Morgan Stanley(US:MS)2026-01-15 14:32Financial Data and Key Metrics Changes - In 2025, the company achieved record full-year revenues of $70.6 billion and fourth-quarter revenues of $17.9 billion, supported by expanding markets and increasing client demand for advice [31] - The return on tangible common equity (ROTCE) was 21.6% for the full year, with fourth-quarter ROTCE at 21.8% and earnings per share (EPS) reaching $10.21 for the full year and $2.68 for the fourth quarter [32] - The efficiency ratio improved to 68.4% for the full year, indicating disciplined execution and prioritization of investments [32] Business Line Data and Key Metrics Changes - Institutional Securities delivered record full-year revenues of $33.1 billion, including $7.9 billion in the fourth quarter, with strong growth in Investment Banking revenues of $7.6 billion for the full year [33] - Wealth Management achieved full-year revenues of $31.8 billion with margins of 29%, and net new assets of $356 billion for the year [38] - Investment Management generated total revenues of $6.5 billion, reaching a record $1.9 trillion in assets under management (AUM) [46] Market Data and Key Metrics Changes - 25% of the company's revenues came from outside the U.S., with EMEA revenues growing by 40% and Asia by 50% over the last two years [22] - The company has a strong presence in Japan and Hong Kong, with significant growth in the EU and maintained leadership in the U.K. [22] Company Strategy and Development Direction - The company is focused on executing its strategy of being an integrated firm, leveraging technology and human capital across its three business segments: Wealth, Institutional Securities, and Investment Management [15][29] - There is an emphasis on the adoption of AI tools to enhance efficiency and effectiveness across business units [15] - The company aims to compound earnings in a capital-efficient manner while maintaining a strong focus on client relationships and market share [12][29] Management's Comments on Operating Environment and Future Outlook - The management highlighted a resilient U.S. economy and a favorable macro backdrop, with expectations of continued execution at or above firm-wide goals in 2026 [5][7] - There is caution regarding geopolitical uncertainties and higher asset prices, with a focus on not overreaching despite achieving many firm-wide goals [12][29] - The management expressed confidence in the potential for growth in both the Wealth and Investment Management businesses, supported by healthy pipelines and client engagement [49] Other Important Information - The company raised its quarterly dividend to $1 per share, marking four consecutive years of dividend growth [27] - The firm bought back $4.6 billion of common stock in 2025, including $1.5 billion in the fourth quarter [49] Q&A Session Questions and Answers Question: Why no change for the targets despite strong results? - The management emphasized the importance of demonstrating the ability to compound earnings through cycles and maintaining a conservative approach to setting targets [54][56] Question: What are the drivers of margin growth in Wealth Management? - The management indicated that both scaling the business and improving efficiency through technology and fee-based revenues are key drivers for margin growth [61][63] Question: How does the company view the trading business and its future? - The management acknowledged the trading business's current strong performance but noted the potential for volatility in the future, emphasizing the importance of managing risks [100][102] Question: What is the outlook for wallet expansion in institutional trading? - The management expressed optimism about the growth of the wallet, projecting a 5%-10% annual increase, supported by ongoing share gains from established firms [91]