How did Morgan Stanley's earnings compare with a year ago and with the prior quarter?

Versus a year ago, EPS rose to $2.13 from $1.82 and net revenues increased 12% to $16.8 billion. Versus the first quarter of 2025, net revenues fell 5% from $17.7 billion and EPS declined from $2.60, mainly because Institutional Securities revenue dropped 15% from an unusually strong first quarter.

What drove growth in the Wealth Management segment?

Wealth Management net revenues rose 14% to $7.8 billion, driven by higher asset management fees on larger asset levels and positive fee-based flows, a 17% increase in transactional revenue excluding DCP mark-to-market effects, and a 6% rise in net interest income from lending growth. The segment's pre-tax margin was 28.3%.

Is the dividend increase and buyback program sustainable and significant?

The quarterly dividend rose to $1.00 per share from $0.925, payable August 15, 2025. The Board also reauthorized up to $20 billion in share repurchases beginning in Q3 2025, without a set expiration. With a 15.0% CET1 ratio, the firm has capacity for these returns, though investors should watch whether quarterly buybacks remain near the $1.0 billion pace.

Why do the reported and adjusted (ex-DCP) figures differ, and which should investors focus on?

Deferred cash-based compensation plan (DCP) investments are marked to market, which moves net revenues and compensation expense in offsetting ways with timing differences. In Q2 2025 DCP reduced reported net revenues by $377 million, so ex-DCP net revenues were $16.4 billion. Reported GAAP figures are the primary measure, but the adjusted figures better show underlying business trends, especially in Wealth Management.

What risks or pressures are visible in the quarter?

Key pressures include a 9% rise in expenses year over year, with non-compensation costs up 9% on execution and technology spend; a sharp increase in credit provisions to $196 million from $76 million; a 23% quarter-over-quarter drop in Institutional Securities pre-tax income; and a lower Investment Banking performance, with advisory revenue down 14% year over year on fewer completed M&A deals.

MORGAN STANLEY 8-K: Earnings & Results

01—Abstract

Summary

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

Morgan Stanley reported second-quarter 2025 results on July 16, 2025, with net revenues of $16.8 billion^a (up 12% year over year from $15.0 billion), net income applicable to Morgan Stanley of $3.5 billion, and diluted EPS of $2.13 versus $1.82 a year earlier.

Return on tangible common equity was 18.2% for the quarter and 20.6% for the first half, and book value per share rose to $61.59^b. Growth was broad-based: Wealth Management revenue rose 14% to $7.8 billion on asset management fees, transactional activity, and net interest income, while Institutional Securities revenue grew 9% to $7.6 billion, led by Equity (up 23%) and Fixed Income (up 9%). Investment Banking revenue fell 5%, with advisory down on fewer completed M&A deals.

Quarter-over-quarter, net revenues declined 5% from $17.7 billion^c, largely because Institutional Securities fell 15% after an unusually strong first quarter, and pre-tax income dropped 17% to $4.6 billion. Expenses rose 10% year over year, and provision for credit losses increased to $196 million from $76 million, driven by corporate loan growth and a modestly weaker macro outlook. Management reported a 71% expense efficiency ratio for the quarter, and the Standardized CET1 ratio was 15.0%, versus 15.2% a year earlier.

Capital return remained a key theme. The company repurchased $1.0 billion^d of stock in the quarter, the Board reauthorized a multi-year buyback of up to $20 billion starting in Q3 2025, and the quarterly dividend was increased 7.5 cents to $1.00 per share. Investors should note that results are shaped by mark-to-market swings in deferred cash-based compensation plans (DCP), so adjusted figures (excluding DCP) show slightly lower net revenues of $16.4 billion.

02—Key points

Key Highlights

Net revenues of $16.8 billion, up 12% year over year, with net income applicable to Morgan Stanley of $3.5 billion and diluted EPS of $2.13 (vs. $1.82).
ROTCE of 18.2% for the quarter and 20.6% for the first half; ROE of 13.9%.
Wealth Management net revenues rose 14% to $7.8 billion, with net new assets of $59.2 billion, fee-based flows of $42.8 billion, and total client assets of $8.2 trillion across Wealth and Investment Management.
Institutional Securities net revenues rose 9% to $7.6 billion, with Equity up 23% and Fixed Income up 9%, offset by a 5% decline in Investment Banking.
Dividend raised 7.5 cents to $1.00 per quarter; $1.0 billion repurchased in the quarter and a new $20 billion multi-year buyback authorized beginning Q3 2025.
Capital remained strong, with a Standardized CET1 ratio of 15.0%, a Tier 1 leverage ratio of 6.8%, and book value per share of $61.59 (up from $56.80).
Provision for credit losses more than doubled year over year to $196 million, reflecting corporate loan growth and a weaker macro outlook; quarter-over-quarter net revenues fell 5% and pre-tax income fell 17%.

03—Questions

Frequently Asked Questions

How did Morgan Stanley's earnings compare with a year ago and with the prior quarter?
Versus a year ago, EPS rose to $2.13 from $1.82 and net revenues increased 12% to $16.8 billion. Versus the first quarter of 2025, net revenues fell 5% from $17.7 billion and EPS declined from $2.60, mainly because Institutional Securities revenue dropped 15% from an unusually strong first quarter.
What drove growth in the Wealth Management segment?
Wealth Management net revenues rose 14% to $7.8 billion, driven by higher asset management fees on larger asset levels and positive fee-based flows, a 17% increase in transactional revenue excluding DCP mark-to-market effects, and a 6% rise in net interest income from lending growth. The segment's pre-tax margin was 28.3%.
Is the dividend increase and buyback program sustainable and significant?
The quarterly dividend rose to $1.00 per share from $0.925, payable August 15, 2025. The Board also reauthorized up to $20 billion in share repurchases beginning in Q3 2025, without a set expiration. With a 15.0% CET1 ratio, the firm has capacity for these returns, though investors should watch whether quarterly buybacks remain near the $1.0 billion pace.
Why do the reported and adjusted (ex-DCP) figures differ, and which should investors focus on?
Deferred cash-based compensation plan (DCP) investments are marked to market, which moves net revenues and compensation expense in offsetting ways with timing differences. In Q2 2025 DCP reduced reported net revenues by $377 million, so ex-DCP net revenues were $16.4 billion. Reported GAAP figures are the primary measure, but the adjusted figures better show underlying business trends, especially in Wealth Management.
What risks or pressures are visible in the quarter?
Key pressures include a 9% rise in expenses year over year, with non-compensation costs up 9% on execution and technology spend; a sharp increase in credit provisions to $196 million from $76 million; a 23% quarter-over-quarter drop in Institutional Securities pre-tax income; and a lower Investment Banking performance, with advisory revenue down 14% year over year on fewer completed M&A deals.

04—Continue

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