MORGAN STANLEY

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Management’s Discussion and Analysis

Institutional Securities

Investment Banking

Investment Banking Volumes

Source: LSEG Data & Risk Analytics (formerly known as Refinitiv) as of April 1, 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.

1. Includes transactions of $100 million or more. Based on full credit to each of the advisors in a transaction.

2. Based on full credit for single book managers and equal credit for joint book managers.

3. Includes Rule 144A issuances and registered public offerings of common stock, convertible securities and rights offerings.

4. Includes Rule 144A and publicly registered issuances, non-convertible preferred stock, mortgage-backed and asset-backed securities, and taxable municipal debt. Excludes leveraged loans and self-led issuances.

Investment Banking Revenues

Net revenues of $1,559 million in the current quarter increased 8% from the prior year quarter, reflecting higher Fixed Income underwriting and Advisory revenues, partially offset by lower Equity underwriting revenues.

•Advisory revenues increased on higher completed M&A transactions.

•Equity underwriting revenues decreased primarily on lower secondary block share trades and initial public offerings.

•Fixed Income underwriting revenues increased primarily in non-investment grade loan issuances.

While Investment Banking results have shown improvement in recent quarters, we continue to operate in a market environment with lower completed M&A activity relative to longer-term averages. The current economic environment may continue to delay expectations of increased M&A activity.

See “Investment Banking Volumes” herein.

Equity, Fixed Income and Other Net Revenues

Equity and Fixed Income Net Revenues

1. Includes Commissions and fees and Asset management revenues.

2. Includes funding costs, which are allocated to the businesses based on funding usage.

3. Includes Investments and Other revenues.

Equity

Net revenues of $4,128 million in the current quarter increased 45% compared with the prior year quarter, reflecting an increase in both Execution services and Financing.

•Financing revenues increased primarily due to higher gains on inventory held to facilitate client activity and increased client activity.

•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.

Fixed Income

Net revenues of $2,604 million in the current quarter increased 5% from the prior year quarter, primarily reflecting an increase in Global macro products, partially offset by a decrease in Commodities and Credit products.

•Global macro products revenues increased primarily on foreign exchange products due to gains compared with

Table of Contents

Management’s Discussion and Analysis

losses in the prior year quarter on inventory held to facilitate client activity and increased client activity.

•Credit products revenues decreased primarily due to lower gains on inventory held to facilitate client activity, partially offset by higher lending and securitized products activity.

•Commodities products and other fixed income revenues decreased primarily due to lower gains on inventory held to facilitate client activity.

Other Net Revenues

Other net revenues were $692 million in the current quarter, compared with $242 million in the prior year quarter, primarily reflecting gains on the sale of corporate loans held-for-sale compared with mark-to-market losses, inclusive of hedges, in the prior year quarter.

The Provision for credit losses on loans and lending commitments of $91 million in the current quarter was primarily related to portfolio growth in secured lending facilities and corporate loans and deterioration in the macroeconomic outlook. The Provision for credit losses on loans and lending commitments of $2 million in the prior year quarter was primarily related to modest growth in certain loan portfolios and provisions for certain specific commercial real estate and corporate loans, partially offset by improvements in the macroeconomic outlook.

For further information on the Provision for credit losses, see “Credit Risk” herein.

Non-interest expenses of $5,611 million in the current quarter increased 20% compared with the prior year quarter as a result of higher Compensation and benefits expenses and Non-compensation expenses.

•Compensation and benefits expenses increased primarily due to higher discretionary incentive compensation on higher revenues, higher expenses related to outstanding deferred cash- and equity-based compensation and higher severance costs associated with a RIF in March.

•Non-compensation expenses increased primarily reflecting higher execution-related expenses.