How did Morgan Stanley perform in the fourth quarter of 2024?

Net revenues were $16.2 billion, up 26% from $12.9 billion a year earlier, and net income applicable to Morgan Stanley was $3.7 billion, or $2.22 per diluted share, versus $0.85 a year ago. Pre-tax margin was 30% and ROTCE was 20.2%. Institutional Securities drove much of the growth, with net revenues up 47% year over year.

Is Morgan Stanley's capital position strong enough to support shareholder returns?

Yes. The Standardized CET1 ratio was 15.9% at year-end 2024, up from 15.2% a year earlier, and the firm added $5.6 billion of CET1 capital over the year. The firm still repurchased $3.3 billion of common stock in 2024 and raised its quarterly dividend to $0.925 per share, reflecting confidence in capital generation.

What are the main drivers of Morgan Stanley's growth in 2024?

Growth came from Institutional Securities, where Investment Banking rose 35% and Equities hit a record, and from Wealth Management, where asset management revenues increased 18% on higher asset levels and positive fee-based flows. Net interest income in Wealth Management declined 10% due to lower sweep deposits. Investment Management benefited from higher average AUM driven by market levels.

Are there any risks or one-time items investors should be aware of?

Results benefited from favorable market conditions and client activity, which may not persist. Q4 provisions for credit losses increased to $115 million, driven by corporate loan growth and individual Wealth Management loan assessments, and the quarter included $62 million of charge-offs mainly in commercial real estate. Prior-year results included one-time items (severance, legal charge, integration costs, and an FDIC special assessment) that depressed 2023 comparisons, so year-over-year growth rates are somewhat flattered. The presentation's targets assume a normal market environment.

What are management's long-term targets?

The investor presentation lists firmwide goals of a ROTCE of about 20%, an expense efficiency ratio near 70%, a Wealth Management pre-tax margin of 30%, Institutional Securities wallet share gains, and client assets of over $10 trillion. Client assets stood at $7.9 trillion at year-end 2024, so management still has meaningful growth to deliver against the $10 trillion goal.

MORGAN STANLEY 8-K: Earnings & Results & Regulation FD

01—Abstract

Summary

Summary of the 8-K filed January 16, 2025. Cited figures are marked; the original filing is the authoritative source.

Morgan Stanley reported strong fourth-quarter and full-year 2024 results on January 16, 2025.

Fourth-quarter net revenues rose 26% year over year to $16.2 billion^a, and diluted EPS was $2.22, up from $0.85. Full-year net revenues reached a record $61.8 billion, up 14%, with net income applicable to Morgan Stanley of $13.4 billion and diluted EPS of $7.95 versus $5.18 in 2023. Full-year ROTCE was 18.8% and the expense efficiency ratio improved to 71% from 77%, reflecting both revenue strength and expense discipline.

Results were broad-based: Institutional Securities net revenues rose 22% for the year to $28.1 billion^b, with Investment Banking up 35% and Equities a record, while Wealth Management grew 8% to $28.4 billion and Investment Management grew 9% to $5.9 billion. Capital and shareholder returns remained strong. The Standardized CET1 ratio was 15.9% at year-end after accreting $5.6 billion of CET1 capital, and the firm repurchased $3.3 billion of stock during 2024.

The Board declared a quarterly dividend of $0.925^c per share, payable February 14, 2025. Wealth Management client assets reached $7.9 trillion across Wealth and Investment Management, and fee-based flows totaled $123 billion for the year.

The accompanying investor presentation frames management's Four Pillars strategy (strategy, culture, financial strength, growth) and sets firmwide goals of a 20% ROTCE, a 70% efficiency ratio, a Wealth Management pre-tax margin of 30%, and over $10 trillion^d in client assets. Investors should note that some results were helped by market conditions and mark-to-market effects, that provisions for credit losses rose in the fourth quarter, and that the presentation contains forward-looking targets subject to market and regulatory risks.

02—Key points

Key Highlights

Q4 2024 net revenues of $16.2B, up 26% YoY; diluted EPS of $2.22 vs. $0.85 a year ago; ROTCE of 20.2%.
Full-year 2024 record net revenues of $61.8B (+14%), net income applicable to MS of $13.4B, diluted EPS of $7.95 (vs. $5.18), and ROTCE of 18.8%.
Institutional Securities full-year net revenues of $28.1B (+22%), with Investment Banking up 35% and record Equities revenues of $12.2B.
Wealth Management full-year net revenues of $28.4B (+8%) with a 27.2% pre-tax margin; fee-based flows of $123B and net new assets of $252B.
Expense efficiency ratio improved to 71% for the year from 77%, while Q4 provision for credit losses rose to $115M from $3M.
Standardized CET1 ratio of 15.9% at year-end; $3.3B of buybacks in 2024 and a quarterly dividend of $0.925 per share (payable Feb 14, 2025).
Management reiterated firmwide targets of ~20% ROTCE, ~70% efficiency ratio, 30% Wealth Management pre-tax margin, and $10T+ in client assets.

03—Questions

Frequently Asked Questions

How did Morgan Stanley perform in the fourth quarter of 2024?
Net revenues were $16.2 billion, up 26% from $12.9 billion a year earlier, and net income applicable to Morgan Stanley was $3.7 billion, or $2.22 per diluted share, versus $0.85 a year ago. Pre-tax margin was 30% and ROTCE was 20.2%. Institutional Securities drove much of the growth, with net revenues up 47% year over year.
Is Morgan Stanley's capital position strong enough to support shareholder returns?
Yes. The Standardized CET1 ratio was 15.9% at year-end 2024, up from 15.2% a year earlier, and the firm added $5.6 billion of CET1 capital over the year. The firm still repurchased $3.3 billion of common stock in 2024 and raised its quarterly dividend to $0.925 per share, reflecting confidence in capital generation.
What are the main drivers of Morgan Stanley's growth in 2024?
Growth came from Institutional Securities, where Investment Banking rose 35% and Equities hit a record, and from Wealth Management, where asset management revenues increased 18% on higher asset levels and positive fee-based flows. Net interest income in Wealth Management declined 10% due to lower sweep deposits. Investment Management benefited from higher average AUM driven by market levels.
Are there any risks or one-time items investors should be aware of?
Results benefited from favorable market conditions and client activity, which may not persist. Q4 provisions for credit losses increased to $115 million, driven by corporate loan growth and individual Wealth Management loan assessments, and the quarter included $62 million of charge-offs mainly in commercial real estate. Prior-year results included one-time items (severance, legal charge, integration costs, and an FDIC special assessment) that depressed 2023 comparisons, so year-over-year growth rates are somewhat flattered. The presentation's targets assume a normal market environment.
What are management's long-term targets?
The investor presentation lists firmwide goals of a ROTCE of about 20%, an expense efficiency ratio near 70%, a Wealth Management pre-tax margin of 30%, Institutional Securities wallet share gains, and client assets of over $10 trillion. Client assets stood at $7.9 trillion at year-end 2024, so management still has meaningful growth to deliver against the $10 trillion goal.

04—Continue

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