Morgan Stanley(US:MS)2025-05-05 20:13Financial Performance - The company reported net revenues of $17.7 billion for Q1 2025, a 17% increase from $15.1 billion in Q1 2024[23]. - Net income applicable to the company was $4.3 billion, reflecting a 26% increase compared to $3.4 billion in the prior year quarter[23]. - Diluted earnings per common share rose to $2.60, up 29% from $2.02 in the prior year quarter[23]. - Net revenues for the three months ended March 31, 2025, increased to $17,739 million, up 17.3% from $15,136 million in the same period of 2024[40]. - Earnings applicable to common shareholders rose to $4,157 million, representing a 27.2% increase from $3,266 million year-over-year[40]. - Earnings per diluted common share increased to $2.60, compared to $2.02 in the prior year, reflecting a 28.7% growth[40]. - Return on equity (ROE) increased to 17.4%, up from 14.5% in the prior year, while return on tangible common equity (ROTCE) rose to 23.0% from 19.7%[40]. - Net income applicable to Morgan Stanley increased by 39% to $2,529 million from $1,819 million in the prior year[61]. Revenue Breakdown - Institutional Securities generated net revenues of $9.0 billion, driven by strong performance in Equity and Investment Banking[27]. - Wealth Management achieved net revenues of $7.3 billion, with a pre-tax margin of 26.6 and net new asset additions of $94 billion[27]. - Investment Management reported net revenues of $1.6 billion, primarily from asset management fees on average AUM of $1.7 trillion[27]. - Total net revenues increased by 28% to $8,983 million in Q1 2025 compared to $7,016 million in Q1 2024[61]. - Advisory revenues rose by 22% to $563 million, while Equity underwriting revenues decreased by 26% to $319 million[61]. - Fixed Income revenues increased by 22% to $677 million, contributing to total Investment Banking revenues of $1,559 million, an 8% increase year-over-year[63]. - Wealth Management net revenues grew by 6% to $7,327 million, driven by a 15% increase in asset management revenues to $4,396 million[80]. Expenses and Efficiency - The company’s expense efficiency ratio was 68%, with non-compensation expenses increasing by 12% to $4.5 billion due to higher execution-related expenses[27][28]. - The expense efficiency ratio improved to 68%, down from 71% in the previous year, indicating better cost management[40]. - Non-interest expenses rose by 20% to $5,611 million, primarily due to increased compensation and benefits expenses[77]. - Non-interest expenses rose by 5% to $5,332 million, mainly due to higher compensation and benefits expenses[95]. Credit and Risk Management - The provision for credit losses was $135 million, reflecting portfolio growth and a weaker macroeconomic outlook[29]. - Provision for credit losses increased to $91 million, reflecting portfolio growth and a deteriorating macroeconomic outlook[75]. - Provision for credit losses was $44 million, primarily related to specific loans, compared to a net release of $8 million in the prior year quarter[94]. Assets and Capital - Total assets increased to $1,300,296 million, up from $1,215,071 million at the end of 2024, reflecting a growth of 7%[40]. - Total assets under management (AUM) reached $1,669 billion, up from $1,479 billion in the prior year[110]. - CET1 capital increased to $76,975 million at March 31, 2025, up from $75,095 million at December 31, 2024, representing a growth of 2.5%[180]. - Total capital rose to $97,772 million at March 31, 2025, compared to $95,567 million at December 31, 2024, reflecting an increase of 2.3%[183]. - Total Risk-Weighted Assets (RWA) reached $502,622 million at March 31, 2025, up from $489,316 million at December 31, 2024, indicating a rise of 2.7%[184]. Liquidity and Funding - Average liquidity resources for the five months ended March 31, 2025, were $351,740 million, compared to $345,440 million at the end of 2024[40]. - Cash deposits with banks averaged $351.7 billion for the three months ended March 31, 2025, compared to $345.4 billion for the previous quarter, reflecting a growth of 1.0%[134]. - The Liquidity Coverage Ratio (LCR) stood at 130% as of March 31, 2025, consistent with the previous quarter's LCR of 130%[141]. - The company maintained sufficient liquidity resources to meet current and contingent funding obligations as modeled in its Liquidity Stress Tests[131]. Shareholder Returns - The company repurchased 8 million shares at an average price of $125.88 per share during the three months ended March 31, 2025, compared to 12 million shares at $86.79 in the same period last year[163]. - The common stock dividend announced on April 11, 2025, is $0.925 per share, payable on May 15, 2025[165]. Regulatory Compliance - The company is in compliance with all Total Loss-Absorbing Capacity (TLAC) requirements, with external TLAC at $268,879 million as of March 31, 2025[187]. - The Stress Capital Buffer (SCB) remains at 6.0% through September 30, 2025, contributing to a required CET1 ratio of 13.5%[192]. - The company plans to submit its capital plan and stress test results as part of the Federal Reserve's annual CCAR framework[191].