Morgan Stanley Q4 Earnings Call Highlights

Morgan Stanley (NYSE:MS) executives emphasized “durable performance” and discipline on the company’s fourth quarter and full-year 2025 earnings call, pointing to record revenue, strong returns, continued share gains in Institutional Securities, and accelerating asset growth in wealth management. Management also underscored a cautious posture toward the macro and geopolitical backdrop, even as it highlighted constructive early-2026 tailwinds from fiscal and monetary policy.

Full-year 2025 results: record revenue, strong returns, and improving efficiency

Chairman and CEO Ted Pick said the firm’s results over the past eight quarters provide a “blueprint” for Morgan Stanley’s model, which he described as operating “on a higher plane” through the cycle. For 2025, the firm reported $9.3 trillion in total client assets, earnings per share of $10.21, and a return on tangible common equity (ROTCE) of 21.6%.

Chief Financial Officer Sharon Yeshaya said 2025 produced record revenues of $70.6 billion, with fourth quarter revenue of $17.9 billion. She reported fourth quarter ROTCE of 21.8% and EPS of $2.68. The firm’s full-year efficiency ratio improved to 68.4%, which Yeshaya described as reflecting disciplined execution while continuing to invest for growth and pursue productivity initiatives.

Wealth management: record margins, strong flows, and loan/deposit growth

Management pointed to wealth management as a key driver of the firm’s scale strategy, supported by its financial advisor channel, Workplace, and E*TRADE. Pick said wealth posted more than $350 billion of net new assets in 2025, and the firm highlighted a five-year track record of more than $1.6 trillion in net new assets with a doubling of fee-based flows.

Yeshaya reported wealth management delivered full-year record revenues of $31.8 billion and a reported margin of 29%. For the fourth quarter, wealth management revenues were a record $8.4 billion and the reported margin expanded to 31.4%. She noted that DCP negatively impacted the quarterly margin by approximately 95 basis points.

Key wealth metrics cited on the call included:

• Full-year net new assets of $356 billion and fee-based flows of $160 billion.
• Fourth quarter net new assets of $122 billion, with contributions across all channels.
• Third consecutive quarter of fee-based flows exceeding $40 billion, which management said was a first for the industry.
• Bank lending balances up $7 billion sequentially to $181 billion, driven by securities-based lending and mortgages.
• Total period deposits up $10 billion sequentially to $408 billion, with net interest income (NII) rising to $2.1 billion in the quarter.

On NII, Yeshaya said the firm expects first-quarter NII to remain “roughly flat” quarter over quarter, as higher average sweeps and lending balances offset the full impact of two rate cuts in the fourth quarter. Looking further into 2026, she said that assuming the current forward curve, incremental loan growth, and projected deposit mix, the firm expects NII to “continue to trend higher.”

Management also discussed planned changes tied to DCP, including transitioning economic hedges for DCP obligations to derivative instruments during the first quarter and increasing the cash component of advisor compensation. Yeshaya said the goal is to reduce accounting-driven volatility in revenues and earnings, noting there will be transitional costs.

Institutional Securities: investment banking recovery and strong equities

Institutional Securities delivered record full-year revenues of $33.1 billion, including $7.9 billion in the fourth quarter, according to Yeshaya. Pick said the firm gained 100 basis points of wallet share across investment banking and markets, and he highlighted share gains across underwriting and equities trading.

Investment banking revenues were $7.6 billion for the year, with fourth quarter revenues of $2.4 billion, up 47% from the prior year. Yeshaya said results were led by a record in debt underwriting and advisory revenue crossing $1 billion for the second strongest quarter ever. She added that equity issuance—led by convertibles and IPOs—remained strong, driving consistent results in equity underwriting. Looking ahead, she said investment banking pipelines were “healthy, global, and diversified,” and that strategic activity is accelerating as companies and sponsors look to access capital for growth and as the IPO market reopens.

In equities, Yeshaya reported record full-year revenues of $15.6 billion, with $3.7 billion in the fourth quarter. She said prime brokerage revenues drove quarterly results and that rising client balances supported the outlook for financing revenues. In fixed income, full-year revenues were $8.7 billion and fourth quarter revenues were $1.8 billion. Yeshaya attributed the quarter-over-quarter decline to lower volatility in foreign exchange, weaker credit corporate performance, and lower power and gas revenues versus the prior-year quarter, which had benefited from several large structured transactions.

Capital, buybacks, and a disciplined stance on targets

Pick stressed that despite meeting or exceeding many firm-wide goals in 2025, management does not believe “this is not the time to overreach,” citing global uncertainties and higher asset prices. In the Q&A, he said the firm chose not to raise targets simply because it achieved them, emphasizing a preference for compounding earnings “again and again right through the cycle” and aiming for “higher lows” during tougher environments.

On the balance sheet, Yeshaya said total spot assets were $1.4 trillion and standardized RWAs increased sequentially to $553 billion. The standardized CET1 ratio ended the year at 15%. Pick said the firm had “over 300 basis points of excess capital.”

Capital return remained a focus. Yeshaya said Morgan Stanley repurchased $4.6 billion of common stock during the year, including $1.5 billion in the fourth quarter. Pick said “prudent dividend growth comes first,” noting the quarterly dividend has been raised for four years in a row to $1 per share. He also said the firm will continue to buy back stock opportunistically while keeping a “high bar” for acquisitions, citing the effort required to integrate prior deals including Smith Barney, Solium, E*TRADE, and Eaton Vance.

Executives also repeatedly pointed to expanding use of AI across the enterprise, describing both efficiency opportunities (including examples in operations and document review) and revenue tools such as LeadIQ to help connect advisors with clients seeking advice. However, Pick cautioned there would be “teething pain” as the technology and regulatory environment evolve.

About Morgan Stanley (NYSE:MS)

Morgan Stanley (NYSE: MS) is a global financial services firm headquartered in New York City. Founded in 1935 by Henry S. Morgan and Harold Stanley, the company provides a broad range of investment banking, securities, wealth management and investment management services to corporations, governments, institutions and individual investors. Leadership has been guided by a senior executive team and board of directors; James P. Gorman has served as the company’s chief executive and chairman in recent years.

The firm’s primary business activities are organized around three principal businesses: Institutional Securities, Wealth Management and Investment Management.