MORGAN STANLEY

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Management’s Discussion and Analysis

Institutional Securities

Investment Banking Volumes

Source: LSEG Data & Risk Analytics (formerly known as Refinitiv) as of January 2, 2026. 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 $7,619 million in 2025 increased 23% compared with the prior year, reflecting increases across regions and businesses, particularly in underwriting revenues.

•Advisory revenues increased primarily reflecting higher completed M&A transactions.

•Equity underwriting revenues increased primarily reflecting higher convertible issuances and initial public offerings.

•Fixed income underwriting revenues increased primarily reflecting higher non-investment and investment grade bond and loan issuances, which benefited from higher event-related 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 $15,631 million in 2025 increased 28% compared with the prior year, reflecting an increase in Financing and Execution services.

•Financing revenues increased primarily due to higher average client balances and increased client activity.

•Execution services revenues increased primarily due to increased client activity and higher gains on inventory held to facilitate client activity in derivatives and cash equities.

Fixed Income

Net revenues of $8,716 million in 2025 increased 4% compared with the prior year, reflecting an increase in Global macro and Credit products, partially offset by a decrease in Commodities.

•Global macro products revenues increased primarily due to increased client activity in rates and foreign exchange products.

•Credit products revenues increased due to increased client activity across products, primarily driven by securitization and lending activity, partially offset by lower results on inventory held to facilitate client activity.

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

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Management’s Discussion and Analysis

Other Net Revenues

Other net revenues were $1,114 million in 2025 compared with $1,262 million in the prior year, primarily due to lower net interest income and fees, following the sale of corporate loans held-for-sale in the first quarter of 2025, partially offset by net gains on corporate loans held-for-sale, inclusive of hedges.

In 2025, the Provision for credit losses on loans and lending commitments of $302 million was primarily related to portfolio growth in corporate loans and secured lending facilities and provisions for certain specific commercial real estate loans. The Provision for credit losses on loans and lending commitments of $202 million in 2024 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.

Non-interest expenses of $21,541 million in 2025 increased 13% compared with the prior year, reflecting higher Non-compensation expenses and Compensation and benefits expenses.

•Compensation and benefits expenses increased primarily due to higher discretionary incentive compensation on higher revenues, higher expenses related to outstanding deferred compensation and higher salary expenses.

•Non-compensation expenses increased primarily due to higher execution-related expenses on higher volumes.