Morgan Stanley 2015 Annual Report Download - page 64

Other.
• Other revenues of $255 million in 2015 decreased 20% from the prior year primarily due to a $40 million gain on
sale of a retail property space in the prior year and an increase in the allowance for credit losses in 2015.
Non-interest Expenses.
Non-interest expenses of $11,768 million in 2015 decreased 1% from the prior year primarily due to lower Compensation
and benefit expenses partially offset by higher Non-compensation expenses.
• Compensation and benefits expenses decreased primarily due to the 2014 compensation actions, a decrease in the
fair value of deferred compensation plan referenced investments and a decrease in the level of discretionary
incentive compensation in 2015 (see also “Supplemental Financial Information and Disclosures—Discretionary
Incentive Compensation” herein).
• Non-compensation expenses increased primarily due to an increase in Professional services, resulting from
increased consulting and legal fees partially offset by a provision related to a rescission offer in the prior year. Other
expenses in 2014 included $50 million related to a rescission offer to Wealth Management clients who may not have
received a prospectus for certain securities transactions, for which delivery of a prospectus was required.
2014 Compared with 2013.
Net Revenues.
Asset Management.
• Asset management, distribution and administration fees of $8,345 million in 2014 increased 10% from the prior
year primarily due to higher fee-based revenues partially offset by lower revenues from referral fees from the bank
deposit program. The referral fees for deposits placed with Citi-affiliated depository institutions declined to $81
million in 2014 from $240 million in 2013, reflecting the transfer of deposits to the Company from Citi.
Net Interest.
• Net interest of $2,339 million in 2014 increased 25% from the prior year primarily due to higher lending balances
and growth in loans and lending commitments in Portfolio Loan Account (“PLA”) securities-based lending
products.
Other.
• Other revenues of $320 million in 2014 decreased 18% from the prior year primarily as a result of a gain on sale of
the U.K. operation of the Global Stock Plan Services business in 2013 and lower account fees. The results for Other
revenues in 2014 included a $40 million gain on sale of a retail property space.
Non-interest Expenses.
Non-interest expenses of $11,903 million in 2014 increased 3% from the prior year primarily due to higher Compensation
and benefit expenses partially offset by lower Non-compensation expenses.
• Compensation and benefits expenses increased primarily due to a higher formulaic payout to Wealth Management
representatives linked to higher net revenues and an increase in base salaries.
• Non-compensation expenses decreased in 2014 primarily driven by technology write-offs and an impairment
expense related to certain intangible assets (management contracts) associated with alternative investments funds in
2013, lower intangible amortization and a lower Federal Deposit Insurance Corporation (“FDIC”) assessment on
deposits partially offset by a provision in 2014 related to a rescission offer to Wealth Management clients.
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