Morgan Stanley Q3 2025 presentation slides: net income surges 45% YoY, revenues up 18%

Introduction & Market Context

Morgan Stanley (NYSE:MS) released its third quarter 2025 financial results on October 15, showcasing substantial growth across all business segments. The financial giant’s stock responded positively to the strong performance, rising 6.22% in regular trading following the announcement, after gaining 3.48% in pre-market activity.

The company’s presentation revealed impressive year-over-year growth in both revenue and profitability, reflecting strong execution across its diversified business model spanning institutional securities, wealth management, and investment management. This performance comes amid a favorable capital markets environment that has boosted investment banking and trading activities.

Executive Summary

Morgan Stanley reported net revenues of $18.2 billion for Q3 2025, representing an 18% increase compared to the same period last year and a 9% rise from the previous quarter. Net income applicable to Morgan Stanley reached $4.61 billion, surging 45% year-over-year and 30% quarter-over-quarter. Earnings per diluted share came in at $2.80, significantly exceeding analyst expectations of $2.09.

As shown in the consolidated financial summary below, the firm demonstrated strong growth across all key metrics:

The company maintained robust financial ratios, with a pre-tax margin of 33%, return on average common equity of 18.0%, and return on average tangible common equity (ROTCE) of 23.5%. These metrics underscore the company’s operational efficiency and strong returns for shareholders.

Quarterly Performance Highlights

All three of Morgan Stanley’s business segments contributed to the quarter’s strong performance. Institutional Securities generated net revenues of $8.52 billion, Wealth Management contributed $8.23 billion, and Investment Management added $1.65 billion.

The Institutional Securities division, which includes investment banking and trading activities, posted a pre-tax margin of 37% and a return on average common equity of 19%. Investment banking revenues reached $2.11 billion, with underwriting activities contributing $1.42 billion.

Wealth Management continued to be a significant growth driver, with total client assets reaching $7.05 trillion. The division generated net revenues of $8.23 billion and achieved a pre-tax margin of 30%. Asset management revenues of $4.79 billion formed the largest component of the segment’s revenue, followed by net interest income of $1.99 billion.

The division also demonstrated strong client acquisition and retention capabilities, with net new assets of $81.0 billion for the quarter. Fee-based client assets in the advisor-led channel reached $2.65 trillion, representing 49% of total advisor-led assets.

Investment Management showed solid performance as well, with total assets under management or supervision reaching $1.81 trillion. The segment recorded net revenues of $1.65 billion and achieved a pre-tax margin of 22%.

The division experienced strong net inflows of $41.3 billion during the quarter, with particularly robust flows in Alternatives and Solutions ($14.2 billion) and Fixed Income ($8.4 billion).

Detailed Financial Analysis

Morgan Stanley maintained a strong balance sheet with total assets of $1.36 trillion as of September 30, 2025. The company’s capital position remained robust, with a Common Equity Tier 1 capital ratio of 15.2% under the Standardized Approach and 15.7% under the Advanced Approach, well above regulatory requirements.

The firm’s average liquidity resources stood at $368.1 billion, providing substantial flexibility to navigate market conditions and pursue strategic opportunities. Total deposits reached $405.5 billion, while loans totaled $277.3 billion.

Morgan Stanley’s loan portfolio remained diversified across corporate lending, secured lending facilities, and residential real estate. The consolidated loans and lending commitments totaled $479.4 billion, with Institutional Securities accounting for $287.1 billion and Wealth Management for $192.3 billion.

Credit quality remained strong, with an allowance for credit losses of $2.0 billion, representing 0.4% of total loans and lending commitments. The provision for credit losses was minimal during the quarter, reflecting the high quality of the firm’s loan portfolio.

Strategic Initiatives & Forward-Looking Statements

According to the earnings call transcript, CEO Ted Tick emphasized that "the capital markets flywheel is taking hold," highlighting the firm’s strategic momentum. The company aims to reach $10 trillion in total client assets and anticipates a modest sequential gain in net interest income for Q4.

Morgan Stanley continues to invest in artificial intelligence capabilities, with the CFO noting that they are "just scratching the surface of what [AI] can do." The company is also expanding its digital asset capabilities while maintaining its leading position in equities and investment banking.

The firm’s strong capital position provides flexibility for continued investments in growth initiatives, technology enhancements, and potential capital returns to shareholders. With a healthy current ratio of 2.14 and impressive revenue growth of 16.92% over the last twelve months, Morgan Stanley is well-positioned to capitalize on market opportunities while navigating potential macroeconomic challenges.

As global markets continue to evolve, Morgan Stanley’s diversified business model, strong client relationships, and robust financial position should enable the company to sustain its growth trajectory and deliver value to shareholders.

Full presentation:

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