MORGAN STANLEY
For the period ended Dec 31, 2024. Filed Feb 21, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Feb 21, 2025
MS$181.44-0.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-02-22.
0000895421-24-000300
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsIntroductionExecutive SummaryBusiness SegmentsInstitutional SecuritiesWealth ManagementInvestment ManagementSupplemental Financial InformationOther MattersAccounting Development UpdatesCritical Accounting EstimatesLiquidity and Capital ResourcesBalance SheetRegulatory RequirementsQuantitative and Qualitative Disclosures about RiskRisk ManagementMarket RiskCredit RiskCountry and Other RisksFinancial Statements and Supplementary DataReport of Independent Registered Public Accounting FirmConsolidated Income StatementConsolidated Comprehensive Income StatementCurrent report: 10-K
Period ended 2024-12-31; filed 2025-02-21.
0000895421-25-000304
IntroductionExecutive SummaryBusiness SegmentsInstitutional SecuritiesWealth ManagementInvestment ManagementSupplemental Financial InformationOther MattersAccounting Development UpdatesCritical Accounting EstimatesLiquidity and Capital ResourcesBalance SheetRegulatory RequirementsQuantitative and Qualitative Disclosures about RiskRisk ManagementMarket RiskCredit RiskCountry and Other RisksFinancial Statements and Supplementary DataReport of Independent Registered Public Accounting FirmConsolidated Income StatementConsolidated Comprehensive Income StatementThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 901 previous paragraphs and 896 current paragraphs.
637 unchanged; 166 reworded; 65 added; 73 removed; 25 previous and 28 current paragraphs rearranged.
Tables are not compared: 95 previous and 95 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (65)
Current report
•The Firm reported net revenues of $61.8 billion and net income of $13.4 billion, reflecting strong results across our business segments.
Current report
•Institutional Securities net revenues of $28.1 billion reflect higher results across businesses and regions on higher client activity and improved market conditions.
Current report
•Wealth Management delivered net revenues of $28.4 billion, reflecting higher Asset management and Transactional revenues. The pre-tax margin was 27.2%. Fee-based asset flows were $123 billion and the business added net new assets of$252 billion.
Current report
•Investment Management reported net revenues of $5.9 billion, primarily driven by asset management revenueson higher average AUM.
Current report
•We reported net revenues of $61.8 billion in 2024, which increased by 14% compared with $54.1 billion in 2023. Net income applicable to Morgan Stanley was $13.4 billion in 2024, which increased by 47% compared with $9.1 billion in 2023. Diluted earnings per common share was $7.95 in 2024, which increased by 53% compared with $5.18 in 2023.
Current report
•Compensation and benefits expenses of $26,178 million in 2024 increased 7% from the prior year, primarily due to an increase in the formulaic payout to Wealth Management representatives and higher discretionary incentive compensation, both on higher revenues, partially offset by lower severance costs.
Current report
In 2023, Compensation and benefits expenses included severance costs of $353 million, primarily associated with a specific Firmwide reduction in workforce during the second quarter of 2023. We recorded severance costs of $220 million in the Institutional Securities business segment, $105 million in the Wealth Management business segment, and $28 million in the Investment Management business segment for 2023.
Current report
In 2022, Compensation and benefits expenses included severance costs of $133 million, associated with a specific Firmwide reduction in workforce during the fourth quarter of 2022. We recorded severance costs of $88 million in the Institutional Securities business segment, $30 million in the Wealth Management business segment, and $15 million in the Investment Management business segment for 2022. These specific reductions in workforce occurred across the Firm’s business segments and geographic regions, impacted approximately 4% and 1% of the Firm’s global workforce in 2023 and 2022, respectively, and resulted from the Firm’s review of its global workforce, operating expenses and the business environment following the acquisitions of ETRADE Financial Corporation (“ETRADE”) and Eaton Vance Corp. (“Eaton Vance”), rather than a change in strategy or exit of businesses. These costs were primarily incurred in the Americas and EMEA, with the majority in the Americas.
Current report
•Non-compensation expenses of $17,723 million in 2024 increased 3% from the prior year, primarily driven by higher execution-related expenses and increased technology spend, partially offset by lower legal expenses and lower FDIC special assessment cost.
Current report
In 2023, integration-related expenses were $293 million, of which $201 million related to the integration of ETRADE within the Wealth Management business segment and $92 million related to the integration of Eaton Vance within the Investment Management business segment. In 2022, integration-related expenses were $470 million, of which $357 million related to the integration of ETRADE within the Wealth Management business segment and $113 million related to the integration of Eaton Vance within the Investment Management business segment. Integration-related expenses primarily included non-compensation expenses such as information technology expense related to the consolidation of platforms, and professional fees related to changes in legal entity structures and the integration of clients, within both Wealth Management and Investment Management business segments. Integration-related activities were substantially completed as of December 31, 2023.
Current report
•EMEA net revenues in 2024 increased 19% from the prior year, primarily driven by higher results across businesses within the Institutional Securities business segment.
Current report
•Asia net revenues in 2024 increased 19% from the prior year, primarily driven by higher results from Equity and Investment Banking within the Institutional Securities business segment.
Current report
The economic environment, client and investor confidence and overall market sentiment improved in 2024. While interest rates declined in recent months, elevated inflation, geopolitical risks including ongoing tensions in the Middle East, uncertainties surrounding government and policy developments in the markets we operate in and the timing and pace of further interest rate actions present ongoing risks to the economic environment. These factors have impacted, and could continue to impact capital markets and our businesses, as discussed further in “Business Segments” herein.
Current report
Tangible common equity is a non-GAAP financial measure that we believe analysts, investors and other stakeholders consider useful to allow for comparability to peers and of the period-to-period use of our equity. The calculation of tangible common equity represents common shareholders’ equity less goodwill and intangible assets net of allowable mortgage servicing rights deduction. In addition, we believe that certain ratios that utilize tangible common equity, such as return on average tangible common equity (“ROTCE”) and tangible book value per common share, also non-GAAP financial measures, are useful for evaluating the operating performance and capital adequacy of the business period-to-period, respectively. The calculation of ROTCE represents annualized earnings applicable to Morgan Stanley common shareholders as a percentage of average tangible common equity. The calculation of tangible book value per common share represents tangible common equity divided by common shares outstanding.
Current report
Net revenues of $6,170 million in 2024 increased 35% compared with the prior year, reflecting an increase in underwriting and Advisory revenues.
Current report
While Investment Banking results improved from the prior year, we continue to operate in a market environment with lower completed M&A activity relative to longer-term averages.
Current report
Net revenues of $12,230 million in 2024 increased 22% compared with the prior year, reflecting an increase in both Execution services and Financing, particularly in Asia and the Americas.
Current report
Net revenues of $8,418 million in 2024 increased 10% compared with the prior year, reflecting an increase across businesses, particularly in Credit and Global macro products.
Current report
•Global macro products increased primarily due to lower losses on foreign exchange products and higher gains on rates products, on inventory held to facilitate client activity.
Current report
•Credit products revenues increased primarily due to higher lending and securitized products revenues and lower losses
Current report
on inventory held to facilitate client activity in corporate credit products.
Current report
•Compensation and benefits expenses increased primarily reflecting higher discretionary incentive compensation on higher revenues, partially offset by lower severance costs.
Current report
•Non-compensation expenses increased primarily reflecting higher execution-related expenses and increased technology spend, partially offset by lower legal expenses and lower FDIC special assessment cost.
Current report
Transactional revenues of $3,864 million in 2024 increased 9% compared with the prior year, reflecting higher client activity particularly in equity-related transactions.
Current report
Net interest revenues of $7,313 million in 2024 decreased 10% compared with the prior year, primarily due to lower average sweep deposits, partially offset by higher yields on our investment portfolio and lending growth.
Current report
•Compensation and benefits expenses increased, primarily due to an increase in the formulaic payout to Wealth Management representatives on higher compensable revenues.
Current report
•Non-compensation expenses decreased, primarily driven by lower professional services and legal expenses and lower FDIC special assessment cost, partially offset by higher technology spend.
Current report
Includes Investments and Trading, Net interest and Other revenues.
Current report
Asset management and related fees of $5,627 million in 2024 increased 8% compared with the prior year, primarily driven by higher average AUM on higher market levels.
Current report
Non-interest expenses of $4,724 million in 2024 increased 4% from the prior year, as a result of higher Non-compensation and Compensation and benefits expenses.
Current report
•Non-compensation expenses increased primarily due to higher distribution expenses on higher AUM.
Current report
•Disaggregation of Income Statement Expenses. This update requires quantitative and qualitative disclosure of certain expense categories contained within their relevant expense lines in the income statement, including but not limited to: (1) employee compensation; (2) depreciation; and (3) intangible asset amortization. The update requires the disaggregation of these expense lines in a tabular format in the notes to the financial statements, including the separate disclosure of certain other expenses and gains or losses included within these expense lines which are required under existing U.S. GAAP, with all other expenses permitted to be disclosed in an “other items” category. Additionally, the update requires disclosure of the total amount and definition of the Firm’s selling expenses. The update is effective for annual periods beginning January 1, 2027, and interim reporting periods beginning January 1, 2028, with early adoption permitted.
Current report
Our Time deposits are predominantly brokered certificates of deposit.
Current report
Basel III Endgame and G-SIB Surcharge Proposals
Current report
The prior period has been revised to conform to the current period presentation.
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Removed paragraphs (73)
Previous report
•The Firm reported net revenues of $54.1 billion and net income of $9.1 billion against a mixed market backdrop and a number of headwinds.
Previous report
•Institutional Securities reported net revenues of $23.1 billion reflecting lower completed activity in Investment Banking and lower results in Equity and Fixed Income on reduced client activity and a less favorable market environment compared to a year ago.
Previous report
•Wealth Management delivered net revenues of $26.3 billion, reflecting mark-to-market gains on investments associated with certain employee deferred cash-based compensation plans (“DCP investments”) compared with losses in the prior year and higher Net interest revenues. The pre-tax margin was 24.9%. The business added net new assets of $282.3 billion, representing a 6.7% annualized growth rate from beginning period assets.
Previous report
•Investment Management reported net revenues of $5.4 billion and AUM increased to $1.5 trillion.
Previous report
•We reported net revenues of $54.1 billion in 2023 compared with $53.7 billion in 2022. For 2023, net income applicable to Morgan Stanley was $9.1 billion, or $5.18 per diluted common share, compared with $11.0 billion, or $6.15 per diluted common share in 2022.
Previous report
•Compensation and benefits expenses of $24,558 million in 2023 increased 7% from the prior year, primarily due to higher expenses related to certain employee deferred cash-based compensation plans linked to investment performance (“DCP”) and higher salary expenses, partially offset by lower expenses related to outstanding deferred equity compensation.
Previous report
2023 Compensation and benefits expenses included $353 million of severance costs, primarily associated with the employee action recorded in the second quarter of 2023.
Previous report
•Non-compensation expenses of $17,240 million in 2023 increased 6% from the prior year, primarily driven by an FDIC special assessment of $286 million, increased spend on technology, higher costs related to exits of real estate and higher legal expenses, including $249 million related to a specific matter.
Previous report
•EMEA net revenues in 2023 decreased 11%, primarily driven by lower results across businesses within the Institutional Securities business segment.
Previous report
•Asia net revenues in 2023 decreased 5%, primarily driven by lower results across businesses within the Institutional Securities business segment.
Previous report
The market environment in 2023 remained mixed, characterized by inflationary pressures and uncertainty regarding the future path of interest rates, which remained persistently high. Towards the end of the year, the market environment improved from prior quarters with the expectation of lower interest rates going into 2024. However, there is continued uncertainty regarding the timing and pace of these rate reductions along with concerns regarding heightened geopolitical risks that could impact the capital markets in 2024. The market environment impacted our businesses in 2023, as discussed further in “Business Segments” herein, and, to the extent that it continues to remain uncertain, could adversely impact client confidence and related activity.
Previous report
Compensation expense for DCP is recognized over the relevant vesting period and is adjusted based on the fair value of the referenced investments until distribution. Although changes in compensation expense resulting from changes in the fair value of the referenced investments will generally be offset by changes in the fair value of investments made by the Firm, there is typically a timing difference between the
Previous report
immediate recognition of gains and losses on the Firm's investments and the compensation expense recognized over the vesting period.
Previous report
Net revenues of $4,578 million in 2023 decreased 13% compared with the prior year, primarily reflecting lower Advisory revenues.
Previous report
Investment Banking continues to operate in a market environment characterized by lower completed M&A and underwriting activity amid market uncertainty, including the future path of interest rates.
Previous report
Net revenues of $9,986 million in 2023 decreased 7% compared with the prior year, reflecting decreases in Financing and Execution services.
Previous report
Net revenues of $7,673 million in 2023 decreased 15% compared with the prior year, primarily reflecting a decrease in foreign exchange and commodities products.
Previous report
•Global macro products revenues decreased primarily due to a decline in foreign exchange products.
Previous report
•Credit products revenues decreased primarily due to lower client activity across products.
Previous report
•Compensation and benefits expenses increased primarily due to higher expenses related to DCP and higher stock-based compensation expenses driven by the Firm’s share price movement in the prior year, partially offset by lower expenses related to outstanding deferred equity compensation.
Previous report
•Non-compensation expenses increased primarily due to increased spend on technology, an FDIC special assessment of $121 million, higher legal expenses, including $249 million related to a specific matter, higher execution-related and marketing and business development expenses.
Previous report
Transactional revenues of $3,556 million in 2023 increased 44% compared with the prior year, primarily due to $282 million of gains on DCP investments compared with $858 million of losses in the prior year, partially offset by lower client activity.
Previous report
For further information on the impact of DCP, see “Selected Non-GAAP Financial Information” herein.
Previous report
Net interest revenues of $8,118 million in 2023 increased 9% compared with the prior year, primarily due to the net effect of higher interest rates, partially offset by changes in deposit mix.
Previous report
•Compensation and benefits expenses increased, primarily due to higher expenses related to DCP and higher salaries driven by hiring mix.
Previous report
For further information on the impact of expenses related to DCP, see “Selected Non-GAAP Financial Information” herein.
Previous report
•Non-compensation expenses increased, primarily driven by an FDIC special assessment of $165 million, increased spend on technology and costs related to exits of real estate.
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Includes Investments, Trading, Commissions and fees, Net interest and Other revenues.
Previous report
Asset management and related fees of $5,231 million in 2023 decreased 2% compared with the prior year, primarily due to a shift in the mix of average AUM, driven by the cumulative effect of net flows.
Previous report
Non-interest expenses of $4,528 million in 2023 decreased 1% from the prior year, primarily due to lower Compensation and benefits expenses.
Previous report
•Non-compensation expenses were relatively unchanged for the current year.
Previous report
The 2021 Other amounts primarily include AUM additions related to the Eaton Vance Corp. (“Eaton Vance”) acquisition.
Previous report
We adopted the following accounting update on January 1, 2024, with no material impact on our financial condition or results of operations upon adoption:
Previous report
•Investments—Tax Credit Structures. This accounting update permits an election to account for tax equity investments using the proportional amortization method if certain conditions are met. Under the proportional amortization method, the initial cost of the investment is amortized in proportion to the income tax credits and other income tax benefits received and recognized net in the income statement as a component of provision for income taxes. The update requires a separate accounting policy election to be made for each tax credit program. Additional disclosures are required regarding (i) the nature of our tax equity investments and (ii) the effect of our tax equity investments and related income tax credits on the financial condition and results of operations.
Previous report
•Segment Reporting. This accounting update requires additional reportable segment disclosures on an annual and interim basis, primarily about significant segment expenses and other segment items that are regularly provided to the
Previous report
chief operating decision maker and included within the reported measure of segment profit or loss. This update does not change how operating segments are identified or aggregated, or how quantitative thresholds are applied to determine the reportable segments. The accounting update is effective for fiscal years beginning January 1, 2024, and interim periods within fiscal years beginning January 1, 2025, with early adoption permitted.
Previous report
$1,194 billion at December 31, 2023 were relatively unchanged from $1,180 billion at December 31, 2022.
Previous report
Under the LCR rule, Eligible HQLA is calculated using weightings and excluding certain HQLA held in subsidiaries.
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Reworded paragraphs (166)
Previous wording
Institutional Securities provides a variety of products and services to corporations, governments, financial institutions and ultra-high net worth clients. Investment Banking services consist of capital raising and financial advisory services, including the underwriting of debt, equity securities and other products, as well as advice on mergers and acquisitions, restructurings and project finance. Our Equity and Fixed Income businesses include sales, financing, prime brokerage, market-making, Asia wealth management services and certain business-related investments. Lending activities include originating corporate loans and commercial real estate loans, providing secured lending facilities, and extending securities-based and other financing to customers. Other activities include research.
Current wording
Institutional Securities provides a variety of products and services to corporations, governments, financial institutions and ultra-high net worth clients. Investment Banking services consist of capital raising and financial advisory services, including the underwriting of debt, equity securities and other products, as well as advice on mergers and acquisitions, restructurings and project finance. Our Equity and Fixed Income businesses include sales, financing, prime brokerage, market-making, Asia wealth management services and certain business-related investments. Lending activities include originating corporate loans and commercial real estate loans, providing secured lending facilities, and extending securities-based and other financing to clients. Other activities include research.
Previous wording
Wealth Management provides a comprehensive array of financial services and solutions to individual investors and small to medium-sized businesses and institutions covering: financial advisor-led brokerage, custody, administrative and investment advisory services; self-directed brokerage services; financial and wealth planning services; workplace services, including stock plan administration; securities-based lending, residential real estate loans and other lending products; banking; and retirement plan services.
Current wording
Wealth Management provides a comprehensive array of financial services and solutions to individual investors and small to medium-sized businesses and institutions. Wealth Management covers: financial advisor-led brokerage, custody, administrative and investment advisory services; self-directed brokerage services; financial and wealth planning services; workplace services, including stock plan administration; securities-based lending, residential and commercial real estate loans and other lending products; banking; and retirement plan services.
Previous wording
The results of operations in the past have been, and in the future may continue to be, materially affected by: competition; risk factors; legislative, legal and regulatory developments; and other factors. These factors also may have an adverse impact on our ability to achieve our strategic objectives. Additionally, the discussion of our results of operations herein may contain forward-looking statements. These statements, which reflect management’s beliefs and expectations, are subject to risks and uncertainties that may cause actual results to differ materially. For a discussion of the risks and uncertainties that may affect our future results, see “Forward-Looking Statements,” “Business—Competition,” “Business—Supervision and Regulation,” “Risk Factors” and “Liquidity and Capital Resources—Regulatory Requirements” herein.
Current wording
The results of operations in the past have been, and in the future may continue to be, materially affected by: competition; legislative, legal and regulatory developments; and other risk factors. These factors also may have an adverse impact on our ability to achieve our strategic objectives. Additionally, the discussion of our results of operations herein may contain forward-looking statements. These statements, which reflect management’s beliefs and expectations, are subject to risks and uncertainties that may cause actual results to differ materially. For a discussion of the risks and uncertainties that may affect our future results, see “Forward-Looking Statements”, “Business—Competition”, “Business—Supervision and Regulation”, “Risk Factors” and “Liquidity and Capital Resources—Regulatory Requirements” herein.
Previous wording
•The Firm delivered ROE of 9.4% and ROTCE of 12.8% (see “Selected Non-GAAP Financial Information” herein).
Current wording
•The Firm delivered ROE of 14.0% and ROTCE of 18.8% (see “Selected Non-GAAP Financial Information” herein).
Previous wording
•The Firm expense efficiency ratio was 77%. The ratio was negatively impacted by severance costs of $353 million, an FDIC special assessment of $286 million, higher legal expenses relating to a specific matter of $249 million and integration-related expenses of $293 million.
Current wording
•The Firm expense efficiency ratio was 71% compared to 77% in the prior year, reflecting higher revenues and expense discipline. In the prior year, the ratio was negatively impacted by specific severance costs of $353 million, integration-related expenses of $293 million, an FDIC special assessment of $286 million and higher legal expenses related to a $249 million settlement in connection with resolutions of investigations into the Firm’s blocks business. (See “Expenses” herein for more information).
Previous wording
•At December 31, 2023, the Firm’s Standardized Common Equity Tier 1 capital ratio was 15.2%.
Current wording
•The Firm accreted $5.6 billion of Common Equity Tier 1 capital while supporting clients and returning capital to shareholders. At December 31, 2024, the Firm’s Standardized Common Equity Tier 1 capital ratio was 15.9%.
Previous wording
The Provision for credit losses on loans and lending commitments of $532 million in 2023 was primarily related to deteriorating conditions in the commercial real estate sector, including provisions for certain specific loans, mainly in the office portfolio, and modest growth in certain other loan portfolios. The Provision for credit losses on loans and lending commitments of $280 million in 2022 was due to portfolio growth and deterioration in the macroeconomic outlook.
Current wording
The Provision for credit losses on loans and lending commitments of $264 million in 2024 was primarily related to certain specific commercial real estate loans and growth in the corporate loan portfolio, partially offset by improvements in the macroeconomic outlook. The Provision for credit losses on loans and lending commitments of $532 million in 2023 was primarily related to credit deterioration in the commercial real estate sector, including provisions for certain specific loans, mainly in the office portfolio, and modest growth in certain other loan portfolios.
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•Institutional Securities net revenues of $23,060 million in 2023 decreased 5% from the prior year, primarily reflecting lower results across businesses.
Current wording
•Institutional Securities net revenues of $28,080 million in 2024 increased 22% from the prior year, reflecting higher results across businesses, particularly in Equity and underwriting results within Investment Banking.
Previous wording
•Wealth Management net revenues of $26,268 million in 2023 increased 8% from the prior year, primarily reflecting gains on DCP investments compared with losses in the prior year and higher Net interest revenues.
Current wording
•Wealth Management net revenues of $28,420 million in 2024 increased 8% from the prior year, primarily reflecting higher Asset management revenues and Transactional revenues, partially offset by lower Net interest income.
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•Investment Management net revenues of $5,370 million in 2023 were relatively unchanged from the prior year, reflecting a decrease in Asset management and related fees revenues offset by an increase in Performance based income and other revenues.
Current wording
•Investment Management net revenues of $5,861 million in 2024 increased 9% from the prior year, primarily reflecting higher Asset management and related fees and higher Performance-based income and other revenues.
Previous wording
•Americas net revenues in 2023 increased 4%, primarily driven by results within the Wealth Management business segment and Other net revenues within the Institutional Securities business segment, partially offset by lower results across businesses within the Institutional Securities business segment.
Current wording
•Americas net revenues in 2024 increased 13% from the prior year, primarily driven by higher Asset management revenues within the Wealth Management business segment and higher results across businesses within the Institutional Securities business segment.
Previous wording
Book value per common share and tangible book value per common share equal common shareholders’ equity and tangible common shareholders’ equity, respectively, divided by common shares outstanding.
Current wording
Book value per common share and tangible book value per common share equal common equity and tangible common equity, respectively, divided by common shares outstanding.
Previous wording
Client assets represents Wealth Management client assets and Investment Management AUM. Certain Wealth Management client assets are invested in Investment Management products and are also included in Investment Management’s AUM.
Current wording
Client assets represent the sum of Wealth Management client assets and Investment Management AUM. Certain Wealth Management client assets are invested in Investment Management products and are therefore also included in Investment Management’s AUM.
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We present certain non-GAAP financial measures that exclude the impact of mark-to-market gains and losses on DCP investments from net revenues and compensation expenses. The impact of DCP is primarily reflected in our Wealth Management business segment results. These measures allow for better comparability of period-to-period underlying operating performance and revenue trends, especially in our Wealth Management business segment. By excluding the impact of these items, we are better able to describe the business drivers and resulting impact to net revenues and corresponding change to the associated compensation expenses.
Current wording
We present certain non-GAAP financial measures that exclude the impact of mark-to-market gains and losses, net of financing costs on DCP investments from net revenues. We also exclude the impact of mark-to-market gains and losses on DCP from compensation expenses. The impact of DCP investments and DCP are primarily reflected in our Wealth Management business segment results. These measures allow for better comparability of period-to-period underlying operating performance and revenue trends. By excluding the impact of these items, we are better able to describe the business drivers and resulting impact to net revenues and
Previous wording
may not be material to our Income before provision for income taxes in any individual period, it may impact the Wealth Management business segment reported ratios and operating metrics in certain periods due to potentially significant impacts to net revenues and compensation expenses. For additional information on DCP, refer to “Other Matters” herein.
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corresponding change to the associated compensation expenses. For additional information on DCP, refer to “Other Matters” herein.
Previous wording
The calculation of ROE and ROTCE by segment uses net income applicable to Morgan Stanley by segment less preferred dividends allocated to each segment as a percentage of average common equity and average tangible common equity, respectively, allocated to each segment.
Current wording
The calculation of ROE and ROTCE by segment uses net income applicable to Morgan Stanley by segment less preferred dividends allocated to each segment, annualized as a percentage of average common equity and average tangible common equity, respectively, allocated to each segment.
Previous wording
Within the Wealth Management business segment, commissions and fees arise from client transactions primarily in equity securities, insurance products, mutual funds, alternative investments, futures and options. Wealth Management also earns revenues from order flow paymentsfor directing customer orders to broker-dealers, exchanges and market centers for execution.
Current wording
Within the Wealth Management business segment, commissions and fees arise from client transactions including in equity securities, insurance products, mutual funds, alternative investments, futures and options. Wealth Management also earns revenues from order flow paymentsfor directing customer orders to broker-dealers, exchanges and market centers for execution.
Previous wording
Within the Wealth Management business segment, Asset management revenues are related to advisory services associated with fee-based assets, account service and administration, as well as distribution of products. These revenues are generally based on the net asset value of the account in which a client is invested.
Current wording
associated with fee-based assets, account service and administration, as well as distribution of products. These revenues are generally based on the net asset value of the account in which a client is invested.
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revenues directly attributable to those businesses. These revenues, which can be affected by a variety of interrelated factors, including market volumes, bid-offer spreads and the impact of market conditions on inventory held to facilitate client activity, as well as the effect of hedging activity, are viewed in the aggregate when assessing the performance and profitability of our businesses.
Current wording
Fixed income and Equities net revenues are composed of Trading revenues, Commissions and fees, Asset management revenues, Net interest, and certain Investments and Other revenues directly attributable to those businesses. These revenues, which can be affected by a variety of interrelated factors, including market volumes, bid-offer spreads and the impact of market conditions on inventory held to facilitate client activity, as well as the effect of hedging activity, are viewed in the aggregate when assessing the performance and profitability of our businesses.
Previous wording
•Credit products. We make markets in credit-sensitive products, such as corporate bonds and mortgage securities and other securitized products, and related derivative instruments. The values of positions in this business are sensitive to changes in credit spreads and interest rates, which result in gains and losses reflected in Trading revenues. We undertake lending activities, which include commercial mortgage lending, secured lending facilities and financing extended to sales and trading customers. Due to the amount and type of the interest-bearing securities and loans making up this business, a significant portion of the results is also reflected in Net interest revenues.
Current wording
•Credit products. We make markets in credit-sensitive products, such as corporate bonds and mortgage securities and other securitized products, and related derivative instruments. The values of positions in this business are sensitive to changes in credit spreads and interest rates, which result in gains and losses reflected in Trading revenues. We undertake lending activities, which include commercial mortgage lending, secured lending facilities and financing extended to sales and trading customers. Due
Previous wording
•Commodities products and Other. We make markets in various commodity products related primarily to electricity, natural gas, oil and metals. Other activities primarily include results from the centralized management of our fixed income derivative counterparty exposures and the management of derivative counterparty risk. These activities are primarily recorded in Trading revenues.
Current wording
•Commodities products and Other. We make markets in various commodity products related primarily to electricity, natural gas, oil and metals. These activities are primarily recorded in Trading revenues.
Previous wording
Compensation and benefits expenses include base salaries and fixed allowances, formulaic programs, discretionary incentive compensation, amortization of deferred cash and equity awards, changes in the fair value of DCP investments, including the Firm’s share price for certain awards, carried interest allocated to employees, severance costs, and other items such as health and welfare benefits.
Current wording
Compensation and benefits expenses include base salaries and fixed allowances, formulaic programs, discretionary incentive compensation, amortization of deferred cash and equity awards, changes in the fair value of DCP investments, carried interest allocated to employees, severance costs, and other items such as health and welfare benefits. For additional information on DCP, refer to “Other Matters” herein.
Previous wording
The factors that drive compensation for our employees vary from period to period, from segment to segment and within a segment. For certain revenue-producing employees in the Wealth Management and Investment Management business segments, compensation is largely paid on the basis of formulaic payouts that link employee compensation to revenues. Compensation for other employees, including revenue-producing employees in the Institutional Securities business segment, include base salary and benefits and may also include incentive compensation that is determined following the assessment of the performance of the Firm, business unit and individual.
Current wording
The factors that drive compensation for our employees vary from period to period, from segment to segment and within a segment. For certain revenue-producing employees in the Wealth Management and Investment Management business segments, compensation is largely paid on the basis of formulaic payouts that link employee compensation to revenues. Compensation for other employees, including revenue-producing employees in the Institutional Securities business segment and employees in corporate support functions, include base salary and benefits and may also include incentive compensation that is determined following the assessment of the performance of the Firm, business unit and individual.
Previous wording
Source: Refinitiv data as of January 2, 2024. Transaction volumes may not be indicative of net revenues in a given period. In addition, transaction volumes for prior periods may vary from amounts previously reported due to the subsequent withdrawal, change in value or change in timing of certain transactions.
Current wording
Source: LSEG Data & Risk Analytics (formerly known as Refinitiv) as of January 2, 2025. Transaction volumes may not be indicative of net revenues in a given period. In addition, transaction volumes for prior periods may vary from amounts previously reported due to the subsequent withdrawal, change in value or change in timing of certain transactions.
Previous wording
•Advisory revenues decreased primarily due to fewer completed M&A transactions on lower market volumes.
Current wording
•Advisory revenues increased primarily due to higher completed M&A transactions.
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•Equity underwriting revenues increased on higher volumes, primarily in secondary offerings and convertible issuances, partially offset by lower revenues from initial public offerings.
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•Equity underwriting revenues increased primarily on higher initial public offerings and follow-on offerings.
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•Fixed income underwriting revenues were relatively unchanged from the prior year, primarily reflecting higher investment-grade loan and bond issuances, offset by lower non-investment grade loan issuances.
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•Fixed income underwriting revenues increased primarily reflecting higher bond issuances, non-investment grade loan issuances and securitized products revenues.
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•Financing revenues decreased primarily due to higher funding and liquidity costs compared with the prior year.
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•Financing revenues increased primarily due to higher client activity and lower funding and liquidity costs.
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•Execution services revenues decreased primarily due to lower gains on inventory held to facilitate client activity in derivatives and cash equities and lower client activity in cash equities, partially offset by mark-to-market gains on business-related investments compared with losses in the prior year.
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•Execution services revenues increased primarily due to higher gains on inventory held to facilitate client activity and increased client activity in derivatives and cash equities.
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•Commodities products and other fixed income revenues decreased compared to elevated results in the prior year, primarily due to lower gains on inventory held to facilitate client activity and lower client activity.
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•Commodities products and other fixed income revenues were relatively unchanged.
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Other net revenues were $823 million in 2023 compared with losses of $633 million in the prior year, primarily due to lower mark-to-market losses on corporate loans held for sale, inclusive of hedges, and higher net interest income and fees on corporate loans, mark-to-market gains compared with losses in the prior year on DCP investments and impacts from liquidity and funding costs.
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Other net revenues were $1,262 million in 2024 compared with $823 million in the prior year, primarily due to lower mark-to-market losses on corporate loans, inclusive of hedges, and higher net interest income and fees on corporate loans.
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In 2023, the Provision for credit losses on loans and lending commitments of $401 million was primarily related to deteriorating conditions in the commercial real estate sector, including provisions for certain specific loans, mainly in the office portfolio, and modest growth in certain other loan portfolios. The Provision for credit losses on loans and lending commitments of $211 million in 2022 was primarily driven by portfolio growth and deterioration in the macroeconomic outlook.
Current wording
In 2024, the Provision for credit losses on loans and lending commitments of $202 million was primarily related to growth in the corporate loan portfolio and provisions for certain specific commercial real estate loans, partially offset by improvements in the macroeconomic outlook. The Provision for credit losses on loans and lending commitments of $401 million in 2023 was primarily related to credit deterioration in the commercial real estate sector, including provisions for certain specific loans, mainly in the office portfolio, and modest growth in certain other loan portfolios.
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Non-interest expenses of $18,183 million in 2023 increased 4% compared with the prior year due to higher Non-compensation expenses and Compensation and benefits expenses.
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Non-interest expenses of $19,129 million in 2024 increased 5% compared with the prior year as a result of higher Non-compensation expenses and Compensation and benefits expenses.
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Transactional includes Investment banking, Trading, and Commissions and fees revenues. Other includes Investments and Other revenues.
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Transactional includes Investment banking, Trading, and Commissions and fees revenues.
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Deposits reflect liabilities sourced from Wealth Management clients and other sources of funding on our U.S. Bank Subsidiaries. Deposits include sweep deposit programs, savings and other, and time deposits. As of December 31, 2023, there were no off-balance sheet amounts excluded from deposits. As of December 31, 2022, approximately $6 billion off-balance sheet amounts were excluded from deposits.
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Deposits reflect liabilities sourced from Wealth Management clients and other sources of funding on our U.S. Bank Subsidiaries. Deposits include sweep deposit programs, savings and other deposits, and time deposits.
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Annualized weighted average represents the total annualized weighted average cost of the various deposit products, excluding the effect of related hedging derivatives. The period end cost of deposits is based upon balances and rates as of December 31, 2023 and December 31, 2022. The period average is based on daily balances and rates for the year.
Current wording
Annualized weighted average represents the total annualized weighted average cost of the various deposit products. Amounts at December 31, 2024 include the effect of related hedging derivatives. Amounts at December 31, 2023 exclude the effect of related hedging derivatives, which did not have a material impact on the cost of deposits. The period end cost of deposits is based upon balances and rates as of December 31, 2024 and December 31, 2023. The period average is based on daily balances and rates for the period.
Previous wording
NNA represent client asset inflows, inclusive of interest, dividends and asset acquisitions, less client asset outflows, and exclude the impact of business combinations/divestitures and the impact of fees and commissions. The level of NNA in a given period is influenced by a variety of factors, including macroeconomic factors that impact client investment and spending behaviors, our ability to attract and retain financial advisors and clients, and timing of large idiosyncratic flows. Macroeconomic factors have had an impact on our NNA in
Current wording
NNA represent client asset inflows, inclusive of interest, dividends and asset acquisitions, less client asset outflows, and exclude the impact of business combinations/divestitures and the impact of fees and commissions. The level of NNA in a given period is influenced by a variety of factors, including macroeconomic factors that impact client investment and spending behaviors, seasonality, our ability to attract and retain financial advisors and clients, capital market and corporate activities which may impact the amount of assets in certain client channels, and large idiosyncratic inflows and
Previous wording
recent periods. Should these factors continue, the growth rate of our NNA may be impacted.
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outflows. These factors have had an impact on our NNA in recent periods. Should these factors continue, the growth rate of our NNA may be impacted.
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Fee‐based client assets represent the amount of assets in client accounts where the basis of payment for services is a fee calculated on those assets.
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Fee‐based client assets represent the amount of client assets where the basis of payment for services is a fee calculated on those assets.
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Stock plan unvested assets represent the market value of public company securities at the end of the period. The stock plan vested asset retention rate within the workplace channel, which represents the percentage of stock plan assets retained in either the self-directed or advisor-led channels following vesting, is 29%, 34% and 24% for 2023, 2022 and 2021, respectively. The rate is derived using the stock plan inflows for the previous year, less related outflows for the previous year and reported year, and dividing the result by the previous year inflows.
Current wording
Stock plan unvested assets represent the market value of public company securities at the end of the period.
Showing the first 40 of 166 pairs. Open the source sections for the rest.
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Within the Wealth Management business segment, Asset management revenues are related to advisory services
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to the amount and type of the interest-bearing securities and loans making up this business, a significant portion of the results is also reflected in Net interest revenues.
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Other includes Investments and Other revenues.
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Assets Under Management or Supervision Rollforwards
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definition of fair value, Level 1, Level 2, Level 3 and related valuation techniques, and quantitative information about and sensitivity of significant unobservable inputs used in Level 3 fair value measurements, see Notes 2 and 4 to the financial statements.
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range of loss or range of additional loss) is probable or reasonably possible, or to estimate the amount of loss, including through potentially lengthy discovery or determination of important factual matters, determination of issues related to class certification, the calculation of damages or other relief, and consideration of novel or unsettled legal questions relevant to the proceedings or investigations in question.
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strategies that may be available to tax attribute carryforwards before they expire.
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Liquidity Stress Tests are produced and results are reported at different levels, including major operating subsidiaries and major currencies, to capture specific cash requirements and cash availability across the Firm, including a limited number of asset sales in a stressed environment. The Liquidity Stress
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We have established longer-tenor secured funding requirements for less liquid asset classes, for which funding
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We view deposits and borrowings as stable sources of funding for unencumbered securities and non-security assets. Our unsecured financings include borrowings and certificates of
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In connection with certain OTC derivatives and certain other agreements where we are a liquidity provider to certain financing vehicles associated with the Institutional Securities
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Risk-Based Regulatory Capital. Risk-based capital ratio requirements apply to Common Equity Tier 1 (“CET1”)
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correlations or other market factors, such as market liquidity; and
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Required ratios are inclusive of any buffers applicable as of the date presented.
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As described in our most recent resolution plan, our preferred resolution strategy is an SPOE strategy. In line with our
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changes in market factors and scenarios designed by the Market Risk Department in collaboration with the business units. The material risks identified by these processes are summarized in reports produced by the Market Risk Department that are circulated to and discussed with senior management, the FRC, the BRC and the Board.
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securities and financial instruments, including a variety of derivative products (e.g., futures, forwards, swaps and options). Hedging activities may not always provide effective mitigation against trading losses due to differences in the terms, specific characteristics or other basis risks that may exist between the hedge instrument and the risk exposure that is being hedged.
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exchange referenced products. The VaR model also captures certain implied correlation risks associated with portfolio credit derivatives, as well as certain basis risks (e.g., corporate debt and related credit derivatives).
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trading losses to evaluate the VaR model’s accuracy. There were 11 trading loss days in 2024, none of which exceeded 95% Total Management VaR, compared to 16 trading loss days in 2023, one of which exceeded 95% Total Management VaR.
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sensitivity analyses cover substantially all of the non-trading market risk in our portfolio.
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Our Wealth Management business segment balance sheet is asset sensitive, given assets reprice faster than liabilities, resulting in higher net interest income in higher interest rate scenarios and lower net interest income in lower interest rate scenarios. The level of interest rates may impact the amount of deposits held at the Firm, given competition for deposits
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tolerance and includes single-name limits and portfolio concentration limits by country, industry and product type.
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For more information on the allowance for credit losses, see Notes 2 and 9 to the financial statements.
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Corporate comprises relationship and event-driven loans and lending commitments supporting general and event-driven financing needs for our institutional clients, which typically consist of revolving lines of credit, term loans and bridge loans; may have varying terms; may be senior or
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which includes requiring customers to deposit additional collateral or reduce debt positions, when necessary.
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A credit derivative is a contract between a seller and buyer of protection against the risk of a credit event occurring on one
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Our Liquidity Risk Management Framework is critical to helping ensure that we maintain sufficient liquidity reserves and durable funding sources to meet our daily obligations and to withstand unanticipated stress events. The Liquidity Risk
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regulatory focus on the financial services and banking industries globally presents a continuing business challenge for us.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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We invest directly, as principal, in financial instruments and other investments to economically hedge certain of our obligations under these DCP awards. Changes in the fair value of such investments, net of financing costs, are recorded in net revenues, and included in Transactional revenues in the Wealth Management business segment. Although changes in compensation expense resulting from changes in the fair value of the referenced investments will generally be offset by changes in the fair value of investments recognized in net revenues, there is typically a timing difference between the immediate recognition of gains and losses on our investments and the deferred recognition of the related compensation expense over the vesting period. While this timing difference
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Fixed income and Equities net revenues are composed of Trading revenues, Commissions and fees, Asset management revenues, Net interest, and certain Investments and Other
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Includes $43 billion of fee-based assets acquired in an asset acquisition in the third quarter of 2021, reflected in Separately managed.
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Compensation expense for DCP awards is calculated based on the notional value of the award granted, adjusted for changes in the fair value of the referenced investments that employees select. Compensation expense is recognized over the vesting period relevant to each separately vesting portion of deferred awards.
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hierarchy. Level 3 financial assets represented 1.2% and 1.4% of our total assets, as of December 31, 2023 and December 31, 2022, respectively.
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limited by the carrying amount of goodwill allocated to that reporting unit.
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reasonably estimate the amount of that loss or the range of loss, we accrue an estimated loss by a charge to income.
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funding, which is their projected minimum funding needs, over a one-year time horizon.
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The liquid nature of the marketable securities and short-term receivables arising principally from sales and trading activities in the Institutional Securities business segment
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collateral maintenance policies and the elements of our Liquidity Risk Management Framework.
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We are an FHC under the BHC Act and are subject to the regulation and oversight of the Federal Reserve. The Federal Reserve establishes capital requirements for us, including “well-capitalized” standards, and evaluates our compliance with such capital requirements. The OCC establishes similar capital requirements and standards for our U.S. Bank
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buffer requirement computed under the applicable advanced approaches for calculating credit risk, market risk and operational risk RWAs (“Advanced Approach”) is equal to our 2.5% capital conservation buffer, G-SIB capital surcharge and CCyB.
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on June 30, 2023. For more information about resolution planning requirements, see “Business—Supervision and Regulation—Financial Holding Company—Resolution and Recovery Planning.”
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In subsequent sections, we discuss our risk management policies and procedures for our primary risks involved in the
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Department that are circulated to and discussed with senior management, the FRC, the BRC and the Board.
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terms, specific characteristics or other basis risks that may exist between the hedge instrument and the risk exposure that is being hedged.
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history is updated and the confidence level. As a result, VaR statistics are more useful when interpreted as indicators of trends in a firm’s risk profile rather than as an absolute measure of risk to be compared across firms.
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parameters (e.g., probability of default and loss given default), recovery rates and expected losses in order to assess the impact of stresses on exposures, profit and loss, and our capital position. Stress tests are conducted in accordance with our established policies and procedures.
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forwards, swaps and options). Additionally, we may sell, assign or syndicate loans and lending commitments to other financial institutions in the primary and secondary loan markets.
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Investment Management, composed primarily of senior secured loans to corporations.
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Securities-based lending allows clients to borrow money against the value of qualifying securities, generally for any purpose other than purchasing, trading or carrying securities or refinancing margin debt. We establish approved credit lines
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development of controls to support a complete and accurate Firmwide model inventory.
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Legal, regulatory and compliance risk includes the risk of legal or regulatory sanctions, material financial loss, including fines, penalties, judgments, damages and/or settlements, limitations on our business, or loss to reputation that we may suffer as a result of failure to comply with laws, regulations,
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As climate risk is interconnected with other risk types, we have developed and continue to enhance processes to embed climate risk considerations into our risk management