Morgan Stanley Delivers Record-Breaking Quarter Amidst Unpredictable Markets
Morgan Stanley has kicked off the year 2025 on a high note, reporting a record-breaking $17.7 billion in revenue and a significant increase in equity capital base.
In its latest Q1 2025 earnings call transcript, Morgan Stanley's Chairman and Chief Executive Officer, Ted Pick, highlighted the firm's strong performance despite the uncertain market conditions. The company's revenue grew by a substantial margin, with a record $4 billion-plus quarter in equities leading to strong results across institutional securities.
"The Firm delivered a very strong quarter," said Ted Pick during the call. "Wealth added $94 billion of net new assets, bringing our total to $7.7 trillion." The company's ability to attract and manage wealth has been a key factor in its success, with Morgan Stanley delivering returns while supporting clients, buying back stock opportunistically, and building capital.
Morgan Stanley's financial strength is reflected in its CET1 ratio of 15.3%, which provides the firm with ongoing flexibility in support of clients and shareholders. The company has also demonstrated a commitment to discipline, achieving sequential earnings of $2.02, $1.82, $1.88, $2.22, and now $2.60 over the last five quarters.
The market conditions are indeed uncertain, with rapidly changing probability assessments of different policy outcomes leading to overnight and intraday volatility in stock, bond, and currency markets. Economists believe the risk of recession has increased, but consensus is softer rather than negative growth. Inflation continues to swing between declining and sticky, making it unclear what the forward path of prices will be.
However, despite these challenges, Morgan Stanley remains confident in its ability to navigate this uncertain landscape. The firm's global reach and depth, insights and advice, capital markets access, and execution capabilities make it an attractive partner for clients looking to deploy and reallocate capital.
"It is worth noting that we just delivered a top line and bottom line record quarter," said Ted Pick. "While we are rightly focused on near-term uncertainties and disruptions in the markets, our approach is to prudently plan for the longer-term horizon." Morgan Stanley's strategy to raise, manage, and allocate capital for clients is crisp and clear, with an experienced and stable management team and a deep bench of talent committed to delivering long-term operating results.
Morgan Stanley's Chairman and Chief Executive Officer, Ted Pick, expressed confidence that the firm will navigate this moment of history resuming with focus and intensity. The company's ability to scale client wallet and drive long-term operating results has been demonstrated over the last five quarters, with a 23% return on tangible assets.
