8-KOther EventsExhibits & Filings

MORGAN STANLEY 8-K Report, Corporate Update (Jun 28, 2021)

Filed June 28, 2021For Securities:MSMS-PKMS-POMS-PQMS-PAMS-PFMS-PIMS-PLMS-PPMS-PEMSTLW

Summary

Morgan Stanley announced significant capital return initiatives on June 28, 2021, signaling strong confidence from management and a positive outlook for shareholders. The company is doubling its quarterly common stock dividend to $0.70 per share, effective from the third quarter of 2021. This substantial increase reflects the company's robust financial performance and its commitment to returning value to its investors. In addition to the dividend hike, Morgan Stanley authorized a new share repurchase program of up to $12 billion, to be executed through June 30, 2022. This buyback program provides further flexibility for capital deployment and is expected to reduce the number of outstanding shares, potentially boosting earnings per share. These actions are underscored by the company's performance in the Federal Reserve's 2021 stress tests, which resulted in a Stress Capital Buffer (SCB) requirement of 5.7%, indicating sufficient capital levels.

Key Highlights

  • 1Morgan Stanley is doubling its quarterly common stock dividend to $0.70 per share, starting in Q3 2021.
  • 2A new share repurchase authorization of up to $12 billion has been approved through June 30, 2022.
  • 3The company's 2021 stress tests resulted in a Stress Capital Buffer (SCB) of 5.7%, effective October 1, 2021.
  • 4These capital return initiatives suggest strong financial health and management confidence.
  • 5The share repurchase program offers flexibility for capital deployment and potential EPS enhancement.
  • 6The dividend increase demonstrates a commitment to returning capital directly to shareholders.

Frequently Asked Questions

The increased dividend of $0.70 per share is expected to be declared by the Board of Directors in the third quarter of 2021, with payments beginning thereafter.

Morgan Stanley has authorized up to $12 billion for the repurchase of its outstanding common stock, with the program set to run through June 30, 2022.

The SCB of 5.7% is a regulatory requirement set by the Federal Reserve based on the 2021 stress tests. It dictates the minimum capital buffer the company must maintain relative to its risk-weighted assets from October 1, 2021, to September 30, 2022. This result indicates that Morgan Stanley has sufficient capital to withstand severe economic downturns.

Share repurchases may be executed from time to time through open market purchases or privately negotiated transactions, including the use of Rule 10b5-1 plans, depending on market conditions and the company's financial performance.