Morgan Stanley Q4 Earnings Beat on IB Strength, Decent Trading Gains

Core Insights - Morgan Stanley's fourth-quarter 2025 earnings per share reached $2.68, exceeding the Zacks Consensus Estimate of $2.41, marking a 21% increase from the previous year [1][9] Investment Banking Performance - Morgan Stanley's investment banking business benefited from increased deal-making and IPO activities, with advisory fees rising 45% year over year and total investment banking fees surging 47% to $2.41 billion [2][9] - Fixed income underwriting fees jumped 93%, while equity underwriting income grew 9% due to higher convertible offerings and IPOs [2] Trading Performance - Equity trading revenues increased by 10% year over year to $3.67 billion, while fixed-income trading income decreased by 9% to $1.76 billion [3] Wealth and Investment Management - Wealth management and investment management segments showed strong performance, with net income applicable to common shareholders rising 19% to $4.25 billion [4] - Total client assets reached $7.38 trillion, up 19% year over year, contributing to a 13% increase in wealth management revenue [7][9] Financial Metrics - Quarterly net revenues were $17.89 billion, a 10% increase from the prior year, surpassing the Zacks Consensus Estimate of $17.32 billion [5] - Net interest income (NII) rose to $2.86 billion, up 12%, while total non-interest expenses increased by 8% to $12.11 billion [5] Segment Performance - Institutional Securities reported pre-tax income of $2.66 billion, up 9% year over year, with net revenues of $7.93 billion [6] - Investment Management's pre-tax income climbed 13% to $468 million, with net revenues growing 5% to $1.72 billion [7] Capital Position - As of December 31, 2025, Morgan Stanley's book value per share was $64.37, up from $58.98 a year earlier, and the Tier 1 capital ratio improved to 18% [10] Share Buyback - In the reported quarter, Morgan Stanley repurchased 9 billion shares for $1.5 billion [11]