Morgan Stanley Reports Strong Q1 2025 Results With Record Revenues and Robust ROTCE

Morgan Stanley posted a strong start to 2025, reporting record net revenues of $17.7 billion for the first quarter, a 17% increase year-over-year. Net income applicable to the firm reached $4.3 billion, or $2.60 per diluted share, compared to $3.4 billion and $2.02 in the prior-year quarter. The return on tangible common equity (ROTCE) came in at 23.0%, up from 19.7% a year ago.

Institutional Securities led the performance with $9.0 billion in net revenues, driven by record equity trading revenues of $4.1 billion and solid results in fixed income and investment banking. Pre-tax income for the segment rose to $3.3 billion. Advisory revenues rose due to higher M&A activity, while fixed income underwriting also improved, helped by strong demand for non-investment grade loan issuances.

Wealth Management delivered $7.3 billion in net revenues, with a pre-tax margin of 26.6%. The segment benefited from higher asset management fees and net new assets totaling $94 billion. Fee-based flows were also strong at $30 billion. Compensation expenses increased slightly due to higher revenue levels, while non-compensation expenses remained flat.

Investment Management posted $1.6 billion in net revenues, a 16% increase over the previous year. Growth was attributed to higher average assets under management and increased carried interest in infrastructure funds. Pre-tax income for the segment reached $323 million.

During the quarter, Morgan Stanley repurchased $1.0 billion of common stock and declared a quarterly dividend of $0.925 per share. The firm ended the quarter with a CET1 capital ratio of 15.3% under the standardized approach.

Total expenses were $12.1 billion, including $144 million in severance costs due to a workforce reduction of about 2%. The firm’s expense efficiency ratio improved to 68% from 71% a year ago. Book value per share rose to $60.41, and tangible book value per share reached $46.08.