How much will Morgan Stanley's dividend increase and what is the annualized payout?

The quarterly dividend rises to $0.925 per share from $0.85, a 7.5-cent increase of about 8.8%. At that quarterly rate, the annualized dividend would be $3.70 per share, compared with $3.40 currently. The increase takes effect with the dividend expected to be declared in the third quarter of 2024.

When does the new $20 billion buyback program begin, and does it expire?

The program begins in the third quarter of 2024 and has no set expiration date. It is a multi-year authorization, and the company will execute repurchases from time to time, not on a fixed schedule.

What does the 6.0% Stress Capital Buffer mean for Morgan Stanley?

The SCB is the capital buffer set by the Federal Reserve's stress test results. Morgan Stanley expects it to be 6.0% from October 1, 2024 through September 30, 2025. Combined with other regulatory framework elements, it produces an aggregate U.S. Basel III Standardized CET1 requirement of 13.5%.

Is Morgan Stanley well capitalized relative to its requirements?

Based on the filing, yes. The firm reported a U.S. Basel III Standardized CET1 ratio of 15.0% as of March 31, 2024, which is above the 13.5% aggregate requirement implied by the new SCB. The filing does not report a more recent ratio.

Could the buyback or dividend be reduced in the future?

The filing says repurchases will depend on current market conditions, the firm's capital position, and its future economic and earnings outlook, and it includes standard forward-looking statement cautions. Because dividends and repurchases are discretionary, the Board can change them, so these amounts are not guaranteed.

MORGAN STANLEY 8-K SEC Disclosure

01—Abstract

Summary

Summary of the 8-K filed June 28, 2024. Cited figures are marked; the original filing is the authoritative source.

Morgan Stanley (NYSE: MS) announced on June 28, 2024 that it will raise its quarterly common stock dividend to $0.925^a per share from $0.85, a 7.5-cent (about 8.8%) increase.

The higher rate applies beginning with the dividend expected to be declared by the Board in the third quarter of 2024. At the current quarterly rate, the new dividend implies annualized payments of $3.70^b per share, versus $3.40 previously. CEO Ted Pick noted this is the third consecutive year of a 7.5-cent increase.

The Board also reauthorized a multi-year common equity share repurchase program of up to $20 billion^c, with no set expiration date, beginning in the third quarter of 2024. Repurchases will be made from time to time at prices management considers appropriate, depending on market conditions, the firm's capital position, and its economic and earnings outlook. The filing does not commit to a specific repurchase pace.

The capital actions follow the Federal Reserve's publication of 2024 Comprehensive Capital Analysis and Review (CCAR) results on June 26, 2024. Morgan Stanley expects a Stress Capital Buffer (SCB) of 6.0%^d effective October 1, 2024 through September 30, 2025.

Together with other framework features, this yields an aggregate U.S. Basel III Standardized Approach CET1 requirement of 13.5%, compared with the firm's reported CET1 ratio of 15.0% as of March 31, 2024. That cushion above the requirement supports the increased dividend and buyback capacity.

02—Key points

Key Highlights

Quarterly common dividend increases 8.8% to $0.925 per share from $0.85, starting with the dividend expected to be declared in Q3 2024
Board reauthorized a multi-year share repurchase program of up to $20 billion with no set expiration date, beginning in Q3 2024
Federal Reserve 2024 stress tests set Morgan Stanley's Stress Capital Buffer at 6.0% for October 1, 2024 to September 30, 2025
Implied aggregate U.S. Basel III Standardized CET1 requirement of 13.5%, versus the firm's 15.0% CET1 ratio at March 31, 2024
Dividend increase marks the third consecutive year of a 7.5-cent raise, per CEO Ted Pick
Repurchases are discretionary and will depend on market conditions, capital position, and earnings outlook, so actual pace is not guaranteed

03—Questions

Frequently Asked Questions

How much will Morgan Stanley's dividend increase and what is the annualized payout?
The quarterly dividend rises to $0.925 per share from $0.85, a 7.5-cent increase of about 8.8%. At that quarterly rate, the annualized dividend would be $3.70 per share, compared with $3.40 currently. The increase takes effect with the dividend expected to be declared in the third quarter of 2024.
When does the new $20 billion buyback program begin, and does it expire?
The program begins in the third quarter of 2024 and has no set expiration date. It is a multi-year authorization, and the company will execute repurchases from time to time, not on a fixed schedule.
What does the 6.0% Stress Capital Buffer mean for Morgan Stanley?
The SCB is the capital buffer set by the Federal Reserve's stress test results. Morgan Stanley expects it to be 6.0% from October 1, 2024 through September 30, 2025. Combined with other regulatory framework elements, it produces an aggregate U.S. Basel III Standardized CET1 requirement of 13.5%.
Is Morgan Stanley well capitalized relative to its requirements?
Based on the filing, yes. The firm reported a U.S. Basel III Standardized CET1 ratio of 15.0% as of March 31, 2024, which is above the 13.5% aggregate requirement implied by the new SCB. The filing does not report a more recent ratio.
Could the buyback or dividend be reduced in the future?
The filing says repurchases will depend on current market conditions, the firm's capital position, and its future economic and earnings outlook, and it includes standard forward-looking statement cautions. Because dividends and repurchases are discretionary, the Board can change them, so these amounts are not guaranteed.

04—Continue

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