Morgan Stanley (MS) Q2 2025 earnings summary

Executive summary

• Second quarter 2025 net revenues reached $16.8 billion, up 12% year-over-year, with net income of $3.5 billion and EPS of $2.13, capping a strong first half with $34.5 billion in revenue and $4.73 EPS year-to-date.

• Return on tangible equity (ROTCE) was 18.2% for the quarter, with return on equity at 13.9%.

• All business segments contributed to growth, with strong client activity, higher asset management revenues, and robust performance in wealth and institutional securities.

• Wealth Management added $59 billion in net new assets and $43 billion in fee-based flows, with total client assets at $8.2 trillion.

• Quarterly dividend increased to $1.00 per share, and a new $20 billion share repurchase program was authorized.

Financial highlights

• Institutional Securities net revenues were $7.6 billion, with strong performance in equities ($3.7 billion) and fixed income ($2.2 billion).

• Wealth Management net revenues were $7.8 billion, up 14% year-over-year, with a record pre-tax profit of $2.2 billion and a 28.3% margin.

• Investment Management net revenues increased 12% year-over-year to $1.6 billion, driven by higher AUM and positive long-term net flows.

• Net new assets in Wealth Management were $59 billion, despite a $22 billion tax outflow headwind.

• Provision for credit losses increased to $196 million from $76 million year-over-year, reflecting portfolio growth and macroeconomic outlook.

Outlook and guidance

• Management remains constructive on the market environment, expecting continued asset gathering, healthy investment banking pipelines, and durable long-term returns.

• NII is expected to remain stable in the near term, with lending growth and sweep balances as key drivers.

• The firm anticipates a tax rate of approximately 24% in the second half of the year.

• Expected SCB to decrease to 5.1% from October 2025, lowering the aggregate CET1 ratio requirement to 12.6%.

• Management continues to monitor regulatory developments that may impact capital requirements and leverage ratios.