains)		(7)		(3)
Purchases		(44)		(33)
Sales		113		11

Net transfers		24		12
Ending balance		$	160	$	48
Unrealized losses (gains)		$	(5)	$	(3)
Securities sold under agreements to repurchase
Beginning balance		$	512	$	651
Realized and unrealized losses (gains)		11		2



Settlements		(9)		(10)
Net transfers		—		(127)
Ending balance		$	514	$	516
Unrealized losses (gains)		$	11	$	2
Other secured financings
Beginning balance		$	91	$	403
Realized and unrealized losses (gains)		2		(3)

Issuances		41		28
Settlements		(19)		(305)
Net transfers		—		(3)
Ending balance		$	115	$	120
Unrealized losses (gains)		$	2	$	(3)
Borrowings
Beginning balance		$	1,587	$	2,157
Realized and unrealized losses (gains)		48		(143)

Issuances		239		161
Settlements		(82)		(42)
Net transfers		(143)		266
Ending balance		$	1,649	$	2,399
Unrealized losses (gains)		$	45	$	(143)
Portion of Unrealized losses (gains) recorded in OCI—Change in net DVA		9		(29)

Level 3 instruments may be hedged with instruments classified in Level 1 and Level 2. The realized and unrealized gains or losses for assets and liabilities within the Level 3 category presented in the previous tables do not reflect the related realized and unrealized gains or losses on hedging


			39			~~March 2022 Form 10-Q~~


~~Table of Contents~~
Notes to Consolidated Financial Statements (Unaudited)

instruments that have been classified by the Firm within the Level 1 and/or Level 2 categories.

The unrealized gains (losses) during the period for assets and liabilities within the Level 3 category may include changes in fair value during the period that were attributable to both observable and unobservable inputs. Total realized and unrealized gains (losses) are primarily included in Trading revenues in the income statement.

Additionally, in the previous tables, consolidations of VIEs are included in Purchases, and deconsolidations of VIEs are included in Settlements.

Significant Unobservable Inputs Used in Recurring and Nonrecurring Level 3 Fair Value Measurements

Valuation Techniques and Unobservable Inputs

Balance / Range (Average1)
$ in millions, except inputs At March 31, 2022 At December 31, 2021
Assets at Fair Value on a Recurring Basis
Other sovereign government obligations $ 188 $ 211
Comparable pricing:
Bond price 91 to 108 points (100 points) 100 to 140 points (120 points)
MABS $ 351 $ 344
Comparable pricing:
Bond price 0 to 83 points (58 points) 0 to 86 points (59 points)
Loans and lending
commitments $ 3,141 $ 3,806
Margin loan model:
Margin loan rate 1% to 4% (3%) 1% to 4% (3%)
Comparable pricing:
Loan price 88 to 102 points (97 points) 89 to 101 points (97 points)
Corporate and
other debt $ 1,753 $ 1,973
Comparable pricing:
Bond price 50 to 165 points (98 points) 50 to 163 points (99 points)
Discounted cash flow:
Loss given default 54% to 84% (62% / 54%) 54% to 84% (62% / 54%)
Corporate equities $ 239 $ 115
Comparable pricing:
Equity price 100% 100%
Investments $ 1,120 $ 1,125
Discounted cash flow:
WACC 13% to 16% (15%) 10% to 16% (15%)
Exit multiple 8 to 17 times (12 times) 8 to 17 times (12 times)
Market approach:
EBITDA multiple 8 to 23 times (9 times) 8 to 25 times (10 times)
Comparable pricing:
Equity price 43% to 100% (99%) 43% to 100% (99%)

Balance / Range (Average1)
$ in millions, except inputs At March 31, 2022 At December 31, 2021
Net derivative and other contracts:
Interest rate $ 634 $ 708
Option model:
IR volatility skew 45% to 79% (61% / 63%) 39% to 79% (64% / 63%)
IR curve correlation 46% to 93% (73% / 76%) 62% to 98% (83% / 84%)
Bond volatility 8% to 26% (15% / 14%) 5% to 32% (12% / 9%)
Inflation volatility 24% to 65% (44% / 40%) 24% to 65% (44% / 40%)
IR curve N/M 4%
Credit $ 93 $ 98
Credit default swap model:
Cash-synthetic basis 7 points 7 points
Bond price N/M 0 to 83 points (46 points)
Credit spread 10 to 481 bps (95 bps) 14 to 477 bps (68 bps)
Funding spread 15 to 590 bps (77 bps) 15 to 433 bps (55 bps)
Foreign exchange2
$ (33) $ 52
Option model:
IR - FX correlation 54% to 56% (55% 55%) 53% to 56% (55% / 54%)
IR volatility skew 45% to 79% (61% / 63%) 39% to 79% (64% / 63%)
IR curve 2% to 7% (5% / 7%) -1% to 7% (2% / 0%)
Foreign exchange volatility skew -37% to 25% (0% / 1%) -4% to -2% (-3% / -3%)
Contingency probability 80% to 95% (93% / 95%) 90% to 95% (94% / 95%)
Equity2
$ (654) $ (945)
Option model:
Equity volatility 7% to 96% (24%) 5% to 99% (24%)
Equity volatility skew -6% to 0% (-1%) -4% to 0% (-1%)
Equity correlation 5% to 97% (75%) 5% to 99% (73%)
FX correlation -85% to 60% (-47%) -85% to 37% (-42%)
IR correlation 12% to 30% (14%) 13% to 30% (15%)
Commodity and other $ 1,434 $ 1,529
Option model:
Forward power price $7 to $260 ($48) per MWh $4 to $263 ($39) per MWh
Commodity volatility 8% to 196% (32%) 8% to 385% (22%)
Cross-commodity correlation 41% to 100% (94%) 43% to 100% (94%)
Liabilities Measured at Fair Value on a Recurring Basis
Deposits $ 26 $ 67
Option model:
Equity volatility N/M 7%
Securities sold under agreements to repurchase $ 516 $ 651
Discounted cash flow:
Funding spread 84 to 131 bps (108 bps) 112 to 127 bps (120 bps)
Other secured financings $ 120 $ 403
Comparable pricing:
Loan price 23 to 100 points (80 points) 30 to 100 points (83 points)


	Balance / Range (Average1)
$ in millions, except inputs	At March 31, 2023		At December 31, 2022
Assets at Fair Value on a Recurring Basis



Other sovereign government obligations	$	196	$	169
Comparable pricing:
Bond price	61 to 119 points (92 points)		57 to 124 points (89 points)
State and municipal securities	$	3	$	145
Comparable pricing:
Bond price	N/M		86 to 100 points (97 points)
MABS	$	454	$	416
Comparable pricing:
Bond price	0 to 95 points (60 points)		0 to 95 points (68 points)
Loans and lending commitments	$	2,057	$	2,017
Margin loan model:



Margin loan rate	2% to 4% (3%)		2% to 4% (3%)
Comparable pricing:
Loan price	88 to 104 points (99 points)		87 to 105 points (99 points)
Corporate and other debt	$	2,243	$	2,096
Comparable pricing:
Bond price	51 to 129 points (88 points)		51 to 132 points (90 points)
Discounted cash flow:
Loss given default	54% to 84% (62% / 54%)		54% to 84% (62% / 54%)



Corporate equities	$	144	$	116
Comparable pricing:
Equity price	100%		100%
Investments	$	955	$	923
Discounted cash flow:
WACC	15% to 17% (16%)		15% to 17% (16%)
Exit multiple	7 to 17 times (14 times)		7 to 17 times (14 times)
Market approach:
EBITDA multiple	6 to 21 times (11 times)		7 to 21 times (11 times)
Comparable pricing:
Equity price	24% to 100% (89%)		24% to 100% (89%)

March ~~2022~~2023 Form 10-Q


Table of Contents
Notes to Consolidated Financial Statements (Unaudited)

Balance / Range (Average1)

$ in millions, except inputs

At March 31, 2022

At December 31, 2021

$ in millions, except inputs

At March 31, 2023

At December 31, 2022

Borrowings

2,399

2,157

Net derivative and other contracts:

Interest rate

(217)

(151)

Option model:

IR volatility skew

36% to 138% (90% / 84%)

105% to 130% (113% / 109%)

IR curve correlation

53% to 99% (83% / 86%)

47% to 100% (80% / 84%)

Bond volatility

1% to 2% (1% / 1%)

N/M

Inflation volatility

22% to 70% (43% / 39%)

22% to 65% (43% / 38%)

IR curve

4% to 11% (6% / 5%)

4% to 5% (5% / 5%)

Credit

110

Credit default swap model:

Cash-synthetic basis

7 points

Bond price

0 to 92 bps (49 points)

0 to 83 points (43 points)

Credit spread

10 to 449 bps (111 bps)

10 to 528 bps (115 bps)

Funding spread

18 to 590 bps (81 bps)

18 to 590 bps (93 bps)

Foreign exchange2

Option model:

IR curve

-8% to 18% (5% / 4%)

-2% to 38% (8% / 4%)

Foreign exchange volatility skew

-18% to 30% (2% / 0%)

10% to 10% (10% / 10%)

Contingency probability

95% to 95% (95% / 95%)

Equity2

(777)

(736)

Option model:

Equity volatility

7% to 93% (24%)

7% to 85% (20%)

Equity volatility

6% to 95% (22%)

5% to 96% (25%)

Equity volatility skew

-1% to 0% (0%)

Equity volatility skew

-5% to 0% (-1%)

-4% to 0% (-1%)

Equity correlation

39% to 95% (85%)

41% to 95% (81%)

Equity correlation

17% to 95% (83%)

10% to 93% (71%)

Equity - FX correlation

-55% to 25% (-27%)

-55% to 25% (-30%)

IR FX Correlation

-27% to 12% (-6% / -6%)

-26% to 8% (-5% / -5%)

IR curve correlation

46% to 93% (73% / 76%)

N/M

IR volatility skew

34% to 82% (51% / 45%)

N/M

FX correlation

-79% to 65% (-25%)

-79% to 65% (-26%)

IR correlation

10% to 30% (13%)

10% to 30% (-14%)

Commodity and other

1,599

1,083

Option model:

Forward power price

$0 to $282 ($45) per MWh

$1 to $292 ($43) per MWh

Commodity volatility

8% to 113% (35%)

12% to 169% (34%)

Cross-commodity correlation

54% to 100% (93%)

70% to 100% (94%)

Liabilities Measured at Fair Value on a Recurring Basis

Securities sold under agreements to repurchase

514

512

Discounted cash flow:

Loss given default

54% to 84% (62% / 54%)

Nonrecurring Fair Value Measurement

Loans

1,370

1,576

Corporate loan model:

Credit spread

79 to 447 bps (266 bps)

108 to 565 bps (284 bps)

Funding spread

80 to 157 bps (118 bps)

96 to 165 bps (131 bps)

Other secured financings

115

Comparable pricing:

Loan price

47 to 80 points (63 points)

40 to 80 points (61 points)

Loan price

23 to 101 points (82 points)

23 to 101 points (75 points)

Warehouse model:

Credit spread

187 to 280 bps (226 bps)

182 to 446 bps (376 bps)


	Balance / Range (Average1)
$ in millions, except inputs	At March 31, 2023		At December 31, 2022
Borrowings	$	1,649	$	1,587
Option model:
Equity volatility	6% to 66% (22%)		7% to 86% (23%)
Equity volatility skew	-1% to 0% (0%)		-2% to 0% (0%)
Equity correlation	41% to 95% (80%)		39% to 98% (86%)
Equity - FX correlation	-55% to 6% (-26%)		-50% to 0% (-21%)

IR curve correlation	49% to 98% (85% / 90%)		N/M
IR volatility skew	N/M		47% to 136% (74% / 59%)
Discounted cash flow:
Loss given default	54% to 84% (62% / 54%)		54% to 84% (62% / 54%)
Nonrecurring Fair Value Measurement
Loans	$	5,812	$	6,610
Corporate loan model:
Credit spread	105 to 1286 bps (830 bps)		91 to 1276 bps (776 bps)
Comparable pricing:
Loan price	17 to 97 points (66 points)		36 to 80 points (65 points)
Warehouse model:
Credit spread	108 to 311 bps (246 bps)		110 to 319 bps (245 bps)

Points—Percentage of par

IR—Interest rate

FX—Foreign exchange

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).

The previous table provides information on the valuation techniques, significant unobservable inputs, and the ranges and averages for each major category of assets and liabilities measured at fair value on a recurring and nonrecurring basis with a significant Level 3 balance. The level of aggregation and breadth of products cause the range of inputs to be wide and not evenly distributed across the inventory of financial instruments. Further, the range of unobservable inputs may differ across firms in the financial services industry because of diversity in the types of products included in each firm’s inventory. Generally, there are no predictable relationships between multiple significant unobservable inputs attributable to a given valuation technique.

For a description of the Firm’s significant unobservable inputs and qualitative information about the effect of hypothetical changes in the values of those inputs, see Note 5 to the financial statements in the ~~2021~~2022 Form 10-K. During the current quarter, there were no significant revisions made to the descriptions of the Firm’s significant unobservable inputs.


March 2023 Form 10-Q			42


Table of Contents
Notes to Consolidated Financial Statements (Unaudited)

Net Asset Value Measurements

Fund Interests


		At March 31, 2022				At December 31, 2021					At March 31, 2023				At December 31, 2022
$ in millions	$ in millions	Carrying Value		Commitment		Carrying Value		Commitment		$ in millions	Carrying Value		Commitment		Carrying Value		Commitment
Private equity	Private equity	$	2,607	$	579	$	2,492	$	615	Private equity	$	2,664	$	637	$	2,622	$	638
Real estate	Real estate	2,089		243		2,064		248		Real estate	2,566		256		2,642		239
Hedge1	Hedge1	195		2		191		2		Hedge1	194		3		190		3
Total	Total	$	4,891	$	824	$	4,747	$	865	Total	$	5,424	$	896	$	5,454	$	880

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.

Amounts in the previous table represent the Firm’s carrying value of general and limited partnership interests in fund investments, as well as any related performance-based income in the form of carried interest. The carrying amounts are measured based on the NAV of the fund taking into account the distribution terms applicable to the interest held. This same measurement applies whether the fund investments are accounted for under the equity method or fair value.

For a description of the Firm’s investments in private equity funds, real estate funds and hedge funds, which are measured based on NAV, see Note 5 to the financial statements in the ~~2021~~2022 Form 10-K.

See Note 13 for information regarding general partner guarantees, which include potential obligations to return performance fee distributions previously received. See Note 19 for information regarding unrealized carried interest at risk of reversal.

Nonredeemable Funds by Contractual Maturity


		Carrying Value at March 31, 2022					Carrying Value at March 31, 2023
$ in millions	$ in millions	Private Equity		Real Estate		$ in millions	Private Equity		Real Estate
Less than 5 years	Less than 5 years	$	1,041	$	327	Less than 5 years	$	1,085	$	975
5-10 years	5-10 years	1,109		1,745		5-10 years	1,515		1,554
Over 10 years	Over 10 years	457		17		Over 10 years	64		37
Total	Total	$	2,607	$	2,089	Total	$	2,664	$	2,566

Nonrecurring Fair Value Measurements

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis


		At March 31, 2022							At March 31, 2023
		Fair Value							Fair Value
$ in millions	$ in millions	Level 2		Level 31		Total		$ in millions	Level 2		Level 31		Total
Assets	Assets							Assets
Loans	Loans	$	1,531	$	1,370	$	2,901	Loans	$	5,083	$	5,812	$	10,895

Other assets—Other investments	Other assets—Other investments	—		7		7		Other assets—Other investments	—		—		—

Other assets—ROU assets	Other assets—ROU assets	4		—		4		Other assets—ROU assets	—		—		—
Total	Total	$	1,535	$	1,377	$	2,912	Total	$	5,083	$	5,812	$	10,895
Liabilities	Liabilities							Liabilities
Other liabilities and accrued expenses—Lending commitments	Other liabilities and accrued expenses—Lending commitments	$	201	$	86	$	287	Other liabilities and accrued expenses—Lending commitments	$	195	$	97	$	292
Total	Total	$	201	$	86	$	287	Total	$	195	$	97	$	292


			41			~~March 2022 Form 10-Q~~


~~Table of Contents~~
Notes to Consolidated Financial Statements (Unaudited)


		At December 31, 2021							At December 31, 2022
		Fair Value							Fair Value
$ in millions	$ in millions	Level 2		Level 31		Total		$ in millions	Level 2		Level 31		Total
Assets	Assets							Assets
Loans	Loans	$	4,035	$	1,576	$	5,611	Loans	$	4,193	$	6,610	$	10,803
Other assets—Other investments	Other assets—Other investments	—		8		8		Other assets—Other investments	—		7		7
Other assets—ROU assets	Other assets—ROU assets	$	16	$	—	$	16	Other assets—ROU assets	4		—		4
Total	Total	$	4,051	$	1,584	$	5,635	Total	$	4,197	$	6,617	$	10,814
Liabilities	Liabilities							Liabilities
Other liabilities and accrued expenses—Lending commitments	Other liabilities and accrued expenses—Lending commitments	$	173	$	70	$	243	Other liabilities and accrued expenses—Lending commitments	$	275	$	153	$	428
Total	Total	$	173	$	70	$	243	Total	$	275	$	153	$	428

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.

Gains (Losses) from Nonrecurring Fair Value Remeasurements1


		Three Months Ended March 31,					Three Months Ended March 31,
$ in millions	$ in millions		2022		2021			$ in millions	2023		2022
Assets	Assets							Assets
Loans2	Loans2		$	(43)	$	(13)		Loans2	$	19	$	(43)
Goodwill			—		(8)
Intangibles			—		(2)

Other assets—Other investments3	Other assets—Other investments3		(2)		(51)			Other assets—Other investments3	—		(2)
Other assets—Premises, equipment and software			(1)		(2)
Other assets—ROU assets			(2)		—
Other assets—Premises, equipment and software4								Other assets—Premises, equipment and software4	(3)		(1)
Other assets—ROU assets5								Other assets—ROU assets5	—		(2)
Total	Total		$	(48)	$	(76)		Total	$	16	$	(48)
Liabilities	Liabilities							Liabilities
Other liabilities and accrued expenses—Lending commitments2	Other liabilities and accrued expenses—Lending commitments2		$	(49)	$	4		Other liabilities and accrued expenses—Lending commitments2	$	34	$	(49)
Total	Total		$	(49)	$	4		Total	$	34	$	(49)

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, which exclude the impact of related economic hedges, are 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.

3.Losses related to Other assets—Other investments were determined using techniques that included discounted cash flow models, methodologies that incorporate multiples of certain comparable companies and recently executed transactions.

4.Losses related to Other assets—Premises, equipment and software generally include impairments as well as write-offs related to the disposal of certain assets.

5.Losses related to Other Assets—ROU assets include impairments related to the discontinued leased properties.


			43			March 2023 Form 10-Q


Table of Contents
Notes to Consolidated Financial Statements (Unaudited)

Financial Instruments Not Measured at Fair Value


		At March 31, 2022											At March 31, 2023
		Carrying Value		Fair Value									Carrying Value		Fair Value
$ in millions	$ in millions			Level 1		Level 2		Level 3		Total		$ in millions			Level 1		Level 2		Level 3		Total
Financial assets	Financial assets											Financial assets
Cash and cash equivalents	Cash and cash equivalents	$	136,086	$	136,086	$	—	$	—	$	136,086	Cash and cash equivalents	$	111,258	$	111,258	$	—	$	—	$	111,258
Investment securities—HTM	Investment securities—HTM	80,439		29,099		45,633		1,044		75,776		Investment securities—HTM	74,012		26,253		37,090		1,076		64,419
Securities purchased under agreements to resell	Securities purchased under agreements to resell	127,765		—		125,543		2,186		127,729		Securities purchased under agreements to resell	121,877		—		119,067		2,826		121,893
Securities borrowed	Securities borrowed	150,995		—		150,995		—		150,995		Securities borrowed	146,216		—		146,216		—		146,216
Customer and other receivables	Customer and other receivables	90,134		—		86,417		3,453		89,870		Customer and other receivables	69,249		—		65,219		3,750		68,969
Loans1	Loans1	196,260		—		24,140		170,269		194,409		Loans1	214,696		—		24,842		183,035		207,877
Other assets	Other assets	509		—		509		—		509		Other assets	3,139		—		3,139		—		3,139
Financial liabilities	Financial liabilities											Financial liabilities
Deposits	Deposits	$	358,827	$	—	$	358,993	$	—	$	358,993	Deposits	$	342,481	$	—	$	342,312	$	—	$	342,312
Securities sold under agreements to repurchase	Securities sold under agreements to repurchase	59,104		—		59,089		—		59,089		Securities sold under agreements to repurchase	59,619		—		59,599		—		59,599
Securities loaned	Securities loaned	14,222		—		14,223		—		14,223		Securities loaned	15,588		—		15,583		—		15,583
Other secured financings	Other secured financings	4,057��		—		4,059		—		4,059		Other secured financings	3,665		—		3,665		—		3,665
Customer and other payables	Customer and other payables	243,281		—		243,281		—		243,281		Customer and other payables	220,556		—		220,556		—		220,556
Borrowings	Borrowings	153,854		—		155,443		4		155,447		Borrowings	163,760		—		163,329		4		163,333
		Commitment Amount											Commitment Amount
Lending commitments2	Lending commitments2	$	141,421	$	—	$	1,162	$	514	$	1,676	Lending commitments2	$	139,447	$	—	$	1,814	$	914	$	2,728


		At December 31, 2021											At December 31, 2022
		Carrying Value		Fair Value									Carrying Value		Fair Value
$ in millions	$ in millions			Level 1		Level 2		Level 3		Total		$ in millions			Level 1		Level 2		Level 3		Total
Financial assets	Financial assets											Financial assets
Cash and cash equivalents	Cash and cash equivalents	$	127,725	$	127,725	$	—	$	—	$	127,725	Cash and cash equivalents	$	128,127	$	128,127	$	—	$	—	$	128,127
Investment securities—HTM	Investment securities—HTM	80,168		29,454		49,352		1,076		79,882		Investment securities—HTM	75,634		26,754		37,218		1,034		65,006
Securities purchased under agreements to resell	Securities purchased under agreements to resell	119,992		—		117,922		2,075		119,997		Securities purchased under agreements to resell	113,899		—		111,188		2,681		113,869
Securities borrowed	Securities borrowed	129,713		—		129,713		—		129,713		Securities borrowed	133,374		—		133,370		—		133,370
Customer and other receivables	Customer and other receivables	91,664		—		88,091		3,442		91,533		Customer and other receivables	73,248		—		69,268		3,664		72,932
Loans1	Loans1	188,134		—		25,706		163,784		189,490		Loans1	213,785		—		24,153		181,561		205,714
Other assets	Other assets	528		—		528		—		528		Other assets	704		—		704		—		704
Financial liabilities	Financial liabilities											Financial liabilities
Deposits	Deposits	$	345,634	$	—	$	345,911	$	—	$	345,911	Deposits	$	351,850	$	—	$	351,721	$	—	$	351,721
Securities sold under agreements to repurchase	Securities sold under agreements to repurchase	61,397		—		61,419		—		61,419		Securities sold under agreements to repurchase	61,670		—		61,620		—		61,620
Securities loaned	Securities loaned	12,299		—		12,296		—		12,296		Securities loaned	15,679		—		15,673		—		15,673
Other secured financings	Other secured financings	4,908		—		4,910		—		4,910		Other secured financings	3,608		—		3,608		—		3,608
Customer and other payables	Customer and other payables	228,631		—		228,631		—		228,631		Customer and other payables	216,018		—		216,018		—		216,018
Borrowings	Borrowings	156,787		—		162,154		4		162,158		Borrowings	159,338		—		157,780		4		157,784
		Commitment Amount											Commitment Amount
Lending commitments2	Lending commitments2	$	133,519	$	—	$	890	$	470	$	1,360	Lending commitments2	$	136,241	$	—	$	1,789	$	1,077	$	2,866

1.Amounts include loans measured at fair value on a nonrecurring basis.

2.Represents Lending commitments accounted for as Held for Investment and Held for Sale. For a further discussion on lending commitments, see Note 13.


~~March 2022 Form 10-Q~~			42


~~Table of Contents~~
Notes to Consolidated Financial Statements (Unaudited)

The previous tables exclude all non-financial assets and liabilities, such as Goodwill and Intangible assets, and certain financial instruments, such as equity method investments and certain receivables.

5. Fair Value Option

The Firm has elected the fair value option for certain eligible instruments that are risk managed on a fair value basis to mitigate income statement volatility caused by measurement basis differences between the elected instruments and their associated risk management transactions or to eliminate complexities of applying certain accounting models.

Borrowings Measured at Fair Value on a Recurring Basis


$ in millions	$ in millions	At March 31, 2022		At December 31, 2021		$ in millions	At March 31, 2023		At December 31, 2022
Business Unit Responsible for Risk Management	Business Unit Responsible for Risk Management					Business Unit Responsible for Risk Management
Equity	Equity	$	37,987	$	37,046	Equity	$	43,705	$	38,945
Interest rates	Interest rates	27,100		28,638		Interest rates	27,791		26,077
Commodities	Commodities	8,401		7,837		Commodities	11,187		10,717
Credit	Credit	1,310		1,347		Credit	1,954		1,564
Foreign exchange	Foreign exchange	1,165		1,472		Foreign exchange	1,785		1,417
Total	Total	$	75,963	$	76,340	Total	$	86,422	$	78,720

Net Revenues from Borrowings under the Fair Value Option


		Three Months Ended March 31,						Three Months Ended March 31,
$ in millions	$ in millions		2022		2021		$ in millions		2023		2022
Trading revenues	Trading revenues		$	4,655	$	2,485	Trading revenues		$	(4,378)	$	4,655
Interest expense	Interest expense		72		73		Interest expense		108		72
Net revenues1	Net revenues1		$	4,583	$	2,412	Net revenues1		$	(4,486)	$	4,583

1.Amounts do not reflect any gains or losses from related economic hedges.

Gains (losses) from changes in fair value are recorded in Trading revenues and are mainly attributable to movements in the reference price or index, interest rates or foreign exchange rates.

Gains (Losses) Due to Changes in Instrument-Specific Credit Risk

Three Months Ended March 31,
2022 2021
$ in millions Trading
Revenues OCI Trading
Revenues OCI
Loans and other receivables1
$ 24 $ — $ 158 $ —
Deposits — (7) — (1)
Borrowings — 878 (17) 185


	Three Months Ended March 31,
	2023				2022
$ in millions	Trading Revenues		OCI		Trading Revenues		OCI
Loans and other receivables1	$	(43)	$	—	$	24	$	—
Lending commitments	11		—		—		—
Deposits	—		93		—		(7)
Borrowings	(6)		(117)		—		878


$ in millions	$ in millions	At March 31, 2022		At December 31, 2021		$ in millions	At March 31, 2023		At December 31, 2022
Cumulative pre-tax DVA gain (loss) recognized in AOCI	Cumulative pre-tax DVA gain (loss) recognized in AOCI	$	(1,568)	$	(2,439)	Cumulative pre-tax DVA gain (loss) recognized in AOCI	$	(481)	$	(457)

1.Loans and other receivables-specific credit gains (losses) were determined by excluding the non-credit components of gains and losses.


March 2023 Form 10-Q			44


Table of Contents
Notes to Consolidated Financial Statements (Unaudited)

Difference Between Contractual Principal and Fair Value1


$ in millions	$ in millions	At March 31, 2022		At December 31, 2021		$ in millions	At March 31, 2023		At December 31, 2022
Loans and other receivables2	Loans and other receivables2	$	12,360	$	12,633	Loans and other receivables2	$	11,794	$	11,916
Nonaccrual loans2	Nonaccrual loans2	9,608		9,999		Nonaccrual loans2	9,071		9,128
Borrowings3	Borrowings3	704		(2,106)		Borrowings3	4,282		5,203

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 receivables relates to distressed debt positions purchased at amounts well below par.

3.Excludes borrowings where the repayment of the initial principal amount fluctuates based on changes in a reference price or index.

The previous tables exclude non-recourse debt from consolidated VIEs, liabilities related to transfers of financial assets treated as collateralized financings, pledged commodities and other liabilities that have specified assets attributable to them.

Fair Value Loans on Nonaccrual Status


$ in millions	$ in millions	At March 31, 2022		At December 31, 2021		$ in millions	At March 31, 2023		At December 31, 2022
Nonaccrual loans	Nonaccrual loans	$	908	$	989	Nonaccrual loans	$	504	$	585
Nonaccrual loans 90 or more days past due	Nonaccrual loans 90 or more days past due	264		363		Nonaccrual loans 90 or more days past due	55		116

6. Derivative Instruments and Hedging Activities

Fair Values of Derivative Contracts


		Assets at March 31, 2022									Assets at March 31, 2023
$ in millions	$ in millions	Bilateral OTC		Cleared OTC		Exchange- Traded		Total		$ in millions	Bilateral OTC		Cleared OTC		Exchange-Traded		Total
Designated as accounting hedges	Designated as accounting hedges									Designated as accounting hedges
Interest rate	Interest rate	$	235	$	3	$	—	$	238	Interest rate	$	14	$	4	$	—	$	18
Foreign exchange	Foreign exchange	202		14		—		216		Foreign exchange	44		28		—		72
Total	Total	437		17		—		454		Total	58		32		—		90
Not designated as accounting hedges	Not designated as accounting hedges									Not designated as accounting hedges
Economic hedges of loans	Economic hedges of loans									Economic hedges of loans
Credit	Credit	2		12		—		14		Credit	1		58		—		59
Other derivatives	Other derivatives									Other derivatives
Interest rate	Interest rate	152,234		20,630		1,525		174,389		Interest rate	130,291		27,241		1,574		159,106
Credit	Credit	7,494		3,998		—		11,492		Credit	6,952		2,782		—		9,734
Foreign exchange	Foreign exchange	97,624		3,389		66		101,079		Foreign exchange	81,249		2,222		72		83,543
Equity	Equity	27,669		—		38,240		65,909		Equity	18,623		—		30,532		49,155
Commodity and other	Commodity and other	34,517		—		14,789		49,306		Commodity and other	17,338		—		4,692		22,030
Total	Total	319,540		28,029		54,620		402,189		Total	254,454		32,303		36,870		323,627
Total gross derivatives	Total gross derivatives	$	319,977	$	28,046	$	54,620	$	402,643	Total gross derivatives	$	254,512	$	32,335	$	36,870	$	323,717
Amounts offset	Amounts offset									Amounts offset
Counterparty netting	Counterparty netting	(222,597)		(25,328)		(50,605)		(298,530)		Counterparty netting	(181,978)		(29,554)		(33,832)		(245,364)
Cash collateral netting	Cash collateral netting	(44,621)		(1,611)		—		(46,232)		Cash collateral netting	(35,948)		(1,982)		—		(37,930)
Total in Trading assets	Total in Trading assets	$	52,759	$	1,107	$	4,015	$	57,881	Total in Trading assets	$	36,586	$	799	$	3,038	$	40,423
Amounts not offset1	Amounts not offset1									Amounts not offset1
Financial instruments collateral	Financial instruments collateral	(18,000)		—		—		(18,000)		Financial instruments collateral	(18,059)		—		—		(18,059)
Net amounts	Net amounts	$	34,759	$	1,107	$	4,015	$	39,881	Net amounts	$	18,527	$	799	$	3,038	$	22,364
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							$	10,704	Net amounts for which master netting or collateral agreements are not in place or may not be legally enforceable							$	3,076


	Liabilities at March 31, 2023
$ in millions	Bilateral OTC		Cleared OTC		Exchange-Traded		Total
Designated as accounting hedges
Interest rate	$	363	$	—	$	—	$	363
Foreign exchange	126		65		—		191
Total	489		65		—		554
Not designated as accounting hedges
Economic hedges of loans
Credit	10		489		—		499
Other derivatives
Interest rate	124,206		25,480		1,010		150,696
Credit	6,659		2,853		—		9,512
Foreign exchange	79,661		2,229		69		81,959
Equity	26,072		—		29,659		55,731
Commodity and other	14,096		—		5,162		19,258
Total	250,704		31,051		35,900		317,655
Total gross derivatives	$	251,193	$	31,116	$	35,900	$	318,209
Amounts offset
Counterparty netting	(181,978)		(29,554)		(33,832)		(245,364)
Cash collateral netting	(42,260)		(1,556)		—		(43,816)
Total in Trading liabilities	$	26,955	$	6	$	2,068	$	29,029
Amounts not offset1
Financial instruments collateral	(2,008)		—		(202)		(2,210)
Net amounts	$	24,947	$	6	$	1,866	$	26,819
Net amounts for which master netting or collateral agreements are not in place or may not be legally enforceable							5,497


	Assets at December 31, 2022
$ in millions	Bilateral OTC		Cleared OTC		Exchange-Traded		Total
Designated as accounting hedges
Interest rate	$	62	$	1	$	—	$	63
Foreign exchange	15		44		—		59
Total	77		45		—		122
Not designated as accounting hedges
Economic hedges of loans
Credit	2		59		—		61
Other derivatives
Interest rate	141,291		29,007		1,029		171,327
Credit	5,888		2,352		—		8,240
Foreign exchange	113,540		2,337		62		115,939
Equity	16,505		—		26,850		43,355
Commodity and other	24,298		—		6,164		30,462
Total	301,524		33,755		34,105		369,384
Total gross derivatives	$	301,601	$	33,800	$	34,105	$	369,506
Amounts offset
Counterparty netting	(214,773)		(32,250)		(32,212)		(279,235)
Cash collateral netting	(44,711)		(1,348)		—		(46,059)
Total in Trading assets	$	42,117	$	202	$	1,893	$	44,212
Amounts not offset1
Financial instruments collateral	(19,406)		—		—		(19,406)
Net amounts	$	22,711	$	202	$	1,893	$	24,806
Net amounts for which master netting or collateral agreements are not in place or may not be legally enforceable							$	4,318


			4345			March ~~2022~~2023 Form 10-Q


Table of Contents
Notes to Consolidated Financial Statements (Unaudited)

Liabilities at March 31, 2022
$ in millions
Bilateral
OTC
Cleared
OTC
Exchange-
Traded
Total
Designated as accounting hedges
Interest rate $ 51 $ — $ — $ 51
Foreign exchange 59 36 — 95
Total 110 36 — 146
Not designated as accounting hedges
Economic hedges of loans
Credit 15 308 — 323
Other derivatives
Interest rate 142,935 21,368 988 165,291
Credit 7,029 4,150 — 11,179
Foreign exchange 90,134 2,970 96 93,200
Equity 34,116 — 39,782 73,898
Commodity and other 27,290 — 15,548 42,838
Total 301,519 28,796 56,414 386,729
Total gross derivatives $ 301,629 $ 28,832 $ 56,414 $ 386,875
Amounts offset
Counterparty netting (222,597) (25,328) (50,605) (298,530)
Cash collateral netting (44,557) (1,431) — (45,988)
Total in Trading liabilities $ 34,475 $ 2,073 $ 5,809 $ 42,357
Amounts not offset1
Financial instruments collateral (3,641) — (1,543) (5,184)
Net amounts $ 30,834 $ 2,073 $ 4,266 $ 37,173
Net amounts for which master netting or collateral agreements are not in place or may not be legally enforceable 8,824

Assets at December 31, 2021
$ in millions
Bilateral
OTC
Cleared
OTC
Exchange-
Traded
Total
Designated as accounting hedges
Interest rate $ 594 $ 1 $ — $ 595
Foreign exchange 191 6 — 197
Total 785 7 — 792
Not designated as accounting hedges
Economic hedges of loans
Credit — 15 — 15
Other derivatives
Interest rate 147,585 7,002 383 154,970
Credit 5,749 3,186 — 8,935
Foreign exchange 73,276 1,219 39 74,534
Equity 28,877 — 41,455 70,332
Commodity and other 22,175 — 5,538 27,713
Total 277,662 11,422 47,415 336,499
Total gross derivatives $ 278,447 $ 11,429 $ 47,415 $ 337,291
Amounts offset
Counterparty netting (201,729) (9,818) (42,883) (254,430)
Cash collateral netting (43,495) (1,212) — (44,707)
Total in Trading assets $ 33,223 $ 399 $ 4,532 $ 38,154
Amounts not offset1
Financial instruments collateral (10,457) — — (10,457)
Net amounts $ 22,766 $ 399 $ 4,532 $ 27,697
Net amounts for which master netting or collateral agreements are not in place or may not be legally enforceable $ 6,725


		Liabilities at December 31, 2021									Liabilities at December 31, 2022
$ in millions	$ in millions	Bilateral OTC		Cleared OTC		Exchange- Traded		Total		$ in millions	Bilateral OTC		Cleared OTC		Exchange-Traded		Total
Designated as accounting hedges	Designated as accounting hedges									Designated as accounting hedges
Interest rate	Interest rate	$	86	$	1	$	—	$	87	Interest rate	$	457	$	4	$	—	$	461
Foreign exchange	Foreign exchange	57		50		—		107		Foreign exchange	550		101		—		651
Total	Total	143		51		—		194		Total	1,007		105		—		1,112
Not designated as accounting hedges	Not designated as accounting hedges									Not designated as accounting hedges
Economic hedges of loans	Economic hedges of loans									Economic hedges of loans
Credit	Credit	17		412		—		429		Credit	9		368		—		377
Other derivatives	Other derivatives									Other derivatives
Interest rate	Interest rate	140,770		6,112		233		147,115		Interest rate	135,661		28,581		455		164,697
Credit	Credit	5,609		3,463		—		9,072		Credit	5,535		2,390		—		7,925
Foreign exchange	Foreign exchange	71,851		1,196		41		73,088		Foreign exchange	110,322		2,512		104		112,938
Equity	Equity	39,597		—		41,081		80,678		Equity	23,138		—		28,193		51,331
Commodity and other	Commodity and other	17,188		—		5,740		22,928		Commodity and other	19,631		—		6,748		26,379
Total	Total	275,032		11,183		47,095		333,310		Total	294,296		33,851		35,500		363,647
Total gross derivatives	Total gross derivatives	$	275,175	$	11,234	$	47,095	$	333,504	Total gross derivatives	$	295,303	$	33,956	$	35,500	$	364,759
Amounts offset	Amounts offset									Amounts offset
Counterparty netting	Counterparty netting	(201,729)		(9,818)		(42,883)		(254,430)		Counterparty netting	(214,773)		(32,250)		(32,212)		(279,235)
Cash collateral netting	Cash collateral netting	(43,305)		(1,201)		—		(44,506)		Cash collateral netting	(45,884)		(1,505)		—		(47,389)
Total in Trading liabilities	Total in Trading liabilities	$	30,141	$	215	$	4,212	$	34,568	Total in Trading liabilities	$	34,646	$	201	$	3,288	$	38,135
Amounts not offset1	Amounts not offset1									Amounts not offset1
Financial instruments collateral	Financial instruments collateral	(5,866)		(8)		(39)		(5,913)		Financial instruments collateral	(2,545)		—		(1,139)		(3,684)
Net amounts	Net amounts	$	24,275	$	207	$	4,173	$	28,655	Net amounts	$	32,101	$	201	$	2,149	$	34,451
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							$	6,194	Net amounts for which master netting or collateral agreements are not in place or may not be legally enforceable							$	6,430

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.

See Note 4 for information related to the unsettled fair value of futures contracts not designated as accounting hedges, which are excluded from the previous tables.

Notionals of Derivative Contracts


		Assets at March 31, 2022									Assets at March 31, 2023
$ in billions	$ in billions	Bilateral OTC		Cleared OTC		Exchange- Traded		Total		$ in billions	Bilateral OTC		Cleared OTC		Exchange- Traded		Total
Designated as accounting hedges	Designated as accounting hedges									Designated as accounting hedges
Interest rate	Interest rate	$	4	$	73	$	—	$	77	Interest rate	$	—	$	66	$	—	$	66
Foreign exchange	Foreign exchange	9		1		—		10		Foreign exchange	4		1		—		5
Total	Total	13		74		—		87		Total	4		67		—		71
Not designated as accounting hedges	Not designated as accounting hedges									Not designated as accounting hedges
Economic hedges of loans	Economic hedges of loans									Economic hedges of loans
Credit	Credit	—		1		—		1		Credit	—		2		—		2
Other derivatives	Other derivatives									Other derivatives
Interest rate	Interest rate	3,626		9,434		758		13,818		Interest rate	3,679		9,530		696		13,905
Credit	Credit	231		150		—		381		Credit	214		136		—		350
Foreign exchange	Foreign exchange	3,806		146		10		3,962		Foreign exchange	3,803		190		16		4,009
Equity	Equity	516		—		419		935		Equity	521		—		390		911
Commodity and other	Commodity and other	171		—		75		246		Commodity and other	141		—		66		207
Total	Total	8,350		9,731		1,262		19,343		Total	8,358		9,858		1,168		19,384
Total gross derivatives	Total gross derivatives	$	8,363	$	9,805	$	1,262	$	19,430	Total gross derivatives	$	8,362	$	9,925	$	1,168	$	19,455


~~March 2022 Form 10-Q~~			44


~~Table of Contents~~
Notes to Consolidated Financial Statements (Unaudited)


		Liabilities at March 31, 2022									Liabilities at March 31, 2023
$ in billions	$ in billions	Bilateral OTC		Cleared OTC		Exchange- Traded		Total		$ in billions	Bilateral OTC		Cleared OTC		Exchange- Traded		Total
Designated as accounting hedges	Designated as accounting hedges									Designated as accounting hedges
Interest rate	Interest rate	$	—	$	128	$	—	$	128	Interest rate	$	2	$	183	$	—	$	185
Foreign exchange	Foreign exchange	4		3		—		7		Foreign exchange	10		3		—		13
Total	Total	4		131		—		135		Total	12		186		—		198
Not designated as accounting hedges	Not designated as accounting hedges									Not designated as accounting hedges
Economic hedges of loans	Economic hedges of loans									Economic hedges of loans
Credit	Credit	1		10		—		11		Credit	—		18		—		18
Other derivatives	Other derivatives									Other derivatives
Interest rate	Interest rate	3,577		9,060		629		13,266		Interest rate	3,975		8,944		432		13,351
Credit	Credit	231		146		—		377		Credit	205		136		—		341
Foreign exchange	Foreign exchange	3,690		139		19		3,848		Foreign exchange	3,910		147		34		4,091
Equity	Equity	547		—		770		1,317		Equity	542		—		582		1,124
Commodity and other	Commodity and other	129		—		91		220		Commodity and other	97		—		87		184
Total	Total	8,175		9,355		1,509		19,039		Total	8,729		9,245		1,135		19,109
Total gross derivatives	Total gross derivatives	$	8,179	$	9,486	$	1,509	$	19,174	Total gross derivatives	$	8,741	$	9,431	$	1,135	$	19,307


		Assets at December 31, 2021									Assets at December 31, 2022
$ in billions	$ in billions	Bilateral OTC		Cleared OTC		Exchange- Traded		Total		$ in billions	Bilateral OTC		Cleared OTC		Exchange-Traded		Total
Designated as accounting hedges	Designated as accounting hedges									Designated as accounting hedges
Interest rate	Interest rate	$	4	$	104	$	—	$	108	Interest rate	$	2	$	62	$	—	$	64
Foreign exchange	Foreign exchange	8		1		—		9		Foreign exchange	2		2		—		4
Total	Total	12		105		—		117		Total	4		64		—		68
Not designated as accounting hedges	Not designated as accounting hedges									Not designated as accounting hedges
Economic hedges of loans	Economic hedges of loans									Economic hedges of loans
Credit	Credit	—		—		—		—		Credit	—		3		—		3
Other derivatives	Other derivatives									Other derivatives
Interest rate	Interest rate	3,488		7,082		570		11,140		Interest rate	3,404		7,609		614		11,627
Credit	Credit	216		105		—		321		Credit	190		130		—		320
Foreign exchange	Foreign exchange	3,386		95		10		3,491		Foreign exchange	3,477		126		15		3,618
Equity	Equity	495		—		407		902		Equity	488		—		358		846
Commodity and other	Commodity and other	139		—		73		212		Commodity and other	141		—		59		200
Total	Total	7,724		7,282		1,060		16,066		Total	7,700		7,868		1,046		16,614
Total gross derivatives	Total gross derivatives	$	7,736	$	7,387	$	1,060	$	16,183	Total gross derivatives	$	7,704	$	7,932	$	1,046	$	16,682


		Liabilities at December 31, 2021									Liabilities at December 31, 2022
$ in billions	$ in billions	Bilateral OTC		Cleared OTC		Exchange- Traded		Total		$ in billions	Bilateral OTC		Cleared OTC		Exchange-Traded		Total
Designated as accounting hedges	Designated as accounting hedges									Designated as accounting hedges
Interest rate	Interest rate	$	—	$	99	$	—	$	99	Interest rate	$	3	$	187	$	—	$	190
Foreign exchange	Foreign exchange	5		3		—		8		Foreign exchange	12		2		—		14
Total	Total	5		102		—		107		Total	15		189		—		204
Not designated as accounting hedges	Not designated as accounting hedges									Not designated as accounting hedges
Economic hedges of loans	Economic hedges of loans									Economic hedges of loans
Credit	Credit	1		12		—		13		Credit	—		15		—		15
Other derivatives	Other derivatives									Other derivatives
Interest rate	Interest rate	3,827		6,965		445		11,237		Interest rate	3,436		7,761		497		11,694
Credit	Credit	225		106		—		331		Credit	199		125		—		324
Foreign exchange	Foreign exchange	3,360		88		12		3,460		Foreign exchange	3,516		123		35		3,674
Equity	Equity	552		—		735		1,287		Equity	488		—		552		1,040
Commodity and other	Commodity and other	110		—		81		191		Commodity and other	101		—		79		180
Total	Total	8,075		7,171		1,273		16,519		Total	7,740		8,024		1,163		16,927
Total gross derivatives	Total gross derivatives	$	8,080	$	7,273	$	1,273	$	16,626	Total gross derivatives	$	7,755	$	8,213	$	1,163	$	17,131

The notional amounts of derivative contracts generally overstate the Firm’s exposure. In most circumstances, notional amounts are used only as a reference point from which to calculate amounts owed between the parties to the contract. Furthermore, notional amounts do not reflect the


March 2023 Form 10-Q			46


Table of Contents
Notes to Consolidated Financial Statements (Unaudited)

benefit of legally enforceable netting arrangements or risk mitigating transactions.

For a discussion of the Firm’s derivative instruments and hedging activities, see Note 7 to the financial statements in the ~~2021~~2022 Form 10-K.

Gains (Losses) on Accounting Hedges


		Three Months Ended						Three Months Ended
		March 31,						March 31,
$ in millions	$ in millions	2022		2021			$ in millions		2023		2022
Fair value hedges—Recognized in Interest income	Fair value hedges—Recognized in Interest income					Fair value hedges—Recognized in Interest income
Interest rate contracts	Interest rate contracts	$	795	$	831		Interest rate contracts		$	(372)	$	795
Investment Securities—AFS	Investment Securities—AFS	(751)		(772)			Investment Securities—AFS		381		(751)
Fair value hedges—Recognized in Interest expense	Fair value hedges—Recognized in Interest expense					Fair value hedges—Recognized in Interest expense
Interest rate contracts	Interest rate contracts	$	(6,233)	$	(4,108)		Interest rate contracts		$	2,284	$	(6,233)
Deposits	Deposits	88		36			Deposits		(54)		88
Borrowings	Borrowings	6,155		4,021			Borrowings		(2,240)		6,155
Net investment hedges—Foreign exchange contracts	Net investment hedges—Foreign exchange contracts					Net investment hedges—Foreign exchange contracts
Recognized in OCI	Recognized in OCI	$	139	$	405		Recognized in OCI		$	(89)	$	139
Forward points excluded from hedge effectiveness testing—Recognized in Interest income	Forward points excluded from hedge effectiveness testing—Recognized in Interest income	(41)		1			Forward points excluded from hedge effectiveness testing—Recognized in Interest income		43		(41)
Cash flow hedges—Interest rate contracts1							Cash flow hedges—Interest rate contracts1
Recognized in OCI							Recognized in OCI		$	7	$	—
Less: Realized gains (losses) (pre-tax) reclassified from AOCI to interest income							Less: Realized gains (losses) (pre-tax) reclassified from AOCI to interest income		(1)		—
Net change in cash flow hedges included within AOCI							Net change in cash flow hedges included within AOCI		8		—

1.For the current quarter ended March 31, 2023, there were no forecasted transactions that failed to occur. The net gains (losses) associated with cash flow hedges expected to be reclassified from AOCI within 12 months as of March 31, 2023 is approximately $(7) million. The maximum length of time over which forecasted cash flows are hedged is 2 years.

Fair Value Hedges—Hedged Items


$ in millions	$ in millions	At March 31, 2022		At December 31, 2021		$ in millions	At March 31, 2023		At December 31, 2022
Investment Securities—AFS	Investment Securities—AFS					Investment Securities—AFS
Amortized cost basis currently or previously hedged	Amortized cost basis currently or previously hedged	$	11,039	$	17,902	Amortized cost basis currently or previously hedged	$	34,559	$	34,073
Basis adjustments included in amortized cost1	Basis adjustments included in amortized cost1	$	(840)	$	(591)	Basis adjustments included in amortized cost1	$	(1,152)	$	(1,628)
Deposits	Deposits					Deposits
Carrying amount currently or previously hedged	Carrying amount currently or previously hedged	$	4,807	$	6,279	Carrying amount currently or previously hedged	$	6,162	$	3,735
Basis adjustments included in carrying amount1	Basis adjustments included in carrying amount1	$	(83)	$	5	Basis adjustments included in carrying amount1	$	(65)	$	(119)
Borrowings	Borrowings					Borrowings
Carrying amount currently or previously hedged	Carrying amount currently or previously hedged	$	122,770	$	122,919	Carrying amount currently or previously hedged	$	147,736	$	146,025
Basis adjustments included in carrying amount—Outstanding hedges	Basis adjustments included in carrying amount—Outstanding hedges	$	(3,831)	$	2,324	Basis adjustments included in carrying amount—Outstanding hedges	$	(10,510)	$	(12,748)
Basis adjustments included in carrying amount—Terminated hedges	Basis adjustments included in carrying amount—Terminated hedges	$	(736)	$	(743)	Basis adjustments included in carrying amount—Terminated hedges	$	(692)	$	(715)

1.Hedge accounting basis adjustments are primarily related to outstanding hedges.

Gains (Losses) on Economic Hedges of Loans


		Three Months Ended						Three Months Ended
		March 31,						March 31,
$ in millions	$ in millions	2022		2021			$ in millions		2023		2022
Recognized in Other revenues	Recognized in Other revenues					Recognized in Other revenues
Credit contracts1	Credit contracts1	$	51	$	(105)		Credit contracts1		$	(161)	$	51

1.Amounts related to hedges of certain held-for-investment and held-for-sale loans.

Net Derivative Liabilities and Collateral Posted


$ in millions	$ in millions	At March 31, 2022		At December 31, 2021		$ in millions	At March 31, 2023		At December 31, 2022
Net derivative liabilities with credit risk-related contingent features	Net derivative liabilities with credit risk-related contingent features	$	22,090	$	20,548	Net derivative liabilities with credit risk-related contingent features	$	18,180	$	20,287
Collateral posted	Collateral posted	14,470		14,789		Collateral posted	13,064		12,268

The previous table presents the aggregate fair value of certain derivative contracts that contain credit risk-related contingent features that are in a net liability position for which the Firm has posted collateral in the normal course of business.


			45			~~March 2022 Form 10-Q~~


~~Table of Contents~~
Notes to Consolidated Financial Statements (Unaudited)

Incremental Collateral and Termination Payments upon Potential Future Ratings Downgrade


$ in millions	At March 31, ~~2022~~2023
One-notch downgrade	$	~~310~~497
Two-notch downgrade	~~550~~359
Bilateral downgrade agreements included in the amounts above1	$	~~637~~748

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.

The additional collateral or termination payments that may be called in the event of a future credit rating downgrade vary by contract and can be based on ratings by either or both of Moody’s Investors Service, Inc. and S&P Global Ratings. The previous table shows the future potential collateral amounts and termination payments that could be called or required by counterparties or exchange and clearing organizations in the event of one-notch or two-notch downgrade scenarios based on the relevant contractual downgrade triggers.

Maximum Potential Payout/Notional of Credit Protection Sold1


		Years to Maturity at March 31, 2022											Years to Maturity at March 31, 2023
$ in billions	$ in billions	< 1		1-3		3-5		Over 5		Total		$ in billions	< 1		1-3		3-5		Over 5		Total
Single-name CDS	Single-name CDS											Single-name CDS
Investment grade	Investment grade	$	11	$	27	$	30	$	13	$	81	Investment grade	$	12	$	30	$	33	$	15	$	90
Non-investment grade	Non-investment grade	5		13		17		5		40		Non-investment grade	5		13		17		6		41
Total	Total	$	16	$	40	$	47	$	18	$	121	Total	$	17	$	43	$	50	$	21	$	131
Index and basket CDS	Index and basket CDS											Index and basket CDS
Investment grade	Investment grade	$	2	$	11	$	107	$	48	$	168	Investment grade	$	3	$	9	$	14	$	1	$	27
Non-investment grade	Non-investment grade	9		16		37		24		86		Non-investment grade	8		21		104		49		182
Total	Total	$	11	$	27	$	144	$	72	$	254	Total	$	11	$	30	$	118	$	50	$	209
Total CDS sold	Total CDS sold	$	27	$	67	$	191	$	90	$	375	Total CDS sold	$	28	$	73	$	168	$	71	$	340
Other credit contracts	Other credit contracts	—		—		—		—		—		Other credit contracts	—		—		—		—		—
Total credit protection sold	Total credit protection sold	$	27	$	67	$	191	$	90	$	375	Total credit protection sold	$	28	$	73	$	168	$	71	$	340
CDS protection sold with identical protection purchased	CDS protection sold with identical protection purchased									$	331	CDS protection sold with identical protection purchased									$	282

Years to Maturity at December 31, 2021
$ in billions < 1 1-3 3-5 Over 5 Total
Single-name CDS
Investment grade $ 10 $ 26 $ 29 $ 9 $ 74
Non-investment grade 5 13 17 2 37
Total $ 15 $ 39 $ 46 $ 11 $ 111
Index and basket CDS
Investment grade $ 2 $ 11 $ 106 $ 15 $ 134
Non-investment grade 9 14 37 12 72
Total $ 11 $ 25 $ 143 $ 27 $ 206
Total CDS sold $ 26 $ 64 $ 189 $ 38 $ 317
Other credit contracts — — — — —
Total credit protection sold $ 26 $ 64 $ 189 $ 38 $ 317
CDS protection sold with identical protection purchased $ 278


			47			March 2023 Form 10-Q


Table of Contents
Notes to Consolidated Financial Statements (Unaudited)


	Years to Maturity at December 31, 2022
$ in billions	< 1		1-3		3-5		Over 5		Total
Single-name CDS
Investment grade	$	12	$	29	$	29	$	9	$	79
Non-investment grade	5		13		16		2		36
Total	$	17	$	42	$	45	$	11	$	115
Index and basket CDS
Investment grade	$	3	$	13	$	37	$	3	$	56
Non-investment grade	8		17		108		19		152
Total	$	11	$	30	$	145	$	22	$	208
Total CDS sold	$	28	$	72	$	190	$	33	$	323
Other credit contracts	—		—		—		—		—
Total credit protection sold	$	28	$	72	$	190	$	33	$	323
CDS protection sold with identical protection purchased									$	262

Fair Value Asset (Liability) of Credit Protection Sold1


$ in millions	$ in millions	At March 31, 2022		At December 31, 2021		$ in millions	At March 31, 2023		At December 31, 2022
Single-name CDS	Single-name CDS					Single-name CDS
Investment grade	Investment grade	$	1,309	$	1,428	Investment grade	$	1,168	$	762
Non-investment grade	Non-investment grade	(1,805)		(370)		Non-investment grade	(722)		(808)
Total	Total	$	(496)	$	1,058	Total	$	446	$	(46)
Index and basket CDS	Index and basket CDS					Index and basket CDS
Investment grade	Investment grade	$	1,422	$	1,393	Investment grade	$	924	$	859
Non-investment grade	Non-investment grade	(1,243)		(650)		Non-investment grade	(2,110)		(1,812)
Total	Total	$	179	$	743	Total	$	(1,186)	$	(953)
Total CDS sold	Total CDS sold	$	(317)	$	1,801	Total CDS sold	$	(740)	$	(999)
Other credit contracts	Other credit contracts	(3)		(3)		Other credit contracts	6		(1)
Total credit protection sold	Total credit protection sold	$	(320)	$	1,798	Total credit protection sold	$	(734)	$	(1,000)

1.Investment grade/non-investment grade determination is based on the internal credit rating of the reference obligation. Internal credit ratings serve as the CRM’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.

Protection Purchased with CDS


		Notional					Notional
$ in billions	$ in billions	At March 31, 2022		At December 31, 2021		$ in billions	At March 31, 2023		At December 31, 2022
Single name	Single name	$	138	$	126	Single name	$	159	$	140
Index and basket	Index and basket	235		204		Index and basket	181		173
Tranched index and basket	Tranched index and basket	22		18		Tranched index and basket	31		26
Total	Total	$	395	$	348	Total	$	371	$	339


		Fair Value Asset (Liability)					Fair Value Asset (Liability)
$ in millions	$ in millions	At March 31, 2022		At December 31, 2021		$ in millions	At March 31, 2023		At December 31, 2022
Single name	Single name	$	433	$	(1,338)	Single name	$	(645)	$	(33)
Index and basket	Index and basket	228		(563)		Index and basket	1,595		1,248
Tranched index and basket	Tranched index and basket	(340)		(451)		Tranched index and basket	(428)		(217)
Total	Total	$	321	$	(2,352)	Total	$	522	$	998

The Firm enters into credit derivatives, principally CDS, under which it receives or provides protection against the risk of default on a set of debt obligations issued by a specified reference entity or entities. A majority of the Firm’s counterparties for these derivatives are banks, broker-dealers, and insurance and other financial institutions.

The fair value amounts as shown in the previous tables are prior to cash collateral or counterparty netting. For further

information on credit derivatives and other credit contracts, see Note 7 to the financial statements in the ~~2021~~2022 Form 10-K.


~~March 2022 Form 10-Q~~			46


~~Table of Contents~~
Notes to Consolidated Financial Statements (Unaudited)

7. Investment Securities

AFS and HTM Securities


		At March 31, 2022									At March 31, 2023
$ in millions	$ in millions	Amortized Cost1		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		$ in millions	Amortized Cost1		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
AFS securities	AFS securities									AFS securities
U.S. Treasury securities	U.S. Treasury securities	$	57,973	$	25	$	1,519	$	56,479	U.S. Treasury securities	$	54,861	$	31	$	1,845	$	53,047
U.S. agency securities2	U.S. agency securities2	23,863		13		1,143		22,733		U.S. agency securities2	25,272		2		2,508		22,766
Agency CMBS	Agency CMBS	8,596		42		189		8,449		Agency CMBS	6,020		—		465		5,555

State and municipal securities	State and municipal securities	1,334		5		37		1,302		State and municipal securities	1,492		32		22		1,502
FFELP student loan ABS3	FFELP student loan ABS3	1,401		4		14		1,391		FFELP student loan ABS3	1,093		—		31		1,062

Total AFS securities	Total AFS securities	93,167		89		2,902		90,354		Total AFS securities	88,738		65		4,871		83,932
HTM securities	HTM securities									HTM securities
U.S. Treasury securities	U.S. Treasury securities	29,526		117		544		29,099		U.S. Treasury securities	27,709		—		1,456		26,253
U.S. agency securities2	U.S. agency securities2	47,656		5		4,079		43,582		U.S. agency securities2	43,343		—		7,885		35,458
Agency CMBS	Agency CMBS	2,166		—		115		2,051		Agency CMBS	1,770		—		138		1,632
Non-agency CMBS	Non-agency CMBS	1,091		1		48		1,044		Non-agency CMBS	1,190		2		116		1,076
Total HTM securities	Total HTM securities	80,439		123		4,786		75,776		Total HTM securities	74,012		2		9,595		64,419
Total investment securities	Total investment securities	$	173,606	$	212	$	7,688	$	166,130	Total investment securities	$	162,750	$	67	$	14,466	$	148,351


		At December 31, 2021									At December 31, 2022
$ in millions	$ in millions	Amortized Cost1		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		$ in millions	Amortized Cost1		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
AFS securities	AFS securities									AFS securities
U.S. Treasury securities	U.S. Treasury securities	$	58,974	$	343	$	296	$	59,021	U.S. Treasury securities	$	56,103	$	17	$	2,254	$	53,866
U.S. agency securities2	U.S. agency securities2	26,780		274		241		26,813		U.S. agency securities2	23,926		1		2,753		21,174
Agency CMBS	Agency CMBS	14,476		289		89		14,676		Agency CMBS	5,998		—		470		5,528

Non-agency CMBS										Non-agency CMBS	—		—		—		—
Corporate bonds										Corporate bonds	—		—		—		—
State and municipal securities	State and municipal securities	613		37		2		648		State and municipal securities	2,598		71		42		2,627
FFELP student loan ABS3	FFELP student loan ABS3	1,672		11		11		1,672		FFELP student loan ABS3	1,147		—		45		1,102

Total AFS securities	Total AFS securities	102,515		954		639		102,830		Total AFS securities	89,772		89		5,564		84,297
HTM securities	HTM securities									HTM securities
U.S. Treasury securities	U.S. Treasury securities	28,653		882		81		29,454		U.S. Treasury securities	28,599		—		1,845		26,754
U.S. agency securities2	U.S. agency securities2	48,195		169		1,228		47,136		U.S. agency securities2	44,038		—		8,487		35,551
Agency CMBS	Agency CMBS	2,267		—		51		2,216		Agency CMBS	1,819		—		152		1,667
Non-agency CMBS	Non-agency CMBS	1,053		28		5		1,076		Non-agency CMBS	1,178		—		144		1,034
Total HTM securities	Total HTM securities	80,168		1,079		1,365		79,882		Total HTM securities	75,634		—		10,628		65,006
Total investment securities	Total investment securities	$	182,683	$	2,033	$	2,004	$	182,712	Total investment securities	$	165,406	$	89	$	16,192	$	149,303

1.Amounts are net of any ACL.

2.U.S. agency securities consist mainly of agency mortgage pass-through pool securities, CMOs and agency-issued debt.

3.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.


March 2023 Form 10-Q			48


Table of Contents
Notes to Consolidated Financial Statements (Unaudited)

AFS Securities in an Unrealized Loss Position


		At March 31, 2022				At December 31, 2021					At March 31, 2023				At December 31, 2022
$ in millions	$ in millions	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		$ in millions	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
U.S. Treasury securities	U.S. Treasury securities									U.S. Treasury securities
Less than 12 months	Less than 12 months	$	39,314	$	1,252	$	31,459	$	296	Less than 12 months	$	22,043	$	1,078	$	42,144	$	1,711
12 months or longer	12 months or longer	6,828		267		—		—		12 months or longer	24,271		767		11,454		543
Total	Total	46,142		1,519		31,459		296		Total	46,314		1,845		53,598		2,254
U.S. agency securities	U.S. agency securities									U.S. agency securities
Less than 12 months	Less than 12 months	16,478		816		12,283		219		Less than 12 months	8,293		485		13,662		1,271
12 months or longer	12 months or longer	3,624		327		1,167		22		12 months or longer	13,505		2,023		7,060		1,482
Total	Total	20,102		1,143		13,450		241		Total	21,798		2,508		20,722		2,753
Agency CMBS	Agency CMBS									Agency CMBS
Less than 12 months	Less than 12 months	3,634		182		2,872		89		Less than 12 months	5,299		436		5,343		448
12 months or longer	12 months or longer	142		7		10		—		12 months or longer	256		29		185		22
Total	Total	3,776		189		2,882		89		Total	5,555		465		5,528		470

State and municipal securities	State and municipal securities									State and municipal securities
Less than 12 months	Less than 12 months	1,112		37		21		2		Less than 12 months	231		1		2,106		40

12 months or longer										12 months or longer	516		21		65		2
Total	Total	1,112		37		21		2		Total	747		22		2,171		42
FFELP student loan ABS	FFELP student loan ABS									FFELP student loan ABS
Less than 12 months	Less than 12 months	580		5		320		1		Less than 12 months	475		11		627		23
12 months or longer	12 months or longer	412		9		591		10		12 months or longer	573		20		476		22
Total	Total	992		14		911		11		Total	1,048		31		1,103		45

Total AFS securities in an unrealized loss position	Total AFS securities in an unrealized loss position									Total AFS securities in an unrealized loss position
Less than 12 months	Less than 12 months	61,118		2,292		46,955		607		Less than 12 months	36,341		2,011		63,882		3,493
12 months or longer	12 months or longer	11,006		610		1,775		32		12 months or longer	39,121		2,860		19,240		2,071
Total	Total	$	72,124	$	2,902	$	48,730	$	639	Total	$	75,462	$	4,871	$	83,122	$	5,564

For AFS securities, the Firm believes there are no securities in an unrealized loss position that have credit losses after performing the analysis described in Note 2 in the ~~2021~~2022 Form 10-K and the Firm expects to recover the amortized cost basis of these securities. Additionally, the Firm does not intend to sell these securities and is not likely to be required to sell these securities prior to recovery of the amortized cost basis. As of March 31, ~~2022~~2023 and December 31, ~~2021,~~2022, the securities in an unrealized loss position are predominantly investment grade.

The HTM securities net carrying amounts at March 31, ~~2022~~2023 and December 31, ~~2021~~2022 reflect an ACL of $30 million and ~~$33~~$34 million, respectively, predominantly related to Non-agency CMBS. See Note 2 in the ~~2021~~2022 Form 10-K for a description of the ACL methodology used for HTM Securities. As of March 31, ~~2022,~~2023 and December 31, ~~2021,~~2022, Non-Agency CMBS HTM securities were predominantly on accrual status and investment grade.

See Note 14 for additional information on securities issued by VIEs, including U.S. agency mortgage-backed securities, non-agency CMBS, and FFELP student loan ABS.

Investment Securities by Contractual Maturity


	At March 31, 2023
$ in millions	Amortized Cost1		Fair Value		Annualized Average Yield2,3
AFS securities
U.S. Treasury securities:
Due within 1 year	$	16,150	$	15,862	1.0	%
After 1 year through 5 years	38,017		36,492		1.3	%
After 5 years through 10 years	694		693		3.6	%

Total	54,861		53,047
U.S. agency securities:
Due within 1 year	23		22		(0.2)	%
After 1 year through 5 years	422		394		1.5	%
After 5 years through 10 years	716		659		1.8	%
After 10 years	24,111		21,691		3.1	%
Total	25,272		22,766
Agency CMBS:

After 1 year through 5 years	1,773		1,676		1.8	%
After 5 years through 10 years	2,992		2,823		2.0	%
After 10 years	1,255		1,056		1.3	%
Total	6,020		5,555












State and municipal securities:
Due within 1 year	12		12		3.8	%
After 1 year through 5 years	48		49		3.9	%
After 5 years through 10 years	88		90		3.8	%
After 10 Years	1,344		1,351		3.9	%
Total	1,492		1,502
FFELP student loan ABS:

After 1 year through 5 years	110		105		5.5	%
After 5 years through 10 years	114		109		5.4	%
After 10 years	869		848		5.6	%
Total	1,093		1,062






Total AFS securities	88,738		83,932		1.9	%


			4749			March ~~2022~~2023 Form 10-Q


Table of Contents
Notes to Consolidated Financial Statements (Unaudited)

~~Investment Securities by Contractual Maturity~~

At March 31, 2022
$ in millions
Amortized
Cost1
Fair
Value
Annualized Average Yield2
AFS securities
U.S. Treasury securities:
Due within 1 year $ 8,901 $ 8,911 1.6 %
After 1 year through 5 years 45,839 44,349 1.0 %
After 5 years through 10 years 3,233 3,219 1.1 %
Total 57,973 56,479
U.S. agency securities:
Due within 1 year 12 12 0.5 %
After 1 year through 5 years 335 322 1.2 %
After 5 years through 10 years 1,179 1,148 1.8 %
After 10 years 22,337 21,251 1.8 %
Total 23,863 22,733
Agency CMBS:
Due within 1 year 217 217 1.8 %
After 1 year through 5 years 1,318 1,298 1.6 %
After 5 years through 10 years 5,339 5,337 1.8 %
After 10 years 1,722 1,597 1.4 %
Total 8,596 8,449
State and municipal securities:
Due within 1 year 7 7 1.4 %
After 1 year through 5 years 24 25 2.3 %
After 5 years through 10 years 106 103 2.4 %
After 10 Years 1,197 1,167 2.6 %
Total 1,334 1,302
FFELP student loan ABS:
After 1 year through 5 years 131 129 0.9 %
After 5 years through 10 years 139 135 0.7 %
After 10 years 1,131 1,127 1.2 %
Total 1,401 1,391
Total AFS securities 93,167 90,354 1.4 %
HTM securities
U.S. Treasury securities:
Due within 1 year 3,749 3,761 1.9 %
After 1 year through 5 years 19,336 18,974 1.7 %
After 5 years through 10 years 4,879 4,865 2.4 %
After 10 years 1,562 1,499 2.3 %
Total 29,526 29,099
U.S. agency securities:
After 5 years through 10 years 456 450 2.0 %
After 10 years 47,200 43,132 1.7 %
Total 47,656 43,582
Agency CMBS:
Due within 1 year 78 77 1.1 %
After 1 year through 5 years 1,371 1,312 1.3 %
After 5 years through 10 years 567 526 1.5 %
After 10 years 150 136 1.5 %
Total 2,166 2,051


		At March 31, 2022							At March 31, 2023
$ in millions	$ in millions	Amortized Cost1		Fair Value		Annualized Average Yield2		$ in millions	Amortized Cost1	Fair Value	Annualized Average Yield2
HTM securities								HTM securities
U.S. Treasury securities:								U.S. Treasury securities:
Due within 1 year								Due within 1 year	6,634	6,515	1.8	%
After 1 year through 5 years								After 1 year through 5 years	15,649	14,907	1.9	%
After 5 years through 10 years								After 5 years through 10 years	3,866	3,614	2.4	%
After 10 years								After 10 years	1,560	1,217	2.3	%
Total								Total	27,709	26,253
U.S. agency securities:								U.S. agency securities:

After 1 year through 5 years								After 1 year through 5 years	8	7	1.8	%
After 5 years through 10 years								After 5 years through 10 years	351	326	2.1	%
After 10 years								After 10 years	42,984	35,125	1.8	%
Total								Total	43,343	35,458
Agency CMBS:								Agency CMBS:
Due within 1 year								Due within 1 year	329	322	0.8	%
After 1 year through 5 years								After 1 year through 5 years	1,136	1,053	1.4	%
After 5 years through 10 years								After 5 years through 10 years	174	150	1.4	%
After 10 years								After 10 years	131	107	1.6	%
Total								Total	1,770	1,632
Non-agency CMBS:	Non-agency CMBS:							Non-agency CMBS:
Due within 1 year	Due within 1 year	167		167		4.2	%	Due within 1 year	198	195	4.0	%
After 1 year through 5 years	After 1 year through 5 years	90		89		3.4	%	After 1 year through 5 years	251	233	4.1	%
After 5 years through 10 years	After 5 years through 10 years	798		753		3.6	%	After 5 years through 10 years	706	617	3.8	%
After 10 years	After 10 years	36		35		4.4	%	After 10 years	35	31	3.6	%
Total	Total	1,091		1,044				Total	1,190	1,076
Total HTM securities	Total HTM securities	80,439		75,776		1.8	%	Total HTM securities	74,012	64,419	1.9	%
Total investment securities	Total investment securities	$	173,606	$	166,130	1.6	%	Total investment securities	162,750	148,351	1.9	%

1.Amounts are net of any ACL.

2.Annualized average yield is computed using the effective yield, weighted based on the amortized cost of each security. The effective yield is shown pre-tax and ~~considers the contractual coupon, amortization of premiums and accretion of discounts, and~~excludes the effect of related hedging derivatives.

3.At March 31, 2023, the annualized average yield, including the interest rate swap accrual of related hedges, was 1.0% for AFS securities contractually maturing within 1 year and 2.6% for all AFS securities.

Gross Realized Gains (Losses) on Sales of AFS Securities


		Three Months Ended March 31,						Three Months Ended March 31,
$ in millions	$ in millions		2022		2021		$ in millions		2023		2022
Gross realized gains	Gross realized gains		$	126	$	145	Gross realized gains		$	44	$	126
Gross realized (losses)	Gross realized (losses)		(82)		(11)		Gross realized (losses)		(3)		(82)
Total1	Total1		$	44	$	134	Total1		$	41	$	44

1.Realized gains and losses are recognized in Other revenues in the income statement.

8. Collateralized Transactions

Offsetting of Certain Collateralized Transactions

At March 31, 2022
$ in millions Gross Amounts Amounts Offset Balance Sheet Net Amounts
Amounts Not Offset1
Net Amounts
Assets
Securities purchased under agreements to resell $ 238,485 $ (110,718) $ 127,767 $ (123,988) $ 3,779
Securities borrowed 164,657 (13,662) 150,995 (143,492) 7,503
Liabilities
Securities sold under agreements to repurchase $ 170,786 $ (110,718) $ 60,068 $ (53,563) $ 6,505
Securities loaned 27,884 (13,662) 14,222 (13,930) 292
Net amounts for which master netting agreements are not in place or may not be legally enforceable
Securities purchased under agreements to resell $ 2,772
Securities borrowed 849
Securities sold under agreements to repurchase 5,010
Securities loaned 151


	At March 31, 2023
$ in millions	Gross Amounts		Amounts Offset		Balance Sheet Net Amounts		Amounts Not Offset1		Net Amounts
Assets
Securities purchased under agreements to resell	$	223,056	$	(101,171)	$	121,885	$	(118,330)	$	3,555
Securities borrowed	157,967		(11,751)		146,216		(142,775)		3,441
Liabilities
Securities sold under agreements to repurchase	$	161,662	$	(101,171)	$	60,491	$	(56,242)	$	4,249
Securities loaned	27,339		(11,751)		15,588		(15,135)		453
Net amounts for which master netting agreements are not in place or may not be legally enforceable
Securities purchased under agreements to resell									$	3,252
Securities borrowed									620
Securities sold under agreements to repurchase									3,368
Securities loaned									215


~~March 2022 Form 10-Q~~			48


~~Table of Contents~~
Notes to Consolidated Financial Statements (Unaudited)


		At December 31, 2021											At December 31, 2022
$ in millions	$ in millions	Gross Amounts		Amounts Offset		Balance Sheet Net Amounts		Amounts Not Offset1		Net Amounts		$ in millions	Gross Amounts		Amounts Offset		Balance Sheet Net Amounts		Amounts Not Offset1		Net Amounts
Assets	Assets											Assets
Securities purchased under agreements to resell	Securities purchased under agreements to resell	$	197,486	$	(77,487)	$	119,999	$	(106,896)	$	13,103	Securities purchased under agreements to resell	$	240,355	$	(126,448)	$	113,907	$	(109,902)	$	4,005
Securities borrowed	Securities borrowed	139,395		(9,682)		129,713		(124,028)		5,685		Securities borrowed	145,340		(11,966)		133,374		(128,073)		5,301
Liabilities	Liabilities											Liabilities
Securities sold under agreements to repurchase	Securities sold under agreements to repurchase	$	139,675	$	(77,487)	$	62,188	$	(53,692)	$	8,496	Securities sold under agreements to repurchase	$	188,982	$	(126,448)	$	62,534	$	(57,395)	$	5,139
Securities loaned	Securities loaned	21,981		(9,682)		12,299		(12,019)		280		Securities loaned	27,645		(11,966)		15,679		(15,199)		480
Net amounts for which master netting agreements are not in place or may not be legally enforceable	Net amounts for which master netting agreements are not in place or may not be legally enforceable											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									$	12,514	Securities purchased under agreements to resell									$	1,696
Securities borrowed	Securities borrowed									1,041		Securities borrowed									624
Securities sold under agreements to repurchase	Securities sold under agreements to repurchase									8,295		Securities sold under agreements to repurchase									3,861
Securities loaned	Securities loaned									139		Securities loaned									250

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.

For further discussion of the Firm’s collateralized transactions, see Note 2 and Note 9 to the financial statements in the ~~2021~~2022 Form 10-K. For information related to offsetting of derivatives, see Note 6.

Gross Secured Financing Balances by Remaining Contractual Maturity


		At March 31, 2022											At March 31, 2023
$ in millions	$ in millions	Overnight and Open		Less than 30 Days		30-90 Days		Over 90 Days		Total		$ in millions	Overnight and Open		Less than 30 Days		30-90 Days		Over 90 Days		Total
Securities sold under agreements to repurchase	Securities sold under agreements to repurchase	$	57,575	$	55,401	$	15,420	$	42,390	$	170,786	Securities sold under agreements to repurchase	$	63,922	$	41,521	$	17,262	$	38,957	$	161,662
Securities loaned	Securities loaned	17,040		—		675		10,169		27,884		Securities loaned	14,786		1		987		11,565		27,339
Total included in the offsetting disclosure	Total included in the offsetting disclosure	$	74,615	$	55,401	$	16,095	$	52,559	$	198,670	Total included in the offsetting disclosure	$	78,708	$	41,522	$	18,249	$	50,522	$	189,001
Trading liabilities— Obligation to return securities received as collateral	Trading liabilities— Obligation to return securities received as collateral	26,399		—		—		—		26,399		Trading liabilities— Obligation to return securities received as collateral	25,112		—		—		—		25,112
Total	Total	$	101,014	$	55,401	$	16,095	$	52,559	$	225,069	Total	$	103,820	$	41,522	$	18,249	$	50,522	$	214,113

At December 31, 2021
$ in millions Overnight and Open Less than 30 Days 30-90 Days Over 90 Days Total
Securities sold under agreements to repurchase $ 29,271 $ 53,987 $ 17,099 $ 39,318 $ 139,675
Securities loaned 11,480 364 650 9,487 21,981
Total included in the offsetting disclosure $ 40,751 $ 54,351 $ 17,749 $ 48,805 $ 161,656
Trading liabilities—
Obligation to return securities received as collateral 30,104 — — — 30,104
Total $ 70,855 $ 54,351 $ 17,749 $ 48,805 $ 191,760


March 2023 Form 10-Q			50


Table of Contents
Notes to Consolidated Financial Statements (Unaudited)


	At December 31, 2022
$ in millions	Overnight and Open		Less than 30 Days		30-90 Days		Over 90 Days		Total
Securities sold under agreements to repurchase	$	54,551	$	77,359	$	20,586	$	36,486	$	188,982
Securities loaned	15,150		882		1,984		9,629		27,645
Total included in the offsetting disclosure	$	69,701	$	78,241	$	22,570	$	46,115	$	216,627
Trading liabilities— Obligation to return securities received as collateral	22,880		—		—		—		22,880
Total	$	92,581	$	78,241	$	22,570	$	46,115	$	239,507

Gross Secured Financing Balances by Class of Collateral Pledged


$ in millions	$ in millions	At March 31, 2022		At December 31, 2021		$ in millions	At March 31, 2023		At December 31, 2022
Securities sold under agreements to repurchase	Securities sold under agreements to repurchase					Securities sold under agreements to repurchase
U.S. Treasury and agency securities	U.S. Treasury and agency securities	$	51,940	$	30,790	U.S. Treasury and agency securities	$	46,714	$	57,761
Other sovereign government obligations	Other sovereign government obligations	87,195		73,063		Other sovereign government obligations	78,048		98,839
Corporate equities	Corporate equities	19,200		25,881		Corporate equities	20,250		19,340
Other	Other	12,451		9,941		Other	16,650		13,042
Total	Total	$	170,786	$	139,675	Total	$	161,662	$	188,982
Securities loaned	Securities loaned					Securities loaned
Other sovereign government obligations	Other sovereign government obligations	$	858	$	748	Other sovereign government obligations	$	913	$	862
Corporate equities	Corporate equities	26,528		20,656		Corporate equities	25,312		26,289
Other	Other	498		577		Other	1,114		494
Total	Total	$	27,884	$	21,981	Total	$	27,339	$	27,645
Total included in the offsetting disclosure	Total included in the offsetting disclosure	$	198,670	$	161,656	Total included in the offsetting disclosure	$	189,001	$	216,627
Trading liabilities—Obligation to return securities received as collateral	Trading liabilities—Obligation to return securities received as collateral					Trading liabilities—Obligation to return securities received as collateral
Corporate equities	Corporate equities	$	26,370	$	30,048	Corporate equities	$	25,025	$	22,833
Other	Other	29		56		Other	87		47
Total	Total	$	26,399	$	30,104	Total	$	25,112	$	22,880
Total	Total	$	225,069	$	191,760	Total	$	214,113	$	239,507

Carrying Value of Assets Loaned or Pledged without Counterparty Right to Sell or Repledge

$ in millions At
March 31,
2022 At
December 31,
2021
Trading assets $ 32,061 $ 32,458


$ in millions	At March 31, 2023		At December 31, 2022
	$	34,669	$	34,524

The Firm pledges certain of its trading assets to collateralize securities sold under agreements to repurchase, securities loaned, other secured financings and derivatives and to cover customer short sales. Counterparties may or may not have the right to sell or repledge the collateral.

Pledged financial instruments that can be sold or repledged by the secured party are identified as Trading assets (pledged to various parties) in the balance sheet.

Fair Value of Collateral Received with Right to Sell or Repledge


$ in millions	$ in millions	At March 31, 2022		At December 31, 2021		$ in millions	At March 31, 2023		At December 31, 2022
Collateral received with right to sell or repledge	Collateral received with right to sell or repledge	$	725,931	$	672,104	Collateral received with right to sell or repledge	$	681,133	$	637,941
Collateral that was sold or repledged1	Collateral that was sold or repledged1	564,304		510,000		Collateral that was sold or repledged1	525,199		486,820

1.Does not include securities used to meet federal regulations for the Firm’s U.S. broker-dealers.

The Firm receives collateral in the form of securities in connection with securities purchased under agreements to resell, securities borrowed, securities-for-securities transactions, derivative transactions, customer margin loans and securities-based lending. In many cases, the Firm is permitted to sell or repledge this collateral to secure securities sold under agreements to repurchase, to enter into securities lending and derivative transactions or to deliver to counterparties to cover short positions.


			49			~~March 2022 Form 10-Q~~


~~Table of Contents~~
Notes to Consolidated Financial Statements (Unaudited)

Securities Segregated for Regulatory Purposes


$ in millions	$ in millions	At March 31, 2022		At December 31, 2021		$ in millions	At March 31, 2023		At December 31, 2022
Segregated securities1	Segregated securities1	$	30,324	$	20,092	Segregated securities1	$	28,959	$	32,254

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 sheet.

Customer Margin and Other Lending


$ in millions	$ in millions	At March 31, 2022		At December 31, 2021		$ in millions	At March 31, 2023		At December 31, 2022
Margin and other lending	Margin and other lending	$	56,348	$	71,532	Margin and other lending	$	39,354	$	38,524

The Firm provides margin lending arrangements that allow customers to borrow against the value of qualifying securities. Receivables from these arrangements are included within Customer and other receivables in the balance sheet. Under these arrangements, the Firm receives collateral, which includes U.S. government and agency securities, other sovereign government obligations, corporate and other debt, and corporate equities. Margin loans are collateralized by customer-owned securities held by the Firm. The Firm monitors required margin levels and established credit terms daily and, pursuant to such guidelines, requires customers to deposit additional collateral, or reduce positions, when necessary.

For a further discussion of the Firm’s margin lending activities, see Note 9 to the financial statements in the ~~2021~~2022 Form 10-K.

Also included in the amounts in the previous table is non-purpose securities-based lending on non-bank entities in the Wealth Management business segment.

Other Secured Financings

The Firm has additional secured liabilities. For a further discussion of other secured financings, see Note 12.


			51			March 2023 Form 10-Q


Table of Contents
Notes to Consolidated Financial Statements (Unaudited)

9. Loans, Lending Commitments and Related Allowance for Credit Losses

Loans by Type


		At March 31, 2022							At March 31, 2023
$ in millions	$ in millions	HFI Loans		HFS Loans		Total Loans		$ in millions	HFI Loans		HFS Loans		Total Loans
Corporate	Corporate	$	6,105	$	7,069	$	13,174	Corporate	$	7,435	$	11,150	$	18,585
Secured lending facilities	Secured lending facilities	29,896		4,661		34,557		Secured lending facilities	37,187		3,006		40,193
Commercial real estate	Commercial real estate	8,276		1,986		10,262		Commercial real estate	8,601		948		9,549
Residential real estate	Residential real estate	47,236		6		47,242		Residential real estate	55,400		25		55,425
Securities-based lending and Other loans	Securities-based lending and Other loans	91,413		291		91,704		Securities-based lending and Other loans	91,897		17		91,914
Total loans	Total loans	182,926		14,013		196,939		Total loans	200,520		15,146		215,666
ACL	ACL	(679)				(679)		ACL	(970)				(970)
Total loans, net	Total loans, net	$	182,247	$	14,013	$	196,260	Total loans, net	$	199,550	$	15,146	$	214,696
Loans to non-U.S. borrowers, net	Loans to non-U.S. borrowers, net					$	24,286	Loans to non-U.S. borrowers, net					$	24,395


		At December 31, 2021							At December 31, 2022
$ in millions	$ in millions	HFI Loans		HFS Loans		Total Loans		$ in millions	HFI Loans		HFS Loans		Total Loans
Corporate	Corporate	$	5,567	$	8,107	$	13,674	Corporate	$	6,589	$	10,634	$	17,223
Secured lending facilities	Secured lending facilities	31,471		3,879		35,350		Secured lending facilities	35,606		3,176		38,782
Commercial real estate	Commercial real estate	7,227		1,777		9,004		Commercial real estate	8,515		926		9,441
Residential real estate	Residential real estate	44,251		7		44,258		Residential real estate	54,460		4		54,464
Securities-based lending and Other loans	Securities-based lending and Other loans	86,440		62		86,502		Securities-based lending and Other loans	94,666		48		94,714
Total loans	Total loans	174,956		13,832		188,788		Total loans	199,836		14,788		214,624
ACL	ACL	(654)				(654)		ACL	(839)				(839)
Total loans, net	Total loans, net	$	174,302	$	13,832	$	188,134	Total loans, net	$	198,997	$	14,788	$	213,785
Loans to non-U.S. borrowers, net	Loans to non-U.S. borrowers, net					$	24,322	Loans to non-U.S. borrowers, net					$	23,651

For additional information on the Firm’s held-for-investment and held-for-sale loan portfolios, see Note 10 to the financial statements in the ~~2021~~2022 Form 10-K.

Loans by Interest Rate Type


		At March 31, 2022				At December 31, 2021					At March 31, 2023				At December 31, 2022
$ in millions	$ in millions	Fixed Rate		Floating or Adjustable Rate		Fixed Rate		Floating or Adjustable Rate		$ in millions	Fixed Rate		Floating or Adjustable Rate		Fixed Rate		Floating or Adjustable Rate
Corporate	Corporate	$	—	$	13,174	$	—	$	13,674	Corporate	$	—	$	18,584	$	—	$	17,223
Secured lending facilities	Secured lending facilities	—		34,557		—		35,350		Secured lending facilities	—		40,193		—		38,782
Commercial real estate	Commercial real estate	342		9,920		343		8,661		Commercial real estate	204		9,346		204		9,237
Residential real estate	Residential real estate	20,754		26,488		18,966		25,292		Residential real estate	25,515		29,909		24,903		29,561
Securities-based lending and Other loans	Securities-based lending and Other loans	24,705		66,999		22,832		63,670		Securities-based lending and Other loans	22,253		69,662		24,077		70,637
Total loans, before ACL	Total loans, before ACL	$	45,801	$	151,138	$	42,141	$	146,647	Total loans, before ACL	$	47,972	$	167,694	$	49,184	$	165,440

See Note 4 for further information regarding Loans and lending commitments held at fair value. See Note 13 for details of current commitments to lend in the future.

Loans Held for Investment before Allowance by Origination Year


		At March 31, 2022						At December 31, 2021							At March 31, 2023						At December 31, 2022
		Corporate													Corporate
$ in millions	$ in millions	IG		NIG		Total		IG		NIG		Total		$ in millions	IG		NIG		Total		IG		NIG		Total
Revolving	Revolving	$	2,681	$	2,541	$	5,222	$	2,356	$	2,328	$	4,684	Revolving	$	2,907	$	4,004	$	6,911	$	2,554	$	3,456	$	6,010
2023														2023	—		13		13
2022	2022	—		3		3								2022	—		143		143		6		107		113
2021	2021	—		94		94		—		85		85		2021	—		137		137		—		139		139
2020	2020	110		27		137		111		26		137		2020	—		59		59		—		58		58
2019	2019	—		169		169		—		176		176		2019	—		153		153		—		154		154
2018		196		—		196		196		—		196
Prior	Prior	225		59		284		229		60		289		Prior	—		19		19		115		—		115
Total	Total	$	3,212	$	2,893	$	6,105	$	2,892	$	2,675	$	5,567	Total	$	2,907	$	4,528	$	7,435	$	2,675	$	3,914	$	6,589


		At March 31, 2022						At December 31, 2021							At March 31, 2023						At December 31, 2022
		Secured Lending Facilities													Secured Lending Facilities
$ in millions	$ in millions	IG		NIG		Total		IG		NIG		Total		$ in millions	IG		NIG		Total		IG		NIG		Total
Revolving	Revolving	$	7,784	$	18,539	$	26,323	$	7,603	$	20,172	$	27,775	Revolving	$	9,338	$	21,713	$	31,051	$	9,445	$	21,243	$	30,688
2023														2023	956		255		1,211
2022	2022	—		403		403								2022	1,090		1,489		2,579		1,135		1,336		2,471
2021	2021	32		429		461		32		467		499		2021	257		211		468		254		208		462
2020	2020	—		140		140		35		160		195		2020	—		88		88		—		98		98
2019	2019	43		753		796		43		819		862		2019	60		418		478		60		486		546
2018		268		415		683		297		703		1,000
Prior	Prior	144		946		1,090		144		996		1,140		Prior	212		1,100		1,312		215		1,126		1,341
Total	Total	$	8,271	$	21,625	$	29,896	$	8,154	$	23,317	$	31,471	Total	$	11,913	$	25,274	$	37,187	$	11,109	$	24,497	$	35,606


	At March 31, 2023						At December 31, 2022
	Commercial Real Estate
$ in millions	IG		NIG		Total		IG		NIG		Total
Revolving	$	—	$	175	$	175	$	—	$	204	$	204
2023	—		297		297
2022	388		2,067		2,455		379		2,201		2,580
2021	310		1,554		1,864		239		1,609		1,848
2020	—		739		739		—		728		728
2019	559		1,218		1,777		659		1,152		1,811
Prior	185		1,109		1,294		211		1,133		1,344
Total	$	1,442	$	7,159	$	8,601	$	1,488	$	7,027	$	8,515


	At March 31, 2023
	Residential Real Estate
	by FICO Scores						by LTV Ratio				Total
$ in millions	≥ 740		680-739		≤ 679		≤ 80%		> 80%
Revolving	$	85	$	30	$	5	$	120	$	—	$	120
2023	1,365		293		72		1,514		216		1,730
2022	11,347		2,503		407		13,123		1,134		14,257
2021	11,486		2,467		254		13,240		967		14,207
2020	7,198		1,489		112		8,349		450		8,799
2019	4,151		929		137		4,899		318		5,217
Prior	8,280		2,448		342		10,200		870		11,070
Total	$	43,912	$	10,159	$	1,329	$	51,445	$	3,955	$	55,400


	At December 31, 2022
	Residential Real Estate
	by FICO Scores						by LTV Ratio				Total
$ in millions	≥ 740		680-739		≤ 679		≤ 80%		> 80%
Revolving	$	90	$	29	$	5	$	124	$	—	$	124
2022	11,481		2,533		411		13,276		1,149		14,425
2021	11,604		2,492		257		13,378		975		14,353
2020	7,292		1,501		115		8,452		456		8,908
2019	4,208		946		137		4,968		323		5,291
2018	1,635		447		52		1,965		169		2,134
Prior	6,853		2,072		300		8,492		733		9,225
Total	$	43,163	$	10,020	$	1,277	$	50,655	$	3,805	$	54,460


March ~~2022~~2023 Form 10-Q			5052


Table of Contents
Notes to Consolidated Financial Statements (Unaudited)


		At March 31, 2022						At December 31, 2021							At March 31, 2023
		Commercial Real Estate													Securities-based Lending1		Other2
$ in millions	$ in millions	IG		NIG		Total		IG		NIG		Total		$ in millions			IG		NIG		Total
Revolving	Revolving	$	4	$	83	$	87	$	3	$	149	$	152	Revolving	$	73,763	$	5,988	$	1,089	$	80,840
2023														2023	468		138		148		754
2022	2022	122		1,020		1,142								2022	1,514		1,115		729		3,358
2021	2021	457		1,490		1,947		423		1,292		1,715		2021	701		481		295		1,477
2020	2020	92		812		904		91		819		910		2020	—		579		376		955
2019	2019	1,182		936		2,118		976		1,266		2,242		2019	16		970		545		1,531
2018		603		325		928		527		416		943
Prior	Prior	188		962		1,150		189		1,076		1,265		Prior	202		1,706		1,074		2,982
Total	Total	$	2,648	$	5,628	$	8,276	$	2,209	$	5,018	$	7,227	Total	$	76,664	$	10,977	$	4,256	$	91,897

At March 31, 2022
Residential Real Estate
by FICO Scores by LTV Ratio Total
$ in millions ≥ 740 680-739 ≤ 679 ≤ 80% > 80%
Revolving $ 64 $ 24 $ 4 $ 92 $ — $ 92
2022 3,468 733 93 3,980 314 4,294
2021 12,115 2,623 263 13,996 1,005 15,001
2020 7,711 1,592 130 8,935 498 9,433
2019 4,520 1,039 143 5,351 351 5,702
2018 1,775 481 53 2,130 179 2,309
Prior 7,701 2,345 359 9,535 870 10,405
Total $ 37,354 $ 8,837 $ 1,045 $ 44,019 $ 3,217 $ 47,236

At December 31, 2021
Residential Real Estate
by FICO Scores by LTV Ratio Total
$ in millions ≥ 740 680-739 ≤ 679 ≤ 80% > 80%
Revolving $ 65 $ 27 $ 4 $ 96 $ — $ 96
2021 12,230 2,638 257 14,116 1,009 15,125
2020 7,941 1,648 131 9,210 510 9,720
2019 4,690 1,072 140 5,536 366 5,902
2018 1,865 497 55 2,231 186 2,417
2017 2,157 558 65 2,588 192 2,780
Prior 5,973 1,919 319 7,485 726 8,211
Total $ 34,921 $ 8,359 $ 971 $ 41,262 $ 2,989 $ 44,251

At March 31, 2022
Securities-based Lending1
Other2
$ in millions IG NIG Total
Revolving $ 75,570 $ 6,105 $ 988 $ 82,663
2022 720 477 85 1,282
2021 800 565 152 1,517
2020 — 596 657 1,253
2019 19 994 602 1,615
2018 213 273 288 774
Prior 16 1,682 611 2,309
Total $ 77,338 $ 10,692 $ 3,383 $ 91,413


		December 31, 2021									December 31, 2022
		Securities-based Lending1		Other2							Securities-based Lending1		Other2
$ in millions	$ in millions			IG		NIG		Total		$ in millions			IG		NIG		Total
Revolving	Revolving	$	71,485	$	6,170	$	858	$	78,513	Revolving	$	77,115	$	5,760	$	1,480	$	84,355
2022										2022	1,425		1,572		269		3,266
2021	2021	807		708		103		1,618		2021	725		525		223		1,473
2020	2020	—		651		626		1,277		2020	—		580		418		998
2019	2019	19		1,079		633		1,731		2019	16		913		644		1,573
2018	2018	232		273		375		880		2018	202		268		304		774
2017		—		531		217		748
Prior	Prior	16		1,294		363		1,673		Prior	—		1,581		646		2,227
Total	Total	$	72,559	$	10,706	$	3,175	$	86,440	Total	$	79,483	$	11,199	$	3,984	$	94,666

IG—Investment Grade

NIG—Non-investment Grade

1. Securities-based loans are subject to collateral maintenance provisions, and at March 31, ~~2022~~2023 and December 31, ~~2021,~~2022, these loans are predominantly over-collateralized. For more information on the ACL methodology related to securities-based loans, see Note 2 to the financial statements in the ~~2021~~2022 Form 10-K.

2. Other loans primarily include certain loans originated in the tailored lending business within the Wealth Management business segment.

Past Due Loans Held for Investment before Allowance1


$ in millions	$ in millions	At March 31, 2022	At December 31, 2021	$ in millions	At March 31, 2023		At December 31, 2022

Corporate				Corporate	$	46	$	112
Secured lending facilities				Secured lending facilities	80		85

Residential real estate	Residential real estate	191	209	Residential real estate	126		158

Securities-based lending and Other loans				Securities-based lending and Other loans	19		1
Total				Total	$	271	$	356

1.The majority of the amounts are past due for a period of ~~less~~greater than 90 days.

Nonaccrual Loans Held for Investment before Allowance


$ in millions	$ in millions	At March 31, 2022		At December 31, 2021		$ in millions	At March 31, 2023		At December 31, 2022
Corporate	Corporate	$	77	$	34	Corporate	$	177	$	71
Secured lending facilities	Secured lending facilities	110		375		Secured lending facilities	89		94
Commercial real estate	Commercial real estate	287		195		Commercial real estate	353		209
Residential real estate	Residential real estate	119		138		Residential real estate	125		118
Securities-based lending and Other loans	Securities-based lending and Other loans	142		151		Securities-based lending and Other loans	66		10
Total1	Total1	$	735	$	893	Total1	$	810	$	502
Nonaccrual loans without an ACL	Nonaccrual loans without an ACL	$	112	$	356	Nonaccrual loans without an ACL	$	140	$	117

1.Includes all loans held for investment that are 90 days or more past due as of March 31, ~~2022~~2023 and December 31, ~~2021.~~2022.

See Note 2 to the financial statements in the ~~2021~~2022 Form 10-K for a description of the ACL calculated under the CECL methodology, including credit quality indicators, used for HFI loans.

The Firm may modify the terms of certain loans for economic or legal reasons related to a borrower's financial difficulties, and these modifications include interest rate reductions,

principal forgiveness, term extensions and other-than-insignificant payment delays or a combination of these aforementioned modifications. Modified loans are typically evaluated individually for allowance for credit losses. As of March 31, 2023, there were no loans held for investment modified in the current quarter with subsequent default or past due.

Modified Loans Held for Investment1


	At March 31, 20232
$ in millions	Amortized Cost		% of Total Loans3














	Term Extension
Corporate	$	17	0.2	%

Commercial real estate	62		0.7	%
Residential real estate	1		—	%

Total	$	80
	Other-than-insignificant Payment Delay


Commercial real estate	$	67	0.8	%

1.Lending commitments to borrowers for which the Firm has modified terms of the receivable are $607 million as of March 31, 2023.

2.Loans held for investment that were modified during the current quarter.

3.Percentage of total loans represents the percentage of modified loans to total loans held for investment by loan type.

Financial Impact on Modified Loans Held for Investment


			At March 31, 2023












			Term Extension
Corporate			Added a weighted-average 8 months to the life of modified loans.

Commercial real estate			Added a weighted-average 2 months to the life of modified loans.
Residential real estate			Added 4 months to the life of the modified loan.

			Other-than-insignificant Payment Delay


Commercial real estate			Provided a forbearance period of 8 months to the borrower of the modified loan.

Troubled Debt Restructurings

$ in millions At March 31, 2022 At December 31, 2021
Loans, before ACL $ 30 $ 49
Allowance for credit losses — 8


$ in millions	At December 31, 2022
Loans, before ACL	$	29

Allowance for credit losses	—

~~Troubled debt restructurings typically include~~TDRs included modifications of interest rates, collateral requirements, other loan covenants and payment extensions. See Note 2 to the financial statements in the ~~2021~~2022 Form 10-K for further information on ~~TDR~~TDRs guidance. The accounting guidance ~~issued~~for TDRs was eliminated for the Firm, beginning on January 1, 2023. See Note 2 for further information herein.

Gross Charge-offs by ~~Congress in the CARES Act as well as by the U.S. banking agencies.~~Origination Year


	Three Months Ended March 31, 2023
$ in millions	Corporate		Secured Lending Facilities		CRE		Residential Real Estate		SBL and Other		Total
Revolving	$	(1)	$	—	$	—	$	—	$	—	$	(1)





2019	—		—		(29)		—		(1)		(30)
Prior	—		—		(40)		—		—		(40)
Total	$	(1)	$	—	$	(69)	$	—	$	(1)	$	(71)


			5153			March ~~2022~~2023 Form 10-Q


Table of Contents
Notes to Consolidated Financial Statements (Unaudited)

Allowance for Credit Losses Rollforward and Allocation—Loans


$ in millions	$ in millions	Corporate			Secured Lending Facilities			CRE			Residential Real Estate			SBL and Other			Total			$ in millions	Corporate			Secured Lending Facilities			CRE			Residential Real Estate			SBL and Other			Total
December 31, 2021		$	165		$	163		$	206		$	60		$	60		$	654
December 31, 2022																				December 31, 2022	$	235		$	153		$	275		$	87		$	89		$	839
Gross charge-offs	Gross charge-offs	—			(3)			(7)			—			(1)			(11)			Gross charge-offs	(1)			—			(69)			—			(1)			(71)

Provision (release)	Provision (release)	6			12			6			13			2			39			Provision (release)	31			—			129			26			15			201
Other	Other	(1)			—			(2)			—			—			(3)			Other	—			(1)			—			—			2			1
March 31, 2022		$	170		$	172		$	203		$	73		$	61		$	679
March 31, 2023																				March 31, 2023	$	265		$	152		$	335		$	113		$	105		$	970
Percent of loans to total loans1	Percent of loans to total loans1	3		%	16		%	5		%	26		%	50		%	100		%	Percent of loans to total loans1	4		%	18		%	4		%	28		%	46		%	100		%


$ in millions	$ in millions	Corporate			Secured Lending Facilities			CRE			Residential Real Estate			SBL and Other			Total			$ in millions	Corporate			Secured Lending Facilities			CRE			Residential Real Estate			SBL and Other			Total
December 31, 2020		$	309		$	198		$	211		$	59		$	58		$	835
December 31, 2021																				December 31, 2021	$	165		$	163		$	206		$	60		$	60		$	654
Gross charge-offs	Gross charge-offs	(1)			—			(9)			—			—			(10)			Gross charge-offs	—			(3)			(7)			—			(1)			(11)

Provision (release)	Provision (release)	(56)			(3)			5			(5)			1			(58)			Provision (release)	6			12			6			13			2			39
Other	Other	(2)			(2)			(1)			—			—			(5)			Other	(1)			—			(2)			—			—			(3)
March 31, 2021		$	250		$	193		$	206		$	54		$	59		$	762
March 31, 2022																				March 31, 2022	$	170		$	172		$	203		$	73		$	61		$	679
Percent of loans to total loans1	Percent of loans to total loans1	4		%	18		%	5		%	25		%	48		%	100		%	Percent of loans to total loans1	3		%	16		%	5		%	26		%	50		%	100		%

CRE—Commercial real estate

SBL—Securities-based lending

1.Percent of loans to total loans represents loans held for investment by loan type to total loans held for investment.

Allowance for Credit Losses Rollforward—Lending Commitments


$ in millions	$ in millions	Corporate		Secured Lending Facilities		CRE		Residential Real Estate		SBL and Other		Total		$ in millions	Corporate		Secured Lending Facilities		CRE		Residential Real Estate		SBL and Other		Total
December 31, 2021		$	356	$	41	$	20	$	1	$	26	$	444
December 31, 2022														December 31, 2022	$	411	$	51	$	15	$	4	$	23	$	504
Provision (release)	Provision (release)	20		8		(7)		—		(3)		18		Provision (release)	22		—		7		1		3		33
Other	Other	(3)		—		—		—		—		(3)		Other	2		—		—		—		—		2
March 31, 2022		$	373	$	49	$	13	$	1	$	23	$	459
March 31, 2023														March 31, 2023	$	435	$	51	$	22	$	5	$	26	$	539


$ in millions	$ in millions	Corporate		Secured Lending Facilities		CRE		Residential Real Estate		SBL and Other		Total		$ in millions	Corporate		Secured Lending Facilities		CRE		Residential Real Estate		SBL and Other		Total
December 31, 2020		$	323	$	38	$	11	$	1	$	23	$	396
December 31, 2021														December 31, 2021	$	356	$	41	$	20	$	1	$	26	$	444
Provision (release)	Provision (release)	(33)		(4)		(2)		—		(1)		(40)		Provision (release)	20		8		(7)		—		(3)		18
Other	Other	(1)		1		(1)		—		(1)		(2)		Other	(3)		—		—		—		—		(3)
March 31, 2021		$	289	$	35	$	8	$	1	$	21	$	354
March 31, 2022														March 31, 2022	$	373	$	49	$	13	$	1	$	23	$	459

The ~~aggregate~~ allowance for credit losses for loans and lending commitments increased in the current quarter, reflecting deterioration in both the ~~Provision for credit losses primarily due to portfolio growth.The~~macroeconomic outlook and our expectations of commercial real estate borrowers. The base scenario used in our ACL models as of March 31, ~~2022~~2023 was generated using a combination of ~~industry~~ consensus economic forecasts, forward rates, and internally developed and validated models, and assumes ~~continued growth over the forecast period.~~an economic contraction in 2023, followed by a recovery in 2024. Given the nature of our lending portfolio, the most sensitive model input is U.S. gross domestic ~~product.~~product (“GDP”). For a further discussion of the Firm’s loans as well as the Firm’s allowance methodology, refer to Notes 2 and 10 to the financial statements in the ~~2021~~2022 Form 10-K.

Selected Credit Ratios

At
March 31,
2022 At
December 31,
2021
ACL to total loans1
0.4 % 0.4 %
Nonaccrual loans to total loans2
0.4 % 0.5 %
ACL to nonaccrual loans3
92.4 % 73.2 %


	At March 31, 2023		At December 31, 2022
ACL for loans to total HFI loans	0.5	%	0.4	%
Nonaccrual HFI loans to total HFI loans1	0.4	%	0.3	%
ACL for loans to nonaccrual HFI loans	119.8	%	167.1	%

1.~~Allowance~~These loans are on nonaccrual status because the loans were past due for ~~credit losses for loans to total loans held for investment.~~

2.~~Nonaccrual loans held for investment, which are loans that are~~a period of 90 days or more ~~past due, to total loans held for investment.~~

3.~~Allowance for credit losses for loans to nonaccrual loans held for investment.~~or payment of principal or interest was in doubt.

Employee Loans


$ in millions	$ in millions	At March 31, 2022		At December 31, 2021		$ in millions	At March 31, 2023		At December 31, 2022
Currently employed by the Firm1	Currently employed by the Firm1	$	3,759	$	3,613	Currently employed by the Firm1	$	4,065	$	4,023
No longer employed by the Firm2	No longer employed by the Firm2	105		$	113	No longer employed by the Firm2	105		97
Employee loans	Employee loans	$	3,864	$	3,726	Employee loans	$	4,170	$	4,120
ACL	ACL	(146)		(153)		ACL	(138)		(139)
Employee loans, net of ACL	Employee loans, net of ACL	$	3,718	$	3,573	Employee loans, net of ACL	$	4,032	$	3,981
Remaining repayment term, weighted average in years	Remaining repayment term, weighted average in years	5.7		5.7		Remaining repayment term, weighted average in years	5.8		5.8

1.These loans are predominantly ~~current as of March 31, 2022 and December 31, 2021.~~current.

2.These loans are predominantly past due for a period of 90 days or ~~more as of March 31, 2022 and December 31, 2021.~~more.

Employee loans are granted in conjunction with a program established primarily to recruit certain Wealth Management ~~representatives,~~financial advisors, are full recourse and generally require periodic repayments, and are due in full upon termination of employment with the Firm. These loans are recorded in Customer and other receivables in the balance sheet. See Note 2 to the financial statements in the ~~2021~~2022 Form 10-K for a description of the CECL allowance methodology, including credit quality indicators, for employee loans.

10. Other Assets—Equity Method Investments

Equity Method Investments


$ in millions	$ in millions	At March 31, 2022		At December 31, 2021		$ in millions	At March 31, 2023		At December 31, 2022
Investments	Investments	$	2,138	$	2,214	Investments	$	1,962	$	1,927


		Three Months Ended March 31,					Three Months Ended March 31,
$ in millions	$ in millions	2022		2021		$ in millions		2023		2022
Income (loss)	Income (loss)	$	6	$	(24)	Income (loss)		$	25	$	6

Equity method investments, other than investments in certain fund interests, are summarized above and are included in Other assets in the balance sheet with related income or loss included in Other revenues in the income statement. See “Net Asset Value Measurements—Fund Interests” in Note 4 for the carrying value of certain of the Firm’s fund interests, which are composed of general and limited partnership interests, as well as any related carried interest.

Japanese Securities Joint Venture


	Three Months Ended March 31,
$ in millions		2023		2022
Income (loss) from investment in MUMSS		$	29	$	4


March ~~2022~~2023 Form 10-Q			5254


Table of Contents
Notes to Consolidated Financial Statements (Unaudited)

~~Japanese Securities Joint Venture~~

Three Months Ended
March 31,
$ in millions 2022 2021
Income (loss) from investment in MUMSS $ 4 $ 32

For more information on ~~Mitsubishi UFJ Morgan Stanley Securities Co., Ltd. (“MUMSS”)~~MUMSS and other relationships with ~~Mitsubishi UFJ Financial Group, Inc.,~~MUFG, see Note 12 to the financial statements in the ~~2021~~2022 Form 10-K.

11. Deposits

Deposits


$ in millions	$ in millions	At March 31, 2022		At December 31, 2021		$ in millions	At March 31, 2023		At December 31, 2022
Savings and demand deposits	Savings and demand deposits	$	348,651	$	332,747	Savings and demand deposits	$	298,330	$	319,948
Time deposits	Time deposits	12,189		14,827		Time deposits	49,193		36,698
Total	Total	$	360,840	$	347,574	Total	$	347,523	$	356,646
Deposits subject to FDIC insurance	Deposits subject to FDIC insurance	$	234,779	$	230,894	Deposits subject to FDIC insurance	$	263,420	$	260,420
Deposits not subject to FDIC insurance	Deposits not subject to FDIC insurance	$	126,061	$	116,680	Deposits not subject to FDIC insurance	$	84,103	$	96,226

Time Deposit Maturities

$ in millions At
March 31,
2022
2022 $ 3,423
2023 4,187
2024 2,796
2025 882
2026 306
Thereafter 595
Total $ 12,189


$ in millions	At March 31, 2023
2023	$	22,647
2024	15,815
2025	5,204
2026	1,982
2027	1,847
Thereafter	1,698
Total	$	49,193

12. Borrowings and Other Secured Financings

Borrowings


$ in millions	$ in millions	At March 31, 2022		At December 31, 2021		$ in millions	At March 31, 2023		At December 31, 2022
Original maturities of one year or less	Original maturities of one year or less	$	4,146	$	5,764	Original maturities of one year or less	$	4,587	$	4,191
Original maturities greater than one year	Original maturities greater than one year					Original maturities greater than one year
Senior	Senior	$	212,687	$	213,776	Senior	$	231,205	$	221,667
Subordinated	Subordinated	12,984		13,587		Subordinated	14,390		12,200
Total	Total	$	225,671	$	227,363	Total	$	245,595	$	233,867
Total borrowings	Total borrowings	$	229,817	$	233,127	Total borrowings	$	250,182	$	238,058
Weighted average stated maturity, in years1	Weighted average stated maturity, in years1	7.3		7.7		Weighted average stated maturity, in years1	6.7		6.7

1.Only includes borrowings ~~wit~~hwith original maturities greater than one year.

Other Secured Financings


$ in millions	$ in millions	At March 31, 2022		At December 31, 2021		$ in millions	At March 31, 2023		At December 31, 2022
Original maturities:	Original maturities:					Original maturities:
One year or less	One year or less	$	3,778	$	4,573	One year or less	$	980	$	944
Greater than one year	Greater than one year	5,030		5,468		Greater than one year	7,690		7,214
Total	Total	$	8,808	$	10,041	Total	$	8,670	$	8,158
Transfers of assets accounted for as secured financings	Transfers of assets accounted for as secured financings	$	1,071	$	1,556	Transfers of assets accounted for as secured financings	$	1,138	$	1,119

O~~ther~~Other secured financings include the liabilities related to collateralized notes, transfers of financial assets that are accounted for as financings rather than sales and consolidated VIEs where the Firm is deemed to be the primary beneficiary. These liabilities are generally payable from the cash flows of the related assets accounted for as Trading assets. See Note 14 for further information on other secured financings related to VIEs and securitization activities.

For transfers of assets that fail to meet accounting criteria for a sale, the Firm continues to record the assets and recognizes the associated liabilities in the balance sheet.

13. Commitments, Guarantees and Contingencies

Commitments


		Years to Maturity at March 31, 2022											Years to Maturity at March 31, 2023
$ in millions	$ in millions	Less than 1		1-3		3-5		Over 5		Total		$ in millions	Less than 1		1-3		3-5		Over 5		Total
Lending:	Lending:											Lending:
Corporate	Corporate	$	14,186	$	36,316	$	50,242	$	6,200	$	106,944	Corporate	$	16,630	$	26,698	$	57,883	$	1,819	$	103,030
Secured lending facilities	Secured lending facilities	6,524		7,576		3,640		553		18,293		Secured lending facilities	7,379		5,943		2,884		1,027		17,233
Commercial and Residential real estate	Commercial and Residential real estate	412		813		26		259		1,510		Commercial and Residential real estate	171		201		19		336		727
Securities-based lending and Other	Securities-based lending and Other	11,447		3,380		506		412		15,745		Securities-based lending and Other	13,175		4,995		414		522		19,106
Forward-starting secured financing receivables		61,272		—		—		—		61,272
Forward-starting secured financing receivables1												Forward-starting secured financing receivables1	70,011		—		—		—		70,011
Central counterparty	Central counterparty	300		—		—		4,772		5,072		Central counterparty	300		—		—		7,255		7,555
Underwriting	Underwriting	40		3,150		—		—		3,190		Underwriting	300		—		—		—		300
Investment activities	Investment activities	1,157		176		52		380		1,765		Investment activities	1,313		290		118		356		2,077
Letters of credit and other financial guarantees	Letters of credit and other financial guarantees	129		—		—		3		132		Letters of credit and other financial guarantees	107		35		—		8		150
Total	Total	$	95,467	$	51,411	$	54,466	$	12,579	$	213,923	Total	$	109,386	$	38,162	$	61,318	$	11,323	$	220,189
Lending commitments participated to third parties	Lending commitments participated to third parties									$	7,963	Lending commitments participated to third parties									$	7,509
Forward-starting secured financing receivables settled within three business days										$	51,192

1.Forward-starting secured financing receivables are generally settled within three business days.

Since commitments associated with these instruments may expire unused, the amounts shown do not necessarily reflect the actual future cash funding requirements.

For a further description of these commitments, refer to Note 15 to the financial statements in the ~~2021~~2022 Form 10-K.


			53			~~March 2022 Form 10-Q~~


~~Table of Contents~~
Notes to Consolidated Financial Statements (Unaudited)

Guarantees


		At March 31, 2022										At March 31, 2023
		Maximum Potential Payout/Notional of Obligations by Years to Maturity								Carrying Amount Asset (Liability)				Maximum Potential Payout/Notional of Obligations by Years to Maturity								Carrying Amount Asset (Liability)
$ in millions	$ in millions	Less than 1		1-3		3-5		Over 5					$ in millions	Less than 1		1-3		3-5		Over 5
Non-credit derivatives1	Non-credit derivatives1	$	1,316,262	$	914,129	$	322,125	$	821,128	$	(67,840)		Non-credit derivatives1	$	1,418,449	$	1,132,093	$	347,086	$	692,818	$	(60,437)
Standby letters of credit and other financial guarantees issued2	Standby letters of credit and other financial guarantees issued2	1,441		1,079		1,124		2,686		29			Standby letters of credit and other financial guarantees issued2	1,634		635		1,389		2,676		(6)
Market value guarantees	Market value guarantees	89		2		—		—		—			Market value guarantees	2		—		—		—		—
Liquidity facilities	Liquidity facilities	4,382		—		—		—		4			Liquidity facilities	2,593		—		—		—		(2)
Whole loan sales guarantees	Whole loan sales guarantees	—		2		85		23,095		—			Whole loan sales guarantees	—		52		34		23,079		—
Securitization representations and warranties3	Securitization representations and warranties3	—		—		—		79,059		(42)			Securitization representations and warranties3	—		—		—		78,695		(3)
General partner guarantees	General partner guarantees	348		12		32		152		(79)			General partner guarantees	364		30		143		37		(87)
Client clearing guarantees	Client clearing guarantees	150		—		—		—		—			Client clearing guarantees	45		—		—		—		—

1.The carrying amounts of derivative contracts that meet the accounting definition of a guarantee are shown on a gross basis. For further information on derivatives contracts, see Note 6.

2.These amounts include certain issued standby letters of credit participated to third parties, totaling ~~$0.8~~$0.6 billion of notional and collateral/recourse, due to the nature of the Firm’s obligations under these arrangements. As of March 31, ~~2022,~~2023, the carrying amount of standby letters of credit and other financial guarantees issued includes an allowance for credit losses of ~~$78~~$77 million.

3.Related to commercial and residential mortgage securitizations.


			55			March 2023 Form 10-Q


Table of Contents
Notes to Consolidated Financial Statements (Unaudited)

The Firm has obligations under certain guarantee arrangements, including contracts and indemnification agreements, that contingently require the Firm to make payments to the guaranteed party based on changes in an underlying measure (such as an interest or foreign exchange rate, security or commodity price, an index, or the occurrence or non-occurrence of a specified event) related to an asset, liability or equity security of a guaranteed party. Also included as guarantees are contracts that contingently require the Firm to make payments to the guaranteed party based on another entity’s failure to perform under an agreement, as well as indirect guarantees of the indebtedness of others.

For more information on the nature of the obligations and related business activities for our guarantees, see Note 15 to the financial statements in the ~~2021~~2022 Form 10-K.

Other Guarantees and Indemnities

In the normal course of business, the Firm provides guarantees and indemnifications in a variety of transactions. These provisions generally are standard contractual terms. Certain of these guarantees and indemnifications related to indemnities, exchange and clearinghouse member guarantees and merger and acquisition guarantees are described in Note 15 to the financial statements in the ~~2021~~2022 Form 10-K.

In addition, in the ordinary course of business, the Firm guarantees the debt and/or certain trading obligations (including obligations associated with derivatives, foreign exchange contracts and the settlement of physical commodities) of certain subsidiaries. These guarantees generally are entity or product specific and are required by investors or trading counterparties. The activities of the Firm’s subsidiaries covered by these guarantees (including

any related debt or trading obligations) are included in the financial statements.

Finance Subsidiary

The Parent Company fully and unconditionally guarantees the securities issued by Morgan Stanley Finance LLC, a wholly owned finance subsidiary. No other subsidiary of the Parent Company guarantees these securities.

Contingencies

Legal

In addition to the ~~matter~~matters described below, in the normal course of business, the Firm has been named, from time to time, as a defendant in various legal actions, including arbitrations, class actions and other litigation, arising in connection with its activities as a global diversified financial services institution. Certain of the actual or threatened legal actions include claims for substantial compensatory and/or punitive damages or claims for indeterminate amounts of damages. In some cases, the entities that would otherwise be the primary defendants in such cases are bankrupt or are in

financial distress. These actions have included, but are not limited to, antitrust claims, claims under various false claims act ~~residential mortgage~~statutes, and ~~credit crisis-related matters.~~matters arising from our sales and trading businesses, and our activities in the capital markets.

The Firm is also involved, from time to time, in other reviews, investigations and proceedings (both formal and informal) by governmental and self-regulatory agencies regarding the Firm’s business, and involving, among other matters, sales, trading, financing, prime brokerage, market-making activities, investment banking advisory services, capital market activities, financial products or offerings sponsored, underwritten or sold by the Firm, wealth and investment management services, and accounting and operational matters, certain of which may result in adverse judgments, settlements, fines, penalties, injunctions, limitations on our ability to conduct certain business, or other relief.

While the Firm has identified below any individual proceedings or investigations where the Firm believes a material loss to be reasonably possible and reasonably estimable, there can be no assurance that material losses will not be incurred from claims that have not yet been asserted or those where potential losses have not yet been determined to be probable or possible and reasonably estimable.

The Firm contests liability and/or the amount of damages as appropriate in each pending matter. Where available information indicates that it is probable a liability had been incurred at the date of the financial statements and the Firm can reasonably estimate the amount of that loss, the Firm accrues the estimated loss by a charge to income.


	Three Months Ended March 31,
$ in millions		2023		2022
Legal expenses		$	151	$	84

The Firm’s legal expenses can, and may in the future, fluctuate from period to period, given the current environment regarding government investigations and private litigation affecting global financial services firms, including the Firm.

In many proceedings and investigations, however, it is inherently difficult to determine whether any loss is probable or even possible or to estimate the amount of any loss. In addition, even where a loss is possible or an exposure to loss exists in excess of the liability already accrued with respect to a previously recognized loss contingency, it is not always possible to reasonably estimate the size of the possible loss or range of loss, particularly for proceedings and investigations where the factual record is being developed or contested or where plaintiffs or government entities seek substantial or indeterminate damages, restitution, disgorgement or penalties. Numerous issues may need to be resolved before a loss or additional loss, or range of loss or additional range of loss, can be reasonably estimated for a proceeding or investigation, including through potentially lengthy discovery and determination of important factual matters, determination of ~~issues related to class certification and the calculation of damages or other relief, and consideration of novel or unsettled legal questions relevant to the proceedings or investigations in question.~~

~~For certain other legal proceedings and investigations, the Firm can estimate reasonably possible losses, additional~~


March ~~2022~~2023 Form 10-Q			5456


Table of Contents
Notes to Consolidated Financial Statements (Unaudited)

issues related to class certification and the calculation of damages or other relief, and consideration of novel or unsettled legal questions relevant to the proceedings or investigations in question.

For certain other legal proceedings and investigations, the Firm can estimate reasonably possible losses, additional losses, ranges of loss or ranges of additional loss in excess of amounts accrued but does not believe, based on current knowledge and after consultation with counsel, that such losses could have a material adverse effect on the Firm’s financial statements as a whole, other than the matter referred to in the following paragraph.

Tax

In matters styled Case number 15/3637 and Case number 15/4353, the Dutch Tax Authority (“Dutch Authority”) is challenging in the Dutch courts the prior set-off by the Firm of approximately €124 million (approximately ~~$137~~$135 million) plus accrued interest of withholding tax credits against the Firm’s corporation tax liabilities for the tax years 2007 to 2012. The Dutch Authority alleges that the Firm was not entitled to receive the withholding tax credits on the basis, inter alia, that a Firm subsidiary did not hold legal title to certain securities subject to withholding tax on the relevant dates. The Dutch Authority has also alleged that the Firm failed to provide certain information to the Dutch Authority and to keep adequate books and records. On April 26, 2018, the District Court in Amsterdam issued a decision dismissing the Dutch Authority’s claims with respect to certain of the tax years in dispute. On May 12, 2020, the Court of Appeal in Amsterdam granted the Dutch Authority’s appeal in matters re-styled Case number 18/00318 and Case number 18/00319. On June 22, 2020, the Firm filed an appeal against the decision of the Court of Appeal in Amsterdam before the Dutch High Court. On January 29, 2021, the Advocate General of the Dutch High Court issued an advisory opinion on the Firm’s appeal, which rejected the Firm’s principal grounds of appeal. On February 11, 2021, the Firm and the Dutch Authority each responded to this ~~opinio~~n.opinion. On June 22, 2021, Dutch criminal authorities sought various documents in connection with an investigation of the Firm related to the civil claims asserted by the Dutch Authority concerning the accuracy of the Firm subsidiary’s tax returns and the maintenance of its books and records for 2007 to 2012. The Dutch criminal authorities have requested additional information, and the Firm is continuing to respond to them in connection with their ongoing investigation.

For certain other legal proceedings and investigations including the following matter, the Firm can estimate probable losses but does not believe, based on current knowledge and after consultation with counsel, that additional loss in excess of amounts accrued could have a material adverse effect on the Firm’s financial statements as a whole.

Antitrust Related Matter

In August of 2017, the Firm was named as a defendant in a purported antitrust class action in the United States District Court for the SDNY styled Iowa Public Employees’ Retirement System et al. v. Bank of America Corporation et al. Plaintiffs allege, inter alia, that the Firm, together with a number of other financial institution defendants, violated U.S. antitrust laws and New York state law in connection with their alleged efforts to prevent the development of electronic exchange-based platforms for securities lending. The class action complaint was filed on behalf of a purported class of borrowers and lenders who entered into stock loan transactions with the defendants. The class action complaint seeks, among other relief, certification of the class of plaintiffs and treble damages. On September 27, 2018, the court denied the defendants’ motion to dismiss the class action complaint. Plaintiffs’ motion for class certification was referred by the District Court to a magistrate judge who, on June 30, 2022, issued a report and recommendation that the District Court certify a class. The motion for class certification and the parties’ objections to the report and recommendation are pending before the District Court.

14. Variable Interest Entities and Securitization Activities

Consolidated VIE Assets and Liabilities by Type of Activity


		At March 31, 2022				At December 31, 2021					At March 31, 2023				At December 31, 2022
$ in millions	$ in millions	VIE Assets		VIE Liabilities		VIE Assets		VIE Liabilities		$ in millions	VIE Assets		VIE Liabilities		VIE Assets		VIE Liabilities
MABS1	MABS1	$	1,272	$	383	$	1,177	$	409	MABS1	$	944	$	659	$	1,153	$	520
Investment vehicles2	Investment vehicles2	813		429		717		294		Investment vehicles2	634		272		638		272
Operating entities		509		37		508		39
MTOB										MTOB	664		614		371		322
Other	Other	579		288		510		286		Other	572		199		519		199
Total	Total	$	3,173	$	1,137	$	2,912	$	1,028	Total	$	2,814	$	1,744	$	2,681	$	1,313

MTOB—Municipal tender option bonds

1.Amounts include transactions backed by residential mortgage loans, commercial mortgage loans and other types of assets, including consumer or commercial assets and may be in loan or security form. 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.Amounts include investment funds and CLOs.


			57			March 2023 Form 10-Q


Table of Contents
Notes to Consolidated Financial Statements (Unaudited)

Consolidated VIE Assets and Liabilities by Balance Sheet Caption


$ in millions	$ in millions	At March 31, 2022		At December 31, 2021		$ in millions	At March 31, 2023		At December 31, 2022
Assets	Assets					Assets
Cash and cash equivalents	Cash and cash equivalents	$	334	$	341	Cash and cash equivalents	$	141	$	142

Trading assets at fair value	Trading assets at fair value	2,252		1,965		Trading assets at fair value	1,885		2,066
Investment securities	Investment securities	34		37		Investment securities	577		255
Securities purchased under agreements to resell	Securities purchased under agreements to resell	200		200		Securities purchased under agreements to resell	200		200
Customer and other receivables	Customer and other receivables	26		31		Customer and other receivables	9		16

Intangible assets		82		85

Other assets	Other assets	245		253		Other assets	2		2
Total	Total	$	3,173	$	2,912	Total	$	2,814	$	2,681
Liabilities	Liabilities					Liabilities
Other secured financings	Other secured financings	$	963	$	767	Other secured financings	$	1,618	$	1,185
Other liabilities and accrued expenses	Other liabilities and accrued expenses	174		261		Other liabilities and accrued expenses	122		124
Borrowings						Borrowings	4		4
Total	Total	$	1,137	$	1,028	Total	$	1,744	$	1,313
Noncontrolling interests	Noncontrolling interests	$	119	$	115	Noncontrolling interests	$	75	$	71

Consolidated VIE assets and liabilities are presented in the previous tables after intercompany eliminations. Generally, most assets owned by consolidated VIEs cannot be removed unilaterally by the Firm and are not available to the Firm while the related liabilities issued by consolidated VIEs are non-recourse to the Firm. However, in certain consolidated VIEs, the Firm either has the unilateral right to remove assets or provides additional recourse through derivatives such as total return swaps, guarantees or other forms of involvement.

In general, the Firm’s exposure to loss in consolidated VIEs is limited to losses that would be absorbed on the VIE net assets recognized in its financial statements, net of amounts absorbed by third-party variable interest holders.

Non-consolidated VIEs


		At March 31, 2022											At March 31, 2023
$ in millions	$ in millions	MABS1		CDO		MTOB		OSF		Other2		$ in millions	MABS1		CDO		MTOB		OSF		Other2
VIE assets (UPB)	VIE assets (UPB)	$	116,627	$	1,379	$	6,465	$	2,043	$	54,186	VIE assets (UPB)	$	132,049	$	926	$	3,688	$	2,619	$	52,661
Maximum exposure to loss3	Maximum exposure to loss3											Maximum exposure to loss3
Debt and equity interests	Debt and equity interests	$	13,005	$	157	$	—	$	1,449	$	11,055	Debt and equity interests	$	16,917	$	74	$	—	$	1,749	$	11,751
Derivative and other contracts	Derivative and other contracts	—		—		4,382		—		4,374		Derivative and other contracts	—		—		2,593		—		5,615
Commitments, guarantees and other	Commitments, guarantees and other	1,007		—		—		—		1,454		Commitments, guarantees and other	1,290		—		—		—		892
Total	Total	$	14,012	$	157	$	4,382	$	1,449	$	16,883	Total	$	18,207	$	74	$	2,593	$	1,749	$	18,258
Carrying value of variable interests—Assets	Carrying value of variable interests—Assets											Carrying value of variable interests—Assets
Debt and equity interests	Debt and equity interests	$	13,005	$	157	$	—	$	1,449	$	11,055	Debt and equity interests	$	16,917	$	74	$	—	$	1,558	$	11,751
Derivative and other contracts	Derivative and other contracts	—		—		6		—		1,642		Derivative and other contracts	—		—		3		—		1,731
Total	Total	$	13,005	$	157	$	6	$	1,449	$	12,697	Total	$	16,917	$	74	$	3	$	1,558	$	13,482
Additional VIE assets owned4	Additional VIE assets owned4									$	13,339	Additional VIE assets owned4									$	14,419
Carrying value of variable interests—Liabilities	Carrying value of variable interests—Liabilities											Carrying value of variable interests—Liabilities

Derivative and other contracts	Derivative and other contracts	$	—	$	—	$	1	$	—	$	280	Derivative and other contracts	$	—	$	—	$	5	$	—	$	306


			55			~~March 2022 Form 10-Q~~


~~Table of Contents~~
Notes to Consolidated Financial Statements (Unaudited)

At December 31, 2021
$ in millions
MABS1
CDO MTOB OSF
Other2
VIE assets (UPB) $ 146,071 $ 667 $ 6,089 $ 2,086 $ 52,111
Maximum exposure to loss3
Debt and equity interests $ 18,062 $ 129 $ — $ 1,459 $ 10,339
Derivative and other contracts — — 4,100 — 5,599
Commitments, guarantees and other 771 — — — 1,005
Total $ 18,833 $ 129 $ 4,100 $ 1,459 $ 16,943
Carrying value of variable interests–Assets
Debt and equity interests $ 18,062 $ 129 $ — $ 1,459 $ 10,339
Derivative and other contracts — — 5 — 2,006
Total $ 18,062 $ 129 $ 5 $ 1,459 $ 12,345
Additional VIE assets owned4
$ 15,392
Carrying value of variable interests—Liabilities
Derivative and other contracts $ — $ — $ — $ — $ 362

~~MTOB—Municipal tender option bonds~~


	At December 31, 2022
$ in millions	MABS1		CDO		MTOB		OSF		Other2
VIE assets (UPB)	$	123,601	$	3,162	$	4,632	$	2,403	$	50,178
Maximum exposure to loss3
Debt and equity interests	$	13,104	$	274	$	—	$	1,694	$	11,596
Derivative and other contracts	—		—		3,200		—		5,211
Commitments, guarantees and other	674		—		—		—		1,410
Total	$	13,778	$	274	$	3,200	$	1,694	$	18,217
Carrying value of variable interests–Assets
Debt and equity interests	$	13,104	$	274	$	—	$	1,577	$	11,596
Derivative and other contracts	—		—		3		—		1,564
Total	$	13,104	$	274	$	3	$	1,577	$	13,160
Additional VIE assets owned4									$	13,708
Carrying value of variable interests—Liabilities
Derivative and other contracts	$	—	$	—	$	3	$	—	$	281

1.Amounts include transactions backed by residential mortgage loans, commercial mortgage loans and other types of assets, including consumer or commercial assets, and may be in loan or security form.

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.

4.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 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 4). The Firm does not provide additional support in these transactions through contractual facilities, guarantees or similar derivatives.

The ~~majority of the VIEs included in the~~ previous tables ~~are~~include VIEs sponsored by unrelated ~~parties;~~parties, as well as VIEs sponsored by the Firm; examples of the Firm’s involvement with these VIEs include its secondary market-making activities and the securities held in its Investment securities portfolio (see Note 7).

The Firm’s maximum exposure to loss is dependent on the nature of the Firm’s variable interest in the VIE and is limited to the notional amounts of certain liquidity facilities and other credit support, total return swaps and written put options, as well as the fair value of certain other derivatives and investments the Firm has made in the VIE.

The Firm’s maximum exposure to loss in the previous tables does not include the offsetting benefit of hedges or any reductions associated with the amount of collateral held as part of a transaction with the VIE or any party to the VIE directly against a specific exposure to loss.

Liabilities issued by VIEs generally are non-recourse to the Firm.

Detail of Mortgage- and Asset-Backed Securitization Assets

At March 31, 2022 At December 31, 2021
$ in millions UPB
Debt and
Equity
Interests
UPB
Debt and
Equity
Interests
Residential mortgages $ 12,741 $ 2,164 $ 15,216 $ 2,182
Commercial mortgages 67,450 4,058 68,503 4,092
U.S. agency collateralized mortgage obligations 31,914 4,818 57,972 9,835
Other consumer or commercial loans 4,522 1,965 4,380 1,953
Total $ 116,627 $ 13,005 $ 146,071 $ 18,062

~~Transferred Assets with Continuing Involvement~~

At March 31, 2022
$ in millions RML CML
U.S. Agency
CMO
CLN and
Other1
SPE assets (UPB)2
$ 8,677 $ 101,928 $ 33,602 $ 12,574
Retained interests
Investment grade $ 96 $ 754 $ 363 $ —
Non-investment grade 26 576 — 57
Total $ 122 $ 1,330 $ 363 $ 57
Interests purchased in the secondary market
Investment grade $ 55 $ 65 $ 134 $ 4
Non-investment grade 44 49 — 2
Total $ 99 $ 114 $ 134 $ 6
Derivative assets $ — $ — $ — $ 1,050
Derivative liabilities — — — 185

At December 31, 2021
$ in millions RML CML
U.S. Agency
CMO
CLN and
Other1
SPE assets (UPB)2
$ 6,802 $ 94,276 $ 28,697 $ 13,121
Retained interests
Investment grade $ 72 $ 638 $ 465 $ —
Non-investment grade 19 586 — 69
Total $ 91 $ 1,224 $ 465 $ 69
Interests purchased in the secondary market
Investment grade $ 18 $ 118 $ 33 $ —
Non-investment grade 38 53 — 4
Total $ 56 $ 171 $ 33 $ 4
Derivative assets $ — $ — $ — $ 891
Derivative liabilities — — — 284

Fair Value At March 31, 2022
$ in millions Level 2 Level 3 Total
Retained interests
Investment grade $ 461 $ — $ 461
Non-investment grade 11 45 56
Total $ 472 $ 45 $ 517
Interests purchased in the secondary market
Investment grade $ 250 $ 8 $ 258
Non-investment grade 60 35 95
Total $ 310 $ 43 $ 353
Derivative assets $ 1,050 $ — $ 1,050
Derivative liabilities 140 45 185


	At March 31, 2023				At December 31, 2022
$ in millions	UPB		Debt and Equity Interests		UPB		Debt and Equity Interests
Residential mortgages	$	16,999	$	2,441	$	20,428	$	2,570
Commercial mortgages	69,821		4,594		67,540		4,236
U.S. agency collateralized mortgage obligations	39,959		5,959		32,567		4,729
Other consumer or commercial loans	5,270		3,923		3,066		1,569
Total	$	132,049	$	16,917	$	123,601	$	13,104


March ~~2022~~2023 Form 10-Q			5658


Table of Contents
Notes to Consolidated Financial Statements (Unaudited)

Fair Value at December 31, 2021
$ in millions Level 2 Level 3 Total
Retained interests
Investment grade $ 536 $ 2 $ 538
Non-investment grade 40 40 80
Total $ 576 $ 42 $ 618
Interests purchased in the secondary market
Investment grade $ 168 $ 1 $ 169
Non-investment grade 70 25 95
Total $ 238 $ 26 $ 264
Derivative assets $ 891 $ — $ 891
Derivative liabilities 194 90 284
Transferred Assets with Continuing Involvement


	At March 31, 2023
$ in millions	RML		CML		U.S. Agency CMO		CLN and Other1
SPE assets (UPB)2,3	$	4,095	$	72,848	$	7,061	$	10,689
Retained interests
Investment grade	$	138	$	888	$	424	$	—
Non-investment grade	81		512		—		42
Total	$	219	$	1,400	$	424	$	42
Interests purchased in the secondary market3
Investment grade	$	17	$	49	$	10	$	—
Non-investment grade	6		16		—		—
Total	$	23	$	65	$	10	$	—
Derivative assets	$	—	$	—	$	—	$	1,151
Derivative liabilities	—		—		—		288


	At December 31, 2022
$ in millions	RML		CML		U.S. Agency CMO		CLN and Other1
SPE assets (UPB)2,3	$	3,732	$	73,069	$	6,448	$	10,928
Retained interests
Investment grade	$	137	$	927	$	367	$	—
Non-investment grade	26		465		11		44
Total	$	163	$	1,392	$	378	$	44
Interests purchased in the secondary market3
Investment grade	$	82	$	51	$	10	$	—
Non-investment grade	35		23		—		—
Total	$	117	$	74	$	10	$	—
Derivative assets	$	—	$	—	$	—	$	1,114
Derivative liabilities	—		—		—		201


	Fair Value At March 31, 2023
$ in millions	Level 2		Level 3		Total
Retained interests
Investment grade	$	561	$	—	$	561
Non-investment grade	17		51		68
Total	$	578	$	51	$	629
Interests purchased in the secondary market3
Investment grade	$	74	$	2	$	76
Non-investment grade	13		9		22
Total	$	87	$	11	$	98
Derivative assets	$	1,151	$	—	$	1,151
Derivative liabilities	288		—		288


	Fair Value at December 31, 2022
$ in millions	Level 2		Level 3		Total
Retained interests
Investment grade	$	489	$	—	$	489
Non-investment grade	25		16		41
Total	$	514	$	16	$	530
Interests purchased in the secondary market3
Investment grade	$	140	$	3	$	143
Non-investment grade	42		16		58
Total	$	182	$	19	$	201
Derivative assets	$	1,114	$	—	$	1,114
Derivative liabilities	153		48		201

RML—Residential mortgage loans

CML—Commercial mortgage loans

1.Amounts include CLO transactions managed by unrelated third parties.

2.Amounts include assets transferred by unrelated transferors.

3.Amounts are only included for transactions where the Firm also holds retained interests as part of the transfer.

The previous tables include transactions with SPEs in which the Firm, acting as principal, transferred financial assets with continuing involvement and received sales treatment. The transferred assets are carried at fair value prior to securitization, and any changes in fair value are recognized in the income statement. The Firm may act as underwriter of the beneficial interests issued by these securitization vehicles, for which Investment banking revenues are recognized. The Firm may retain interests in the securitized financial assets as one or more tranches of the securitization. ~~These~~Certain retained interests are ~~generally~~ carried at fair value in the balance sheet with changes in fair value recognized in the income statement. Fair value for these interests is measured using techniques that are consistent with the valuation techniques applied to the Firm’s major categories of assets and liabilities as described in Note 2 in the ~~2021~~2022 Form 10-K and Note 4 herein. Further, as permitted by applicable guidance, certain transfers of assets where the Firm’s only continuing involvement is a derivative are only reported in the following Assets Sold with Retained Exposure table.

Proceeds from New Securitization Transactions and Sales of Loans


		Three Months Ended March 31,					Three Months Ended March 31,
$ in millions	$ in millions	2022		2021		$ in millions		2023		2022
New transactions1	New transactions1	$	8,260	$	14,790	New transactions1		$	2,521	$	8,260
Retained interests	Retained interests	1,622		2,579		Retained interests		1,575		1,622
Sales of corporate loans to CLO SPEs1, 2	Sales of corporate loans to CLO SPEs1, 2	4		—		Sales of corporate loans to CLO SPEs1, 2		—		4

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.

The Firm has provided, or otherwise agreed to be responsible for, representations and warranties regarding certain assets transferred in securitization transactions sponsored by the Firm (see Note 13).

Assets Sold with Retained Exposure


$ in millions	$ in millions	At March 31, 2022		At December 31, 2021		$ in millions	At March 31, 2023		At December 31, 2022
Gross cash proceeds from sale of assets1	Gross cash proceeds from sale of assets1	$	60,826	$	67,930	Gross cash proceeds from sale of assets1	$	49,167	$	49,059
Fair value	Fair value					Fair value
Assets sold	Assets sold	$	62,015	$	68,992	Assets sold	$	49,824	$	47,281
Derivative assets recognized in the balance sheet	Derivative assets recognized in the balance sheet	1,474		1,195		Derivative assets recognized in the balance sheet	885		116
Derivative liabilities recognized in the balance sheet	Derivative liabilities recognized in the balance sheet	284		132		Derivative liabilities recognized in the balance sheet	228		1,893

1.The carrying value of assets derecognized at the time of sale approximates gross cash proceeds.

The Firm enters into transactions in which it sells securities, primarily equities, and contemporaneously enters into bilateral OTC derivatives with the purchasers of the securities, through which it retains exposure to the sold securities.

For a discussion of the Firm’s VIEs, the determination and structure of VIEs and securitization activities, see Note 16 to the financial statements in the ~~2021~~2022 Form 10-K.


			59			March 2023 Form 10-Q


Table of Contents
Notes to Consolidated Financial Statements (Unaudited)

15. Regulatory Requirements

Regulatory Capital Framework and Requirements

For a discussion of the Firm’s regulatory capital framework, see Note 17 to the financial statements in the ~~2021~~2022 Form 10-K.

The Firm is required to maintain minimum risk-based and leverage-based capital ratios under regulatory capital requirements. A summary of the calculations of regulatory capital and RWA follows.

Risk-Based Regulatory Capital. Risk-based capital ratio requirements apply to Common Equity Tier 1 capital, Tier 1 capital and Total capital (which includes Tier 2 capital), each as a percentage of RWA, and consist of regulatory minimum required ratios plus the Firm’s capital buffer requirement. Capital requirements require certain adjustments to, and deductions from, capital for purposes of determining these ratios. At March 31, ~~2022~~2023 and December 31, ~~2021,~~2022, the differences between the actual and required ratios were lower under the Standardized Approach.

CECL Deferral.As Beginning on January 1, 2020, the Firm elected to defer the effect of ~~December 31, 2021,~~ the adoption of CECL on its risk-based and leverage-based capital amounts and ratios, as well as RWA, adjusted average assets and supplementary leverage exposure ~~were calculated excluding the effect of the adoption of CECL based on the Firm’s election to defer this effect~~calculations, over a five-year transition ~~period that began on January 1, 2020. In 2022 t~~heperiod. The deferral impacts began to phase in at 25% per year from January 1, 2022 and are phased-in at 50% from January 1, 2023. The deferral impacts will become fully phased-in beginning inon January 1, 2025.


			57			~~March 2022 Form 10-Q~~


~~Table of Contents~~
Notes to Consolidated Financial Statements (Unaudited)

Capital Buffer Requirements

At March 31, 2022 and December 31, 2021

At March 31, 2023 and December 31, 2022

Standardized

Advanced

Standardized

Advanced

Capital buffers

Capital conservation buffer

—

2.5%

Capital conservation buffer

—

2.5%

SCB

5.7%

N/A

SCB

5.8%

N/A

G-SIB capital surcharge

3.0%

G-SIB capital surcharge

3.0%

CCyB1

Capital buffer requirement

8.7%

5.5%

Capital buffer requirement

8.8%

5.5%

1.The CCyB can be set up to 2.5%, but is currently set by the Federal Reserve at zero.

The capital buffer requirement represents the amount of Common Equity Tier 1 capital the Firm must maintain above the minimum risk-based capital requirements in order to avoid restrictions on the Firm’s ability to make capital distributions, including the payment of dividends and the repurchase of stock, and to pay discretionary bonuses to executive officers. The Firm’s ~~Standardized Approach~~ capital buffer requirement computed under the standardized approaches for calculating credit risk and market risk RWA (“Standardized Approach”) is equal to the sum of the SCB, G-SIB capital surcharge and CCyB, and the ~~Advanced Approach~~ capital buffer requirement computed under the applicable advanced approaches for calculating credit risk, market risk and opeational risk RWA (“Advanced Approach”) is equal to the

2.5% capital conservation buffer, G-SIB capital surcharge and CCyB.

Risk-Based Regulatory Capital Ratio Requirements


		Regulatory Minimum		At March 31, 2022 and December 31, 2021		Regulatory Minimum		At March 31, 2023 and December 31, 2022
				Standardized	Advanced			Regulatory Minimum		Standardized	Advanced
Required ratios1	Required ratios1						Required ratios1
Common Equity Tier 1 capital ratio	Common Equity Tier 1 capital ratio	4.5	%	13.2%	10.0%		Common Equity Tier 1 capital ratio	4.5	%	13.3%	10.0%
Tier 1 capital ratio	Tier 1 capital ratio	6.0	%	14.7%	11.5%		Tier 1 capital ratio	6.0	%	14.8%	11.5%
Total capital ratio	Total capital ratio	8.0	%	16.7%	13.5%		Total capital ratio	8.0	%	16.8%	13.5%

1.Required ratios represent the regulatory minimum plus the capital buffer requirement.

The Firm’s Regulatory Capital and Capital Ratios


$ in millions	$ in millions	Required Ratio1		At March 31, 2022			At December 31, 2021			$ in millions	Required Ratio1		At March 31, 2023			At December 31, 2022
Risk-based capital	Risk-based capital									Risk-based capital
Common Equity Tier 1 capital	Common Equity Tier 1 capital			$	72,477		$	75,742		Common Equity Tier 1 capital			$	69,454		$	68,670
Tier 1 capital	Tier 1 capital			80,121			83,348			Tier 1 capital			77,947			77,191
Total capital	Total capital			89,468			93,166			Total capital			89,794			86,575
Total RWA	Total RWA			501,429			471,921			Total RWA			459,107			447,849
Common Equity Tier 1 capital ratio	Common Equity Tier 1 capital ratio	13.2	%	14.5		%	16.0		%	Common Equity Tier 1 capital ratio	13.3	%	15.1		%	15.3		%
Tier 1 capital ratio	Tier 1 capital ratio	14.7	%	16.0		%	17.7		%	Tier 1 capital ratio	14.8	%	17.0		%	17.2		%
Total capital ratio	Total capital ratio	16.7	%	17.8		%	19.7		%	Total capital ratio	16.8	%	19.6		%	19.3		%

$ in millions	$ in millions	Required Ratio1		At March 31, 2022			At December 31, 2021			$ in millions	Required Ratio1		At March 31, 2023			At December 31, 2022
Leverage-based capital	Leverage-based capital									Leverage-based capital
Adjusted average assets2	Adjusted average assets2			$	1,184,494		$	1,169,939		Adjusted average assets2			$	1,168,328		$	1,150,772
Tier 1 leverage ratio	Tier 1 leverage ratio	4.0	%	6.8		%	7.1		%	Tier 1 leverage ratio	4.0	%	6.7		%	6.7		%
Supplementary leverage exposure3	Supplementary leverage exposure3			$	1,466,624		$	1,476,962		Supplementary leverage exposure3			$	1,422,808		$	1,399,403
SLR	SLR	5.0	%	5.5		%	5.6		%	SLR	5.0	%	5.5		%	5.5		%

1.Required ratios are inclusive of any buffers applicable as of the date presented.

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 for the quarters ending on the respective balance sheet dates, reduced by disallowed goodwill, intangible assets, investments in covered funds, defined benefit pension plan assets, after-tax gain on sale from assets sold into securitizations, investments in the Firm’s own capital instruments, certain defined tax assets and other capital deductions.

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.

U.S. Bank Subsidiaries’ Regulatory Capital and Capital Ratios

The OCC establishes capital requirements for the ~~Firm’s~~ U.S. ~~bank subsidiaries, which includes Morgan Stanley~~ Bank ~~N.A. (“MSBNA”) and Morgan Stanley Private Bank, National Association (“MSPBNA”) (collectively, “U.S. Bank Subsidiaries”),~~Subsidiaries, and evaluates their compliance with such capital requirements. Regulatory capital requirements for the U.S. Bank Subsidiaries are calculated in a similar manner to the Firm’s regulatory capital requirements, although G-SIB capital surcharge and SCB requirements do not apply to the U.S. Bank Subsidiaries.

The OCC’s regulatory capital framework includes Prompt Corrective Action (“PCA”) standards, including “well-capitalized” PCA standards that are based on specified regulatory capital ratio minimums. For the Firm to remain an FHC, its U.S. Bank Subsidiaries must remain well-capitalized in accordance with the OCC’s PCA standards. In addition, failure by the U.S. Bank Subsidiaries to meet minimum capital requirements may result in certain mandatory and discretionary actions by regulators that, if undertaken, could have a direct material effect on the U.S. Bank Subsidiaries’ and the Firm’s financial statements.

At March 31, 2022 and December 31, 2021, MSBNA and MSPBNA risk-based capital ratios are based on the Standardized Approach rules. As of December 31, 2021, the risk-based and leverage-based capital amounts and ratios were


March ~~2022~~2023 Form 10-Q			5860


Table of Contents
Notes to Consolidated Financial Statements (Unaudited)

~~calculated excluding~~capital requirements may result in certain mandatory and discretionary actions by regulators that, if undertaken, could have a direct material effect on the U.S. Bank Subsidiaries’ and the Firm’s financial statements.

At March 31, 2023 and December 31, 2022, MSBNA and MSPBNA risk-based capital ratios are based on the Standardized Approach rules. Beginning on January 1, 2020, MSBNA and MSPBNA elected to defer the effect of the adoption of CECL ~~based~~ on ~~MSBNA’s~~risk-based capital amounts and ~~MSPBNA’s election to defer this effect~~ratios, as well as RWA, adjusted average assets and supplementary leverage exposure calculations, over a five-year transition ~~period that began on January 1, 2020. In 2022 t~~heperiod. The deferral impacts began to phase in at 25% per year from January 1, 2022 and are phased-in at 50% from January 1, 2023. The deferral impacts will become fully phased-in beginning inon January 1, 2025.

MSBNA’s Regulatory Capital


		Well-Capitalized Requirement		Required Ratio1		At March 31, 2022				At December 31, 2021					Well-Capitalized Requirement		Required Ratio1		At March 31, 2023				At December 31, 2022
$ in millions	$ in millions					Amount		Ratio		Amount		Ratio		$ in millions					Amount		Ratio		Amount		Ratio
Risk-based capital	Risk-based capital													Risk-based capital
Common Equity Tier 1 capital	Common Equity Tier 1 capital	6.5	%	7.0	%	$	18,386	18.7	%	$	18,960	20.5	%	Common Equity Tier 1 capital	6.5	%	7.0	%	$	21,485	21.5	%	$	20,043	20.5	%
Tier 1 capital	Tier 1 capital	8.0	%	8.5	%	18,386		18.7	%	18,960		20.5	%	Tier 1 capital	8.0	%	8.5	%	21,485		21.5	%	20,043		20.5	%
Total capital	Total capital	10.0	%	10.5	%	18,961		19.3	%	19,544		21.1	%	Total capital	10.0	%	10.5	%	22,221		22.3	%	20,694		21.1	%
Leverage-based capital	Leverage-based capital													Leverage-based capital
Tier 1 leverage	Tier 1 leverage	5.0	%	4.0	%	$	18,386	9.3	%	$	18,960	10.2	%	Tier 1 leverage	5.0	%	4.0	%	$	21,485	10.5	%	$	20,043	10.1	%
SLR	SLR	6.0	%	3.0	%	18,386		7.4	%	18,960		8.1	%	SLR	6.0	%	3.0	%	21,485		8.3	%	20,043		8.1	%

MSPBNA’s Regulatory Capital


		Well-Capitalized Requirement		Required Ratio1		At March 31, 20222				At December 31, 2021					Well-Capitalized Requirement		Required Ratio1		At March 31, 2023				At December 31, 2022
$ in millions	$ in millions					Amount		Ratio		Amount		Ratio		$ in millions					Amount		Ratio		Amount		Ratio
Risk-based capital	Risk-based capital													Risk-based capital
Common Equity Tier 1 capital	Common Equity Tier 1 capital	6.5	%	7.0	%	$	15,142	29.4	%	$	10,293	24.3	%	Common Equity Tier 1 capital	6.5	%	7.0	%	$	16,321	28.3	%	$	15,546	27.5	%
Tier 1 capital	Tier 1 capital	8.0	%	8.5	%	15,142		29.4	%	10,293		24.3	%	Tier 1 capital	8.0	%	8.5	%	16,321		28.3	%	15,546		27.5	%
Total capital	Total capital	10.0	%	10.5	%	15,237		29.6	%	10,368		24.5	%	Total capital	10.0	%	10.5	%	16,521		28.6	%	15,695		27.8	%

Leverage-based capital	Leverage-based capital													Leverage-based capital
Tier 1 leverage	Tier 1 leverage	5.0	%	4.0	%	$	15,142	7.4	%	$	10,293	6.9	%	Tier 1 leverage	5.0	%	4.0	%	$	16,321	8.1	%	$	15,546	7.6	%
SLR	SLR	6.0	%	3.0	%	15,142		7.3	%	10,293		6.7	%	SLR	6.0	%	3.0	%	16,321		7.8	%	15,546		7.4	%

1.Required ratios are inclusive of any buffers applicable as of the date presented. Failure to maintain the buffers would result in restrictions on the ability to make capital distributions, including the payment of dividends.

2.~~Regulatory capital amounts and ratios as of March 31, 2022 include the amounts from E*TRADE Bank (“ETB”) and E*TRADE Savings Bank (“ETSB”) as a result of the merger described herein.~~

Additionally, MSBNA is conditionally registered with the SEC as a security-based swap dealer and is provisionally registered with the CFTC as a swap dealer. However, as MSBNA is prudentially regulated as a bank, its capital requirements continue to be determined by ~~its banking regulators.~~the OCC.

Other Regulatory Capital Requirements

MS&Co. Regulatory Capital


$ in millions	$ in millions	At March 31, 2022		At December 31, 2021		$ in millions	At March 31, 2023		At December 31, 2022
Net capital	Net capital	$	16,799	$	18,383	Net capital	$	17,616	$	17,224
Excess net capital	Excess net capital	12,261		14,208		Excess net capital	13,134		12,861

MS&Co. is registered as a broker-dealer and a futures commission merchant with the SEC and the CFTC,

respectively, and provisionally registered as a swap dealer with the CFTC.

As an Alternative Net Capital broker-dealer, and in accordance with Securities Exchange Act of 1934 (“Exchange Act”) Rule 15c3-1, Appendix E, MS&Co. is subject to minimum net capital and tentative net capital requirements and operates with capital in excess of its regulatory capital requirements. As a futures commission merchant and

provisionally-registered swap dealer, MS&Co. is subject to CFTC capital requirements. In addition, MS&Co. must notify the SEC if its tentative net capital falls below certain levels. At March 31, ~~2022~~2023 and December 31, ~~2021,~~2022, MS&Co. exceeded its net capital requirement and had tentative net capital in excess of the minimum and notification requirements.

Other Regulated Subsidiaries

~~The following~~Certain subsidiaries are also subject to various regulatory capital ~~requirements and~~requirements. Such subsidiaries include the following, each of which operated with capital in excess of their respective regulatory capital requirements as of March 31, ~~2022~~2023 and December 31, ~~2021,~~2022, as applicable:

•MSSB,

•MSIP,

•~~Morgan Stanley Europe Holdings SE Group, including~~ MSESE,

•MSMS,

•MSCS,

•MSCG, and

•E*TRADE Securities LLC.

~~ETB and ETSB were each previously~~

MSESE is subject to ~~the~~stand-alone capital requirements beginning on January 1, 2023. Previously, requirements were met at the consolidated level of the ~~OCC until January 1, 2022, when ETSB merged with and into ETB, and subsequently ETB merged with and into MSPBNA, with MSPBNA as the surviving bank.~~MSEHSE Group.

See Note 17 to the financial statements in the ~~2021~~2022 Form ~~10-~~K10-K for further information.

~~16. Total Equity~~

~~Preferred Stock~~

Shares Outstanding Carrying Value
$ in millions, except per share data At
March 31,
2022
Liquidation
Preference
per Share
At
March 31,
2022 At
December 31,
2021
Series
A 44,000 $ 25,000 $ 1,100 $ 1,100
C1
519,882 1,000 408 408
E 34,500 25,000 862 862
F 34,000 25,000 850 850
I 40,000 25,000 1,000 1,000
K 40,000 25,000 1,000 1,000
L 20,000 25,000 500 500
M 400,000 1,000 430 430
N 3,000 100,000 300 300
O 52,000 25,000 1,300 1,300
Total $ 7,750 $ 7,750
Shares authorized 30,000,000

1.~~Series C preferred stock is held by MUFG.~~

On March 15, 2021, the Firm announced the redemption in whole of its outstanding Series J preferred stock. On notice of redemption, the amount due to holders of Series J Preferred Stock was reclassified to Borrowings, and on April 15, 2021, the redemption settled at the carrying value of $1.5 billion.


			5961			March ~~2022~~2023 Form 10-Q


Table of Contents
Notes to Consolidated Financial Statements (Unaudited)

16. Total Equity

Preferred Stock


	Shares Outstanding			Carrying Value
$ in millions, except per share data	At March 31, 2023	Liquidation Preference per Share		At March 31, 2023		At December 31, 2022
Series
A	44,000	$	25,000	$	1,100	$	1,100
C1	519,882	1,000		408		408
E	34,500	25,000		862		862
F	34,000	25,000		850		850
I	40,000	25,000		1,000		1,000
K	40,000	25,000		1,000		1,000
L	20,000	25,000		500		500
M	400,000	1,000		430		430
N	3,000	100,000		300		300
O	52,000	25,000		1,300		1,300
P	40,000	25,000		1,000		1,000
Total				$	8,750	$	8,750
Shares authorized						30,000,000

1.Series C preferred stock is held by MUFG.

For a description of Series A through Series OP preferred stock, see Note 18 to the financial statements in the ~~2021~~2022 Form 10-K. The Firm’s preferred stock has a preference over its common stock upon liquidation. The Firm’s preferred stock qualifies as and is included in Tier 1 capital in accordance with regulatory capital requirements (see Note 15).

Share Repurchases


		Three Months Ended March 31,						Three Months Ended March 31,
$ in millions	$ in millions		2022		2021		$ in millions		2023		2022
Repurchases of common stock under the Firm’s Share Repurchase Program			$	2,872	$	2,135
Repurchases of common stock under the Firm’s Share Repurchase Authorization							Repurchases of common stock under the Firm’s Share Repurchase Authorization		$	1,500	$	2,872

On June ~~28, 2021,~~27, 2022, the Firm announced that its Board of Directors ~~authorized the~~approved a new multi-year repurchase authorization of up to ~~$12~~$20 billion of outstanding common stock, ~~from July 1, 2021 through June 30,~~without a set expiration date, beginning in the third quarter of 2022, which will be exercised from time to time as conditions warrant. For more information on share repurchases, see Note 18 to the fi~~nancial~~financial statements in the ~~2021~~2022 Form 10-K.

Common Shares Outstanding for Basic and Diluted EPS


		Three Months Ended March 31,		Three Months Ended March 31,
in millions	in millions	2022	2021		in millions	2023	2022
Weighted average common shares outstanding, basic	Weighted average common shares outstanding, basic	1,733	1,795		Weighted average common shares outstanding, basic	1,645	1,733
Effect of dilutive RSUs and PSUs	Effect of dilutive RSUs and PSUs	22	23		Effect of dilutive RSUs and PSUs	18	22
Weighted average common shares outstanding and common stock equivalents, diluted	Weighted average common shares outstanding and common stock equivalents, diluted	1,755	1,818		Weighted average common shares outstanding and common stock equivalents, diluted	1,663	1,755
Weighted average antidilutive common stock equivalents (excluded from the computation of diluted EPS)	Weighted average antidilutive common stock equivalents (excluded from the computation of diluted EPS)	5	1		Weighted average antidilutive common stock equivalents (excluded from the computation of diluted EPS)	4	5

Dividends


$ in millions, except per share data	$ in millions, except per share data	Three Months Ended March 31, 2022				Three Months Ended March 31, 2021				$ in millions, except per share data	Three Months Ended March 31, 2023				Three Months Ended March 31, 2022
		Per Share1		Total		Per Share1		Total			Per Share1		Total		Per Share1		Total
Preferred stock series	Preferred stock series									Preferred stock series
A	A	$	242	$	11	$	250	$	11	A	$	343	$	15	$	242	$	11
C	C	25		13		25		13		C	25		13		25		13
E	E	445		15		445		15		E	445		15		445		15
F	F	430		14		430		14		F	430		14		430		14
H2		—		—		241		13
I	I	398		16		398		16		I	398		16		398		16
J3		—		—		253		15
K	K	366		15		366		15		K	366		15		366		15
L	L	305		6		305		6		L	305		6		305		6
M4		29		12		29		12
N5		2,650		8		2,650		8
O6		266		14		—		—
M2										M2	29		12		29		12
N3										N3	2,650		8		2,650		8
O4										O4	266		14		266		14
P										P	406		16		—		—
Total Preferred stock	Total Preferred stock			$	124			$	138	Total Preferred stock			$	144			$	124
Common stock	Common stock	$	0.70	$	1,252	$	0.35	$	635	Common stock	$	0.775	$	1,305	$	0.700	$	1,252

1.Common and Preferred Stock dividends are payable quarterly unless otherwise noted.

2.~~A notice of redemption was issued for Series H preferred stock on November 19, 2021.~~

3.~~Series J was payable semiannually until July 15, 2020, after which it was payable quarterly until its redemption.~~

4.Series M is payable semiannually until September 15, 2026 and thereafter will be payable quarterly.

5.3.Series N iswas payable semiannually until March 15, 2023 and thereafter ~~will be~~is payable quarterly.

6.4.Series O is payable semiannually until January 15, 2027 and thereafter will be payable quarterly.

Accumulated Other Comprehensive Income (Loss)1

$ in millions CTA AFS Securities Pension and Other DVA Total
December 31, 2021 $ (1,002) $ 245 $ (551) $ (1,794) $ (3,102)
OCI during the period (48) (2,395) 5 638 (1,800)
March 31, 2022 $ (1,050) $ (2,150) $ (546) $ (1,156) $ (4,902)
December 31, 2020 $ (795) $ 1,787 $ (498) $ (2,456) $ (1,962)
OCI during the period (141) (776) 5 120 (792)
March 31, 2021 $ (936) $ 1,011 $ (493) $ (2,336) $ (2,754)

~~CTA—Cumulative foreign currency translation adjustments~~


$ in millions	CTA		AFS Securities		Pension and Other		DVA		Cash Flow Hedges		Total






December 31, 2022	$	(1,204)	$	(4,192)	$	(508)	$	(345)	$	(4)	$	(6,253)
OCI during the period	32		512		(1)		(8)		7		542
March 31, 2023	$	(1,172)	$	(3,680)	$	(509)	$	(353)	$	3	$	(5,711)
December 31, 2021	$	(1,002)	$	245	$	(551)	$	(1,794)	$	—	$	(3,102)
OCI during the period	(48)		(2,395)		5		638		—		(1,800)
March 31, 2022	$	(1,050)	$	(2,150)	$	(546)	$	(1,156)	$	—	$	(4,902)

1.Amounts are net of tax and noncontrolling interests.


March 2023 Form 10-Q			62


Table of Contents
Notes to Consolidated Financial Statements (Unaudited)

Components of Period Changes in OCI

~~Components of Period Changes in OCI~~


	Three Months Ended March 31, 2023
$ in millions	Pre-tax Gain (Loss)		Income Tax Benefit (Provision)		After-tax Gain (Loss)		Non-controlling Interests		Net
CTA
OCI activity	$	(10)	$	30	$	20	$	(12)	$	32
Reclassified to earnings	—		—		—		—		—
Net OCI	$	(10)	$	30	$	20	$	(12)	$	32
Change in net unrealized gains (losses) on AFS securities
OCI activity	$	710	$	(167)	$	543	$	—	$	543
Reclassified to earnings	(41)		10		(31)		—		(31)
Net OCI	$	669	$	(157)	$	512	$	—	$	512
Pension and other
OCI activity	$	—	$	—	$	—	$	—	$	—
Reclassified to earnings	(1)		—		(1)		—		(1)
Net OCI	$	(1)	$	—	$	(1)	$	—	$	(1)
Change in net DVA
OCI activity	$	(30)	$	10	$	(20)	$	(7)	$	(13)
Reclassified to earnings	6		(1)		5		—		5
Net OCI	$	(24)	$	9	$	(15)	$	(7)	$	(8)
Change in fair value of cash flow hedge derivatives
OCI activity	$	7	$	(1)	$	6	$	—	$	6
Reclassified to earnings	1		—		1		—		1
Net OCI	$	8	$	(1)	$	7	$	—	$	7

Three Months Ended March 31, 2022
$ in millions Pre-tax
Gain
(Loss) Income
Tax Benefit
(Provision) After-tax
Gain
(Loss) Non-
controlling
Interests Net
CTA
OCI activity $ (60) $ (45) $ (105) $ (57) $ (48)
Reclassified to earnings — — — — —
Net OCI $ (60) $ (45) $ (105) $ (57) $ (48)
Change in net unrealized gains (losses) on AFS securities
OCI activity $ (3,084) $ 723 $ (2,361) $ — $ (2,361)
Reclassified to earnings (44) 10 (34) — (34)
Net OCI $ (3,128) $ 733 $ (2,395) $ — $ (2,395)
Pension and other
OCI activity $ — $ — $ — $ — $ —
Reclassified to earnings 5 — 5 — 5
Net OCI $ 5 $ — $ 5 $ — $ 5
Change in net DVA
OCI activity $ 871 $ (211) $ 660 $ 22 $ 638
Reclassified to earnings — — — — —
Net OCI $ 871 $ (211) $ 660 $ 22 $ 638


		Three Months Ended March 31, 2021											Three Months Ended March 31, 2022
$ in millions	$ in millions	Pre-tax Gain (Loss)		Income Tax Benefit (Provision)		After-tax Gain (Loss)		Non- controlling Interests		Net		$ in millions	Pre-tax Gain (Loss)		Income Tax Benefit (Provision)		After-tax Gain (Loss)		Non-controlling Interests		Net
CTA	CTA											CTA
OCI activity	OCI activity	$	(104)	$	(115)	$	(219)	$	(78)	$	(141)	OCI activity	$	(60)	$	(45)	$	(105)	$	(57)	$	(48)
Reclassified to earnings	Reclassified to earnings	—		—		—		—		—		Reclassified to earnings	—		—		—		—		—
Net OCI	Net OCI	$	(104)	$	(115)	$	(219)	$	(78)	$	(141)	Net OCI	$	(60)	$	(45)	$	(105)	$	(57)	$	(48)
Change in net unrealized gains (losses) on AFS securities	Change in net unrealized gains (losses) on AFS securities											Change in net unrealized gains (losses) on AFS securities
OCI activity	OCI activity	$	(876)	$	203	$	(673)	$	—	$	(673)	OCI activity	$	(3,084)	$	723	$	(2,361)	$	—	$	(2,361)
Reclassified to earnings	Reclassified to earnings	(134)		31		(103)		—		(103)		Reclassified to earnings	(44)		10		(34)		—		(34)
Net OCI	Net OCI	$	(1,010)	$	234	$	(776)	$	—	$	(776)	Net OCI	$	(3,128)	$	733	$	(2,395)	$	—	$	(2,395)
Pension and other	Pension and other											Pension and other
OCI activity	OCI activity	$	—	$	—	$	—	$	—	$	—	OCI activity	$	—	$	—	$	—	$	—	$	—
Reclassified to earnings	Reclassified to earnings	7		(2)		5		—		5		Reclassified to earnings	5		—		5		—		5
Net OCI	Net OCI	$	7	$	(2)	$	5	$	—	$	5	Net OCI	$	5	$	—	$	5	$	—	$	5
Change in net DVA	Change in net DVA											Change in net DVA
OCI activity	OCI activity	$	167	$	(43)	$	124	$	17	$	107	OCI activity	$	871	$	(211)	$	660	$	22	$	638
Reclassified to earnings	Reclassified to earnings	17		(4)		13		—		13		Reclassified to earnings	—		—		—		—		—
Net OCI	Net OCI	$	184	$	(47)	$	137	$	17	$	120	Net OCI	$	871	$	(211)	$	660	$	22	$	638


~~March 2022 Form 10-Q~~			60


~~Table of Contents~~
Notes to Consolidated Financial Statements (Unaudited)

17. Interest Income and Interest Expense


		Three Months Ended March 31,						Three Months Ended March 31,
$ in millions	$ in millions		2022		2021		$ in millions		2023		2022
Interest income	Interest income						Interest income
Investment securities	Investment securities		$	777	$	849	Investment securities		$	1,018	$	777
Loans	Loans		1,156		988		Loans		2,815		1,156
Securities purchased under agreements to resell1,2			13		(55)
Securities borrowed1,3			(217)		(241)
Securities purchased under agreements to resell1							Securities purchased under agreements to resell1		1,477		13
Securities borrowed2							Securities borrowed2		1,172		(217)
Trading assets, net of Trading liabilities	Trading assets, net of Trading liabilities		524		510		Trading assets, net of Trading liabilities		913		524
Customer receivables and Other4			397		386
Customer receivables and Other3							Customer receivables and Other3		3,475		397
Total interest income	Total interest income		$	2,650	$	2,437	Total interest income		$	10,870	$	2,650

Interest expense	Interest expense						Interest expense
Deposits	Deposits		$	73	$	120	Deposits		$	1,575	$	73
Borrowings	Borrowings		685		714		Borrowings		2,506		685
Securities sold under agreements to repurchase1,5			49		37
Securities loaned1,6			93		77
Customer payables and Other7			(466)		(539)
Securities sold under agreements to repurchase4							Securities sold under agreements to repurchase4		1,218		49
Securities loaned5							Securities loaned5		164		93
Customer payables and Other6							Customer payables and Other6		3,061		(466)
Total interest expense	Total interest expense		$	434	$	409	Total interest expense		$	8,524	$	434
Net interest	Net interest		$	2,216	$	2,028	Net interest		$	2,346	$	2,216

1.~~Certain prior period amounts have been reclassified to conform to the current~~ ~~presentation.~~

2.Includes interest paid on Securities purchased under agreements to resell.

3.2.Includes fees paid on Securities borrowed.

4.3.Includes interest from Cash and cash equivalents.

5.4.Includes interest received on Securities sold under agreements to repurchase.

6.5.Includes fees received on Securities loaned.

7.6.Includes fees received from Equity Financing customers related to their short transactions, which can be under either margin or securities lending arrangements.

Interest income and Interest expense are classified in the income statement based on the nature of the instrument and related market conventions. When included as a component of the instrument’s fair value, interest is included within Trading revenues or Investments revenues. Otherwise, it is included within Interest income or Interest expense.

Accrued Interest


$ in millions	$ in millions	At March 31, 2022		At December 31, 2021		$ in millions	At March 31, 2023		At December 31, 2022
Customer and other receivables	Customer and other receivables	$	2,309	$	1,800	Customer and other receivables	$	3,842	$	4,139
Customer and other payables	Customer and other payables	2,659		2,164		Customer and other payables	3,957		4,273

18. Income Taxes

The Firm is routinely under examination by the IRS and other tax authorities in certain countries, such as Japan and the U.K., and in states and localities in which it has significant business operations, such as New York.

The Firm believes that the resolution of these tax examinations will not have a material effect on the annual financial statements, although a resolution could have a material impact in the income statement and on the effective tax rate for any period in which such resolutions occur.

It is reasonably possible that significant changes in the balance of unrecognized tax benefits may occur within the next 12 months. At this time, however, it is not possible to reasonably estimate the expected change to the total amount of unrecognized tax benefits and the impact on the Firm’s effective tax rate over the next 12 months.


			63			March 2023 Form 10-Q


Table of Contents
Notes to Consolidated Financial Statements (Unaudited)

19. Segment, Geographic and Revenue Information

Selected Financial Information by Business Segment


		Three Months Ended March 31, 2022											Three Months Ended March 31, 2023
$ in millions	$ in millions	IS		WM		IM		I/E		Total		$ in millions	IS		WM		IM		I/E		Total
Investment banking	Investment banking	$	1,634	$	143	$	—	$	(19)	$	1,758	Investment banking	$	1,247	$	104	$	—	$	(21)	$	1,330
Trading	Trading	4,205		(231)		(9)		18		3,983		Trading	4,257		227		(16)		9		4,477
Investments	Investments	99		12		(36)		—		75		Investments	28		16		101		—		145
Commissions and fees1	Commissions and fees1	774		723		—		(81)		1,416		Commissions and fees1	714		590		—		(65)		1,239
Asset management1,2	Asset management1,2	147		3,626		1,388		(42)		5,119		Asset management1,2	148		3,382		1,248		(50)		4,728
Other	Other	117		122		(2)		(3)		234		Other	180		82		(6)		(4)		252
Total non-interest revenues	Total non-interest revenues	6,976		4,395		1,341		(127)		12,585		Total non-interest revenues	6,574		4,401		1,327		(131)		12,171
Interest income	Interest income	1,062		1,637		7		(56)		2,650		Interest income	7,758		3,627		29		(544)		10,870
Interest expense	Interest expense	381		97		13		(57)		434		Interest expense	7,535		1,469		67		(547)		8,524
Net interest	Net interest	681		1,540		(6)		1		2,216		Net interest	223		2,158		(38)		3		2,346
Net revenues	Net revenues	$	7,657	$	5,935	$	1,335	$	(126)	$	14,801	Net revenues	$	6,797	$	6,559	$	1,289	$	(128)	$	14,517
Provision for credit losses	Provision for credit losses	$	44	$	13	$	—	$	—	$	57	Provision for credit losses	$	189	$	45	$	—	$	—	$	234
Compensation and benefits	Compensation and benefits	2,604		3,125		545		—		6,274		Compensation and benefits	2,365		3,477		568		—		6,410
Non-compensation expenses	Non-compensation expenses	2,222		1,224		562		(126)		3,882		Non-compensation expenses	2,351		1,325		555		(118)		4,113
Total non-interest expenses	Total non-interest expenses	$	4,826	$	4,349	$	1,107	$	(126)	$	10,156	Total non-interest expenses	$	4,716	$	4,802	$	1,123	$	(118)	$	10,523
Income before provision for income taxes	Income before provision for income taxes	$	2,787	$	1,573	$	228	$	—	$	4,588	Income before provision for income taxes	$	1,892	$	1,712	$	166	$	(10)	$	3,760
Provision for income taxes	Provision for income taxes	535		301		37		—		873		Provision for income taxes	363		336		30		(2)		727

Net income	Net income	2,252		1,272		191		—		3,715		Net income	1,529		1,376		136		(8)		3,033
Net income applicable to noncontrolling interests	Net income applicable to noncontrolling interests	61		—		(12)		—		49		Net income applicable to noncontrolling interests	51		—		2		—		53
Net income applicable to Morgan Stanley	Net income applicable to Morgan Stanley	$	2,191	$	1,272	$	203	$	—	$	3,666	Net income applicable to Morgan Stanley	$	1,478	$	1,376	$	134	$	(8)	$	2,980


		Three Months Ended March 31, 2021											Three Months Ended March 31, 2022
$ in millions	$ in millions	IS		WM		IM		I/E		Total		$ in millions	IS		WM		IM		I/E		Total
Investment banking	Investment banking	$	2,613	$	251	$	—	$	(24)	$	2,840	Investment banking	$	1,634	$	143	$	—	$	(19)	$	1,758
Trading	Trading	4,073		126		3		23		4,225		Trading	4,205		(231)		(9)		18		3,983
Investments	Investments	86		2		230		—		318		Investments	99		12		(36)		—		75
Commissions and fees1	Commissions and fees1	870		851		—		(95)		1,626		Commissions and fees1	774		723		—		(81)		1,416
Asset management1,2	Asset management1,2	139		3,191		1,103		(35)		4,398		Asset management1,2	147		3,626		1,388		(42)		5,119
Other	Other	158		153		(24)		(3)		284		Other	117		122		(2)		(3)		234
Total non-interest revenues	Total non-interest revenues	7,939		4,574		1,312		(134)		13,691		Total non-interest revenues	6,976		4,395		1,341		(127)		12,585
Interest income	Interest income	970		1,486		8		(27)		2,437		Interest income	1,062		1,637		7		(56)		2,650
Interest expense	Interest expense	332		101		6		(30)		409		Interest expense	381		97		13		(57)		434
Net interest	Net interest	638		1,385		2		3		2,028		Net interest	681		1,540		(6)		1		2,216
Net revenues	Net revenues	$	8,577	$	5,959	$	1,314	$	(131)	$	15,719	Net revenues	$	7,657	$	5,935	$	1,335	$	(126)	$	14,801
Provision for credit losses	Provision for credit losses	$	(93)	$	(5)	$	—	$	—	$	(98)	Provision for credit losses	$	44	$	13	$	—	$	—	$	57
Compensation and benefits	Compensation and benefits	3,114		3,170		514		—		6,798		Compensation and benefits	2,604		3,125		545		—		6,274
Non-compensation expenses	Non-compensation expenses	2,185		1,194		430		(134)		3,675		Non-compensation expenses	2,222		1,224		562		(126)		3,882
Total non-interest expenses	Total non-interest expenses	$	5,299	$	4,364	$	944	$	(134)	$	10,473	Total non-interest expenses	$	4,826	$	4,349	$	1,107	$	(126)	$	10,156
Income before provision for income taxes	Income before provision for income taxes	$	3,371	$	1,600	$	370	$	3	$	5,344	Income before provision for income taxes	$	2,787	$	1,573	$	228	$	—	$	4,588
Provision for income taxes	Provision for income taxes	736		358		81		1		1,176		Provision for income taxes	535		301		37		—		873

Net income	Net income	2,635		1,242		289		2		4,168		Net income	2,252		1,272		191		—		3,715
Net income applicable to noncontrolling interests	Net income applicable to noncontrolling interests	34		—		14		—		48		Net income applicable to noncontrolling interests	61		—		(12)		—		49
Net income applicable to Morgan Stanley	Net income applicable to Morgan Stanley	$	2,601	$	1,242	$	275	$	2	$	4,120	Net income applicable to Morgan Stanley	$	2,191	$	1,272	$	203	$	—	$	3,666

1.Substantially all revenues are from contracts with customers.

2.Includes certain fees that may relate to services performed in prior periods.

For a discussion about the Firm’s business segments, see Note 23 to the financial statements in the ~~2021~~2022 Form 10-K.


			61			~~March 2022 Form 10-Q~~


~~Table of Contents~~
Notes to Consolidated Financial Statements (Unaudited)

Detail of Investment Banking Revenues


		Three Months Ended March 31,							Three Months Ended March 31,
$ in millions	$ in millions	2022			2021			$ in millions		2023			2022
Institutional Securities Advisory	Institutional Securities Advisory	$	944		$	480		Institutional Securities Advisory		$	638		$	944
Institutional Securities Underwriting	Institutional Securities Underwriting	690			2,133			Institutional Securities Underwriting		609			690
Firm Investment banking revenues from contracts with customers	Firm Investment banking revenues from contracts with customers	90		%	92		%	Firm Investment banking revenues from contracts with customers		89		%	90		%

Trading Revenues by Product Type


		Three Months Ended March 31,					Three Months Ended March 31,
$ in millions	$ in millions	2022		2021		$ in millions		2023		2022
Interest rate	Interest rate	$	391	$	859	Interest rate		$	1,368	$	391
Foreign exchange	Foreign exchange	648		274		Foreign exchange		262		648
Equity1	Equity1	2,007		1,695		Equity1		2,212		2,007
Commodity and other	Commodity and other	525		861		Commodity and other		539		525
Credit	Credit	412		536		Credit		96		412
Total	Total	$	3,983	$	4,225	Total		$	4,477	$	3,983

1.Dividend income is included within equity contracts.

The previous table summarizes realized and unrealized gains and losses, from derivative and non-derivative financial instruments, included in Trading revenues in the income statement. The Firm generally utilizes financial instruments across a variety of product types in connection with its market-making and related risk management strategies. The trading revenues presented in the table are not representative of the manner in which the Firm manages its business activities and are prepared in a manner similar to the presentation of trading revenues for regulatory reporting purposes.

Investment Management Investments Revenues—Net Cumulative Unrealized Carried Interest


$ in millions	$ in millions	At March 31, 2022		At December 31, 2021		$ in millions	At March 31, 2023		At December 31, 2022
Net cumulative unrealized performance-based fees at risk of reversing	Net cumulative unrealized performance-based fees at risk of reversing	$	824	$	802	Net cumulative unrealized performance-based fees at risk of reversing	$	815	$	819

The Firm’s portion of net cumulative performance-based fees in the form of unrealized carried interest, for which the Firm is not obligated to pay compensation, is at risk of reversing when the return in certain funds fall below specified performance targets. See Note 13 for information regarding general partner guarantees, which include potential obligations to return performance fee distributions previously received.

Investment Management Asset Management Revenues—Reduction of Fees Due to Fee Waivers


		Three Months Ended March 31,					Three Months Ended March 31,
$ in millions	$ in millions	2022		2021		$ in millions		2023		2022
Fee waivers	Fee waivers	$	124	$	94	Fee waivers		$	18	$	124

The Firm waives a portion of its fees in the Investment Management business segment from certain registered money


March 2023 Form 10-Q			64


Table of Contents
Notes to Consolidated Financial Statements (Unaudited)

market funds that comply with the requirements of Rule 2a-7 of the Investment Company Act of 1940.

Certain Other Fee Waivers

Separately, the Firm’s employees, including its senior officers, may participate on the same terms and conditions as other investors in certain funds that the Firm sponsors primarily for client investment, and the Firm may waive or lower applicable fees and charges for its employees.

Other ~~Expenses~~—Expenses—Transaction Taxes


		Three Months Ended March 31,					Three Months Ended March 31,
$ in millions	$ in millions	2022		2021		$ in millions		2023		2022
Transaction taxes	Transaction taxes	$	258	$	238	Transaction taxes		$	214	$	258

Transaction taxes are composed of securities transaction taxes and stamp duties, which are levied on the sale or purchase of securities listed on recognized stock exchanges in certain markets. These taxes are imposed mainly on trades of equity securities in Asia and EMEA. Similar transaction taxes are levied on trades of listed derivative instruments in certain countries.

Net Revenues by Region


		Three Months Ended March 31,					Three Months Ended March 31,
$ in millions	$ in millions	2022		2021		$ in millions		2023		2022
Americas	Americas	$	10,464	$	11,191	Americas		$	10,791	$	10,464
EMEA	EMEA	2,311		2,159		EMEA		1,737		2,311
Asia	Asia	2,026		2,369		Asia		1,989		2,026
Total	Total	$	14,801	$	15,719	Total		$	14,517	$	14,801

For a discussion about the Firm’s geographic net revenues, see Note 23 to the financial statements in the ~~2021~~2022 Form 10-K.

Revenues Recognized from Prior Services


		Three Months Ended March 31,					Three Months Ended March 31,
$ in millions	$ in millions	2022		2021		$ in millions		2023		2022
Non-interest revenues	Non-interest revenues	$	1,005	$	541	Non-interest revenues		$	704	$	1,005

The previous table includes revenues from contracts with customers recognized where some or all services were performed in prior periods. These revenues primarily include investment banking advisory fees.

Receivables from Contracts with Customers


$ in millions	$ in millions	At March 31, 2022		At December 31, 2021		$ in millions	At March 31, 2023		At December 31, 2022
Customer and other receivables	Customer and other receivables	$	3,445	$	3,591	Customer and other receivables	$	2,182	$	2,577

Receivables from contracts with customers, which are included within Customer and other receivables in the balance


~~March 2022 Form 10-Q~~			62


~~Table of Contents~~
Notes to Consolidated Financial Statements (Unaudited)

sheet, arise when the Firm has both recorded revenues and the right per the contract to bill the customer.

Assets by Business Segment


$ in millions	$ in millions	At March 31, 2022		At December 31, 2021		$ in millions	At March 31, 2023		At December 31, 2022
Institutional Securities	Institutional Securities	$	826,242	$	792,135	Institutional Securities	$	819,195	$	789,837
Wealth Management	Wealth Management	378,501		378,438		Wealth Management	363,405		373,305
Investment Management	Investment Management	17,490		17,567		Investment Management	17,304		17,089
Total1	Total1	$	1,222,233	$	1,188,140	Total1	$	1,199,904	$	1,180,231

1. Parent assets have been fully allocated to the business segments.


			6365			March ~~2022~~2023 Form 10-Q


Table of Contents
Financial Data Supplement (Unaudited)

Average Balances and Interest Rates and Net Interest Income


		Three Months Ended March 31,													Three Months Ended March 31,
		2022						2021							2023						2022
$ in millions	$ in millions	Average Daily Balance		Interest		Annualized Average Rate		Average Daily Balance		Interest		Annualized Average Rate		$ in millions	Average Daily Balance		Interest		Annualized Average Rate		Average Daily Balance		Interest		Annualized Average Rate
Interest earning assets	Interest earning assets													Interest earning assets
Investment securities1	Investment securities1	$	177,572	$	777	1.8	%	$	187,294	$	849	1.8	%	Investment securities1	$	159,061	$	1,018	2.6	%	$	177,572	$	777	1.8	%
Loans1	Loans1	191,551		1,156		2.4	%	151,636		988		2.6	%	Loans1	214,185		2,815		5.3	%	191,551		1,156		2.4	%
Securities purchased under agreements to resell2,3:
Securities purchased under agreements to resell2:														Securities purchased under agreements to resell2:
U.S.	U.S.	52,389		36		0.3	%	61,935		27		0.2	%	U.S.	46,847		932		8.1	%	52,389		36		0.3	%
Non-U.S.	Non-U.S.	64,150		(23)		(0.1)	%	52,239		(82)		(0.6)	%	Non-U.S.	65,713		545		3.4	%	64,150		(23)		(0.1)	%
Securities borrowed2,4:
Securities borrowed3:														Securities borrowed3:
U.S.	U.S.	122,203		(176)		(0.6)	%	85,341		(196)		(0.9)	%	U.S.	123,206		1,095		3.6	%	122,203		(176)		(0.6)	%
Non-U.S.	Non-U.S.	21,229		(41)		(0.8)	%	15,095		(45)		(1.2)	%	Non-U.S.	18,683		77		1.7	%	21,229		(41)		(0.8)	%
Trading assets, net of Trading liabilities5:
Trading assets, net of Trading liabilities4:														Trading assets, net of Trading liabilities4:
U.S.	U.S.	79,509		430		2.2	%	72,416		410		2.3	%	U.S.	87,631		786		3.6	%	79,509		430		2.2	%
Non-U.S.	Non-U.S.	16,606		94		2.3	%	17,946		100		2.3	%	Non-U.S.	7,264		127		7.1	%	16,606		94		2.3	%
Customer receivables and Other6:
Customer receivables and Other5:														Customer receivables and Other5:
U.S.	U.S.	129,162		355		1.1	%	137,859		337		1.0	%	U.S.	107,055		2,428		9.2	%	129,162		355		1.1	%
Non-U.S.	Non-U.S.	76,545		42		0.2	%	75,177		49		0.3	%	Non-U.S.	69,288		1,047		6.1	%	76,545		42		0.2	%
Total	Total	$	930,916	$	2,650	1.2	%	$	856,938	$	2,437	1.2	%	Total	$	898,933	$	10,870	4.9	%	$	930,916	$	2,650	1.2	%
Interest bearing liabilities	Interest bearing liabilities													Interest bearing liabilities
Deposits1	Deposits1	$	348,916	$	73	0.1	%	$	320,257	$	120	0.2	%	Deposits1	$	346,973	$	1,575	1.8	%	$	348,916	$	73	0.1	%
Borrowings1,7		228,942		685		1.2	%	215,688		714		1.3	%
Securities sold under agreements to repurchase2,8,10:
Borrowings1,6														Borrowings1,6	245,600		2,506		4.1	%	228,942		685		1.2	%
Securities sold under agreements to repurchase7,9:														Securities sold under agreements to repurchase7,9:
U.S.	U.S.	22,979		40		0.7	%	29,661		47		0.6	%	U.S.	21,075		670		12.9	%	22,979		40		0.7	%
Non-U.S.	Non-U.S.	36,148		9		0.1	%	23,215		(10)		(0.2)	%	Non-U.S.	41,071		548		5.4	%	36,148		9		0.1	%
Securities loaned2,9,10:
Securities loaned8,9:														Securities loaned8,9:
U.S.	U.S.	5,489		(1)		(0.1)	%	4,428		(3)		(0.3)	%	U.S.	4,992		13		1.1	%	5,489		(1)		(0.1)	%
Non-U.S.	Non-U.S.	7,771		94		4.9	%	3,848		80		8.4	%	Non-U.S.	10,016		151		6.1	%	7,771		94		4.9	%
Customer payables and Other11:
Customer payables and Other10:														Customer payables and Other10:
U.S.	U.S.	136,407		(368)		(1.1)	%	129,438		(437)		(1.4)	%	U.S.	137,766		2,045		6.0	%	136,407		(368)		(1.1)	%
Non-U.S.	Non-U.S.	74,919		(98)		(0.5)	%	68,782		(102)		(0.6)	%	Non-U.S.	65,818		1,016		6.3	%	74,919		(98)		(0.5)	%
Total	Total	$	861,571	$	434	0.2	%	$	795,317	$	409	0.2	%	Total	$	873,311	$	8,524	4.0	%	$	861,571	$	434	0.2	%
Net interest income and net interest rate spread	Net interest income and net interest rate spread			$	2,216	1.0	%			$	2,028	1.0	%	Net interest income and net interest rate spread			$	2,346	0.9	%			$	2,216	1.0	%

1.Amounts include primarily U.S. balances.

2.~~Certain prior period amounts have been reclassified to conform to the current presentation.~~

3.Includes interest paid on Securities purchased under agreements to resell.

4.3.Includes fees paid on Securities borrowed.

5.4.Excludes non-interest earning assets and non-interest bearing liabilities, such as equity securities.

6.5.Includes Cash and cash equivalents.

7.6.Average daily balance includes borrowings carried at fair value, but for certain borrowings, interest expense is considered part of fair value and is recorded in Trading revenues.

8.7.Includes interest received on Securities sold under agreements to repurchase.

9.8.Includes fees received on Securities loaned.

~~10.~~9.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 sheet and (b) net average on-balance sheet balances, which exclude certain securities-for-securities transactions.

~~11.~~10.Includes fees received from Equity Financing customers related to their short transactions, which can be under either margin or securities lending arrangements.


March ~~2022~~2023 Form 10-Q			6466


Table of Contents
Glossary of Common Terms and Acronyms


~~2021~~2022 Form 10-K			Annual report on Form 10-K for year ended December 31, ~~2021~~2022 filed with the SEC
ABS			Asset-backed securities
ACL			Allowance for credit losses
AFS			Available-for-sale
AML			Anti-money laundering
AOCI			Accumulated other comprehensive income (loss)
AUM			Assets under management or supervision
Balance sheet			Consolidated balance sheet
BHC			Bank holding company
bps			Basis points; one basis point equals 1/100th of 1%
Cash flow statement			Consolidated cash flow statement
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 Losses, as calculated under the Financial Instruments—Credit Losses accounting update
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)
CRM			Credit Risk Management Department
CTA			Cumulative foreign currency translation adjustments

DVA			Debt valuation adjustment
EBITDA			Earnings before interest, taxes, depreciation and amortization

EMEA			Europe, Middle East and Africa
EPS			Earnings per common share

FDIC			Federal Deposit Insurance Corporation
FFELP			Federal Family Education Loan Program

FHC			Financial holding company

FICO			Fair Isaac Corporation
Financial statements			Consolidated financial statements

FVO			Fair value option
G-SIB			Global systemically important banks

HFI			Held-for-investment
HFS			Held-for-sale
HQLA			High-quality liquid assets
HTM			Held-to-maturity
I/E			Intersegment eliminations
IHC			Intermediate holding company
IM			Investment Management
Income statement			Consolidated income statement
IRS			Internal Revenue Service
IS			Institutional Securities


LCR			Liquidity coverage ratio, as adopted by the U.S. banking agencies
LIBOR			London Interbank Offered Rate
LTV			Loan-to-value
M&A			Merger, acquisition and restructuring transaction
MSBNA			Morgan Stanley Bank, N.A.
MS&Co.			Morgan Stanley & Co. LLC
MSCG			Morgan Stanley Capital Group Inc.
MSCS			Morgan Stanley Capital Services LLC
MSEHSE			Morgan Stanley Europe Holdings SE
MSESE			Morgan Stanley Europe SE
MSIP			Morgan Stanley & Co. International plc
MSMS			Morgan Stanley MUFG Securities Co., Ltd.
MSPBNA			Morgan Stanley Private Bank, National Association
MSSB			Morgan Stanley Smith Barney LLC
MUFG			Mitsubishi UFJ Financial Group, Inc.
MUMSS			Mitsubishi UFJ Morgan Stanley Securities Co., Ltd.
MWh			Megawatt hour
N/A			Not Applicable
N/M			Not Meaningful
NAV			Net asset value
Non-GAAP			Non-generally accepted accounting principles
NSFR			Net stable funding ratio, as adopted by the U.S. banking agencies
OCC			Office of the Comptroller of the Currency
OCI			Other comprehensive income (loss)

OTC			Over-the-counter

PSU			Performance-based stock unit

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
SCB			Stress capital buffer
SEC			U.S. Securities and Exchange Commission
SLR			Supplementary leverage ratio
SOFR			Secured Overnight Financing Rate
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. GAAP			Accounting principles generally accepted in the United States of America
VaR			Value-at-Risk
VIE			Variable interest entity
WACC			Implied weighted average cost of capital
WM			Wealth Management


			6567			March ~~2022~~2023 Form 10-Q


Table of Contents

Controls and Procedures

Under the supervision and with the participation of the Firm’s management, including the Chief Executive Officer and Chief Financial Officer, the Firm conducted an evaluation of the effectiveness of the Firm’s disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Based on this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Firm’s disclosure controls and procedures were effective as of the end of the period covered by this report.

No change in the Firm’s internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) occurred during the period covered by this report that materially affected, or is reasonably likely to materially affect, the Firm’s internal control over financial reporting.

Legal Proceedings

The following developments have occurred since previously reporting certain matters in the Firm’s ~~2021~~2022 Form 10-K. See also the disclosures set forth under “Legal Proceedings” in the ~~2021~~2022 Form 10-K.

Block Trading Matter

The Firm is currently engaged in discussions regarding potential resolution of the investigations by the Enforcement Division of the U.S. Securities and Exchange Commission and the United States Attorney’s Office for the Southern District of New York into various aspects of the Firm’s blocks business, certain related sales and trading practices, and applicable controls. There can be no assurance that these discussions and continuing engagement will lead to resolution of either matter.

Residential Mortgage ~~Related~~and Credit Crisis Matters

On March ~~29, 2022,~~ 1, 2023, the court in IKB International S.A. in Liquidation, et al. v. Morgan Stanley, et al. granted in part and denied in part the Firm’s motion for summary judgment, narrowing the alleged misrepresentations at issue in the case. In March 2023, both parties appealed the decision.

On March 3, 2023, the parties in Deutsche Bank National Trust Company, as Trustee for the Morgan Stanley ABS Capital I Inc. Trust, Series 2007-NC1 v. Morgan Stanley ABS Capital I, Inc. executed an agreement to settle the litigation.

On March 3, 2023, the parties in ~~its capacity as trustee, announced that the certificateholders participating in the consent solicitation had approved the settlement agreement in~~ Deutsche Bank National Trust Company, solely in its capacity as Trustee ~~of the~~for Morgan Stanley ABS Capital I Inc. Trust, ~~2007-NC4~~Series 2007-NC3 v. Morgan Stanley Mortgage Capital Holdings LLC, as Successor-by-Merger to Morgan Stanley Mortgage Capital Inc., and Morgan Stanley ABS Capital I Inc. The Trustee unconditionally accepted the financial terms of that settlement on April 18, 2022, which caused the settlement to become final and binding on all parties. On April 27, 2022, the parties filed a stipulation of voluntary discontinuance, dismissing the action with prejudice.

~~On April 27, 2022, the parties’~~Inc. executed an agreement to settle ~~Financial Guaranty Insurance Company~~the litigation.

European Matter

In connection with the Dutch tax matters, the Dutch criminal authorities have requested additional information, and the Firm is continuing to respond to them in connection with their ongoing investigation.

Other

On March 10, 2023, the plaintiff in Camelot Event Driven Fund, a Series of Frank Funds Trust v. Morgan Stanley ~~ABS Capital I Inc.~~& Co. LLC, et al. ~~became final and binding after Deutsche Bank National Trust Company solely in its capacity as Trustee~~ filed a Notice of Appeal of the ~~Morgan Stanley ABS Capital I Inc. Trust 2007-NC4 v. Morgan Stanley Mortgage Capital Holdings LLC as Successor-by-Merger to Morgan Stanley Mortgage Capital Inc.,~~dismissal of Viacom and ~~Morgan Stanley ABS Capital I Inc. was voluntarily dismissed.~~

~~Block Trading Matter~~

~~In addition to~~ the investigations noted in the Firm’s 2021 Form 10-K, the Firm faces potential civil liability arising from claims that have been or may be asserted by block transaction participants or others who contend they were harmed or

~~disadvantaged including, among other things, as a result of a share price decline allegedly caused by the activities of the Firm and/or its employees.~~

~~Record Keeping Matter~~

The Firm has been responding to requests for information from regulators concerning its compliance with record-keeping requirements in connection with business communications on messaging platforms that have not been approved by the Firm, and is engaging in efforts to resolve such matters.individual Viacom defendants.

Risk Factors

For a discussion of the risk factors affecting the Firm, see “Risk Factors” in Part I, Item 1A of the ~~2021~~2022 Form 10-K.

Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities


$ in millions, except per share data	$ 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		$ in millions, except per share data	Total Number of Shares Purchased1	Average Price Paid per Share2		Total Shares Purchased as Part of Share Repurchase Authorization3,4	Dollar Value of Remaining Authorized Repurchase
January	January	11,020,364	$	96.80	3,796,900	$	5,235	January	8,974,630	$	96.61	2,725,102	$	15,484
February	February	14,022,622	$	100.23	12,855,200	$	3,940	February	7,212,253	$	98.48	6,284,841	$	14,865
March	March	13,586,163	$	88.94	13,514,500	$	2,738	March	6,830,645	$	92.29	6,752,720	$	14,245
Three Months Ended March 31, 2022		38,629,149	$	95.28	30,166,600
Three Months Ended March 31, 2023								Three Months Ended March 31, 2023	23,017,528	$	95.91	15,762,663

1.Includes ~~8,462,549~~7,254,865 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 March 31, ~~2022.~~2023.

2.Includes excise tax levied on share repurchases, net of issuances, payable in April 2024.

3.Share purchases under publicly announced ~~programs~~authorizations 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.

3.4.The Firm’s Board of Directors has ~~authorized~~approved the repurchase of the Firm’s outstanding common stock under a share repurchase ~~program~~authorization (the “Share Repurchase ~~Program”~~Authorization”) from time to time as conditions warrant and subject to limitations on distributions from the Federal Reserve. The Share Repurchase ~~Program~~Authorization is ~~a program~~ for capital management purposes ~~that~~and considers, among other things, business segment capital needs, as well as equity-based compensation and benefit plan requirements. The Share Repurchase ~~Program~~Authorization has no set expiration or termination date.

On June ~~28, 2021,~~27, 2022, the Firm announced that its Board of Directors ~~authorized the~~approved a new multi-year repurchase authorization of up to ~~$12~~$20 billion of outstanding common stock, ~~from July 1, 2021 through June 30,~~without a set expiration date, beginning in the third quarter of 2022, which will be exercised from time to time as conditions warrant. ForFor further information, see “Liquidity and Capital Resources—Regulatory Requirements—Capital Plans, Stress Tests and the Stress Capital Buffer.”

~~Other Information~~

~~None.~~


March ~~2022~~2023 Form 10-Q			6668


Table of Contents

Other Information

On April 26, 2023, the Compensation, Management Development and Succession Committee of the Company’s Board of Directors approved that Raja J. Akram, Deputy Chief Financial Officer, Chief Accounting Officer and Controller, be treated as retirement-eligible for purposes of any year-end deferred incentive compensation awards and, accordingly, any such awards will vest upon Mr. Akram’s resignation of employment from the Company, subject to certain conditions, and remain subject to all other provisions of the awards, including specified cancellation and clawback provisions, until the applicable distribution date.

Exhibits


Exhibit No.			Description

15			Letter of awareness from Deloitte & Touche LLP, dated ~~May 4, 2022~~M ay 2 , 2023 , concerning unaudited interim financial information.
31.1			Rule 13a-14(a) Certification of Chief Executive Officer.
31.2			Rule 13a-14(a) Certification of Chief Financial Officer.
32.1			Section 1350 Certification of Chief Executive Officer.
32.2			Section 1350 Certification of Chief Financial Officer.
101			Interactive Data Files pursuant to Rule 405 of Regulation S-T formatted in Inline eXtensible Business Reporting Language (“Inline XBRL”).
104			Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101).

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


MORGAN STANLEY (Registrant)

By:			/s/ SHARON YESHAYA
			Sharon Yeshaya Executive Vice President and Chief Financial Officer

By:			/s/ RAJA J. AKRAM
			Raja J. Akram Deputy Chief Financial Officer, Chief Accounting Officer and Controller

Date: May ~~4, 2022~~2, 2023


			6769			March ~~2022~~2023 Form 10-Q


	Years to Maturity at December 31, 2021
$ in billions	< 1		1-3		3-5		Over 5		Total
Single-name CDS
Investment grade	$	10	$	26	$	29	$	9	$	74
Non-investment grade	5		13		17		2		37
Total	$	15	$	39	$	46	$	11	$	111
Index and basket CDS
Investment grade	$	2	$	11	$	106	$	15	$	134
Non-investment grade	9		14		37		12		72
Total	$	11	$	25	$	143	$	27	$	206
Total CDS sold	$	26	$	64	$	189	$	38	$	317
Other credit contracts	—		—		—		—		—
Total credit protection sold	$	26	$	64	$	189	$	38	$	317
CDS protection sold with identical protection purchased									$	278


	At March 31, 2022		At December 31, 2021
ACL to total loans1	0.4	%	0.4	%
Nonaccrual loans to total loans2	0.4	%	0.5	%
ACL to nonaccrual loans3	92.4	%	73.2	%


	At March 31, 2022
$ in millions	RML		CML		U.S. Agency CMO		CLN and Other1
SPE assets (UPB)2	$	8,677	$	101,928	$	33,602	$	12,574
Retained interests
Investment grade	$	96	$	754	$	363	$	—
Non-investment grade	26		576		—		57
Total	$	122	$	1,330	$	363	$	57
Interests purchased in the secondary market
Investment grade	$	55	$	65	$	134	$	4
Non-investment grade	44		49		—		2
Total	$	99	$	114	$	134	$	6
Derivative assets	$	—	$	—	$	—	$	1,050
Derivative liabilities	—		—		—		185


	Fair Value At March 31, 2022
$ in millions	Level 2		Level 3		Total
Retained interests
Investment grade	$	461	$	—	$	461
Non-investment grade	11		45		56
Total	$	472	$	45	$	517
Interests purchased in the secondary market
Investment grade	$	250	$	8	$	258
Non-investment grade	60		35		95
Total	$	310	$	43	$	353
Derivative assets	$	1,050	$	—	$	1,050
Derivative liabilities	140		45		185


	Fair Value at December 31, 2021
$ in millions	Level 2		Level 3		Total
Retained interests
Investment grade	$	536	$	2	$	538
Non-investment grade	40		40		80
Total	$	576	$	42	$	618
Interests purchased in the secondary market
Investment grade	$	168	$	1	$	169
Non-investment grade	70		25		95
Total	$	238	$	26	$	264
Derivative assets	$	891	$	—	$	891
Derivative liabilities	194		90		284