This ranking evaluates how Fortune 500 companies are deploying AI, and how technology leaders value those investments relative to industry peers.

Fortune AIQ 75

The companies on the Global 500 employ 70.2 million people, and their revenue represents more than one-third of the world’s GDP.

Fortune Global 500

With a combined revenue of $21 trillion and $2.1 trillion in profits, the 2026 Fortune 500 is the definitive list of America's largest companies.

Fortune 500

The 300 companies on this year’s list brought in over $12.5 trillion in revenue for the latest 12 months, with the median revenue figure at $24 billion.

America's Most Innovative Companies

AI is a major force shaping this year’s list—but it’s far from the only story.

World's Most Admired Companies

Fortune AIQ 50

The corporations on our annual list of the world's 500 largest companies combined to generate $41.7 trillion in revenue over the past year.

Almost $20 trillion in revenue—and a record-breaking $1.87 trillion in profits. Introducing the 2025 Fortune 500, the definitive list of the biggest companies in America.

The 300 companies on this year’s list brought in over $12.6 trillion in revenue for the latest 12 months, with the median revenue figure at $22 billion.

Leaders in all industries rely more than ever on Big Tech—and appreciate the giants that deliver, at scale, without drama.

The corporations on our annual list posted aggregate revenues of $41 trillion for the second year in a row.

Industries included in the sector are banks, insurance, and real estate companies.

Fortune Sector Leaders: Financials

The Fortune 500, in its 70th year in 2024, ranks the biggest U.S. companies by revenue.

The 200 companies on this list are transforming industries from the inside out.

The 26th edition of the list shows how much esteem Big Tech giants command among other business leaders.

WMA 2024-Morgan Stanley

The 25th Fortune World’s Most Admired Companies list suggests that tech giants’ peers respect them as much as ever.

WMAC 2023-Morgan Stanley

The corporations on our annual list of the world’s largest companies delivered a record $41 trillion in aggregate revenues.

The 300 companies on this list are transforming industries from the inside out.

The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

F500-2023-061-Morgan-Stanley

The investment bank and financial services company saw modest revenue growth in 2022, but its profits slumped as dealmaking dried up in a rocky economy. 
<ul> 
 	<li>The bank reported $65.9 billion in revenue in 2022, up 8% from the year prior.</li> 
 	<li>Morgan Stanley’s profits dipped 27% to $11 billion as the firm’s investment banking arm struggled amid high inflation and a scarcity of M&amp;A deals.</li> 
 	<li>After some layoffs in 2022, the firm is reportedly planning more job cuts—3,000 or so—for 2023, with its banking and trading units enduring most of the reductions.</li> 
 	<li>James Gorman, the company’s CEO since 2010, announced in May that he would step down within the next 12 months. The company did not immediately name a successor.</li> 
</ul>

Just as it dominates our economy, Big Tech now dominates Fortune’s annual ranking of corporate reputation.

Aggregate sales hit $37.8 trillion last year—an increase of 19%, the highest annual growth rate in the list’s history.

This year’s Fortune 500 marks the 68th running of the list.

F500 2022-Morgan Stanley

Banks had a great 2021, and Morgan Stanley was no exception. The bank posted record net revenues (up 23%) and net income (up 37%) for the year, and its wealth management division added $1 trillion to client assets. Morgan Stanley also advised on several significant and big-ticket mergers this year, including Canada Pacific Railway’s $31 billion acquisition of Kansas City Southern to help create a Canada-U.S.-Mexico rail network. (The deal’s final approval was pending regulatory review as of May 2022.) The rate of mergers and acquisitions dropped significantly in the first few months of 2022, however, as geopolitical concerns and inflation left investors and corporate leaders feeling skittish.

After a year in which humanity leaned more heavily than ever on tech giants, see which companies topped Fortune's ranking of corporate reputation.

Total revenue for the world’s biggest companies fell 4.8% to $31.7 trillion this year—the first decline in half a decade.

G500-2021-204-Morgan Stanley

<span data-sheets-value="{&quot;1&quot;:2,&quot;2&quot;:&quot;What pandemic? Morgan Stanley appeared to weather the shutdowns seamlessly, even though CEO James Gorman was diagnosed with the coronavirus in March 2020. Boosted by surging capital markets (and without a consumer business to weigh it down during the lockdowns), revenue rose 16% to $48.2 million. The strong results seem validation of the bank’s decisions to spend billions of dollars doubling down on its brokerage and wealth management segments: In 2020, the bank acquired digital brokerage E*Trade for $13 billion and announced plans to acquire investment management firm Eaton Vance for $7 billion. The company’s upward trajectory hasn’t exactly been consistent, however. The bank lost about $911 million in the first quarter of 2021 owing to the collapse of family office Archegos Capital Management. While the firm still posted a record profit for the quarter, the incident is likely to present further challenges as regulators prod why financiers (including Morgan Stanley) had so much riding on a single client. \n&quot;}" data-sheets-userformat="{&quot;2&quot;:12673,&quot;3&quot;:{&quot;1&quot;:0},&quot;10&quot;:2,&quot;11&quot;:4,&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:11}">What pandemic? Morgan Stanley appeared to weather the shutdowns seamlessly, even though CEO James Gorman was diagnosed with the coronavirus in March 2020. Boosted by surging capital markets (and without a consumer business to weigh it down during the lockdowns), revenue rose 16% to $48.2 million. The strong results seem validation of the bank’s decisions to spend billions of dollars doubling down on its brokerage and wealth management segments: In 2020, the bank acquired digital brokerage E*Trade for $13 billion and announced plans to acquire investment management firm Eaton Vance for $7 billion. The company’s upward trajectory hasn’t exactly been consistent, however. The bank lost about $911 million in the first quarter of 2021 owing to the collapse of family office Archegos Capital Management. While the firm still posted a record profit for the quarter, the incident is likely to present further challenges as regulators prod why financiers (including Morgan Stanley) had so much riding on a single client.

This year’s Fortune 500 marks the 67th running of the list.

F500-2021-61-Morgan Stanley

For an astounding 13th straight year, Apple claims the top spot in Fortune’s annual ranking of corporate reputation, based on a survey of almost 3,800 executives, directors, and analysts.

This year's Fortune Global 500 generated $33.3 trillion in revenues and $2.1 trillion in profits.

G500-2020-203-Morgan-Stanley

Since the 2008 financial crisis, Morgan Stanley has increasingly leaned on its wealth management business as a steadier revenue source than trading or investment banking. Morgan Stanley has doubled down on the strategy with success: Last year wealth and investment management grew to 51% of the company's revenue, compared to 26% in 2010. Now the bank is spending billions to capture a younger, more tech-savvy clientele. In February 2019, Morgan Stanley acquired Solium Capital, which helps manage stock compensation plans for the likes of Instacart, Stripe, and Shopify, for $900 million. In early 2020, the bank titan made an even larger play for the masses by acquiring discount brokerage E*Trade Financial for $13 billion—putting it head-to-head with the likes of Charles Schwab and Robinhood.

This year's Fortune 500 marks the 66th running of the list.

F500-2020-061-Morgan-Stanley.

Since the 2008 financial crisis, Morgan Stanley has increasingly leaned on its wealth management business as a steadier revenue source, rather than on trading and investment banking. Morgan Stanley has doubled down on the strategy with success: Last year wealth and investment management grew to 51% of the company's revenue, compared to 26% in 2010. Now, the bank is spending billions to capture a younger, more tech-savvy clientele. In February 2019, Morgan Stanley acquired Solium Capital, which helps manage stock compensation plans for the likes of Instacart, Stripe, and Shopify, for $900 million. In early 2020, the bank titan made an even larger play for the masses by acquiring discount brokerage E*Trade Financial for $13 billion—putting it head-to-head with the likes of Charles Schwab and Robinhood.

Here are the World's Most Admired Companies for 2019 as ranked in their industries. See who made the list.

This year's Fortune Global 500 generated $27.7 trillion in revenues and $1.5 trillion in profits.

This year's Fortune 500 marks the 65th running of the list.

Here are the World's Most Admired Companies for 2018 as ranked in their industries. See who made the list.

This year's Fortune 500 marks the 64th running of the list.

Here are the World's Most Admired Companies for 2017 as ranked in their industries. See who made the list.

This year's Fortune 500 marks the 63rd running of the list.

Here are the World's Most Admired Companies for 2016 as ranked in their industries. See who made the list.

This year's Fortune Global 500 generated $27.6 trillion in revenues and $1.5 trillion in profits.

This year's Fortune 500 marks the 62nd running of the list.

The world's 500 largest companies generated $31.2 trillion in revenues and $1.7 trillion in profits in 2014. Together, this year's Fortune Global 500 employ 65 million people worldwide and are represented by 36 countries.

This year's Fortune 500 marks the 61st running of the list. Wal-Mart claims the top spot again. See who made the list.

Global business is back. After limping through a worldwide financial crisis and economic slowdown, the 500 largest companies ranked by revenues shattered all sorts of performance records in 2013: They racked up combined revenues of $31.1 trillion, up 2.5% from 2012, and profits soared 27% to nearly $2 trillion. China’s 95 companies (up from 89 last year) posted $5.8 trillion in revenues. The U.S. has four fewer companies on the list than last year but remains (for now) the country leader, with 128 corporations on the list—including No. 1 Wal-Mart Stores—reporting $8.6 trillion in revenues. 

Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

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Morgan Stanley is an investment bank and financial services firm. Its revenues are split between securities and wealth management; its securities business includes investment banking, underwriting, and advice on mergers and acquisitions. Its prominent subsidiaries include the self-directed investing platform E*Trade and the investment management firm Eaton Vance.

Q2 2026

Q1 2026

Q4 2025

Q3 2025

Q2 2025

Q1 2025

Q4 2024

Morgan Stanley (MS): Company Profile, Stock Price, News, Rankings

legacy

Morgan Stanley

morgan stanley

Good morning. Welcome to Morgan Stanley's 4th Quarter and Full Year 2024 Earnings Call. On behalf of Morgan Stanley, I will begin the call with the following disclaimer.

This call is being recorded. During today's presentation, we will refer to our earnings release, financial supplement and strategic update, copies of which are available at morganstanley.com. Today's presentation may include forward looking statements that are subject to risks and uncertainties that may cause actual results to differ materially. Please refer to our notices regarding forward looking statements and non GAAP measures that appear in the earnings release and strategic update. Within the strategic update, certain reported information has been adjusted as noted.

These adjustments were made to provide a transparent and comparative view of our operating performance. The reconciliations of these non GAAP adjusted operating performance metrics are included in the notes to the presentation or the earnings release. This presentation may not be duplicated or reproduced without our consent. I will now turn the call over to Chairman and Chief Executive Officer, Ted Pick.

Good morning and thank you for joining us. First, we would like to acknowledge our colleagues, clients, shareholders, friends and family in Los Angeles. Our hearts go out to all those impacted and dealing with the horrific devastation from the wildfires. We're grateful to all the firefighters and first responders. We are thinking of you.

Over the last several years, we've been faced with 2 central themes. 1, the end of financial repression, namely the passing of the era of ultra low interest rates the reemergence of inflation and 2, the end of the end of history with the resumption of geopolitical uncertainty. These paradigm shifts juxtaposed against renewed investor and corporate confidence present opportunities to support clients with exceptional advice and market access. Morgan Stanley is well positioned to execute against these opportunities. The firm's consistent execution is demonstrated by the cadence of top line and bottom line in 2024.

Revenues across the 4 quarters of $15,100,000,000 $15,100,000,000 $15,400,000,000

and earnings per share of $202,000,000 $182,000,000 $182,000,000 $182,000,000 $2.22 The 4th quarter was a top line record with the highest earnings per share in over 15 years, capping off one of Morgan Stanley's strongest years. For the full year, the firm delivered a return on tangible of 19% and earnings per share of $7.95 making significant progress toward our long term goals. The results reflect consistent durable earnings across the firm, evidencing that Morgan Stanley can deliver during this period of continued macroeconomic and geopolitical uncertainty. As we do every January, let's begin with our 2025 strategic update entitled 4 Pillars of Morgan Stanley, the integrated firm. The slides can be found on our website.

On Slide 3, we introduced the 4 pillars of Morgan Stanley to support our integrated firm: strategy, culture, financial strength and growth. Strategy is about consistently serving our clients and raising, managing and allocating capital. Culture is about rigor, humility and partnership. Financial strength is about strong capital and liquidity alongside durable earnings. And growth is about smart, strategic investments across the firm, which generate new opportunities to capture client share.

The investment thesis for Morgan Stanley rests on our ability to deliver the integrated firm supported by these four pillars. Slide 4. First, to reiterate Morgan Stanley's clear strategy to raise, manage and allocate capital for corporations, individuals, asset managers and asset owners around the world. In the past year, our engagement advice across the full range of institutional and individual clients drove results. Slide 5, Morgan Stanley culture is defined by rigor, humility and partnership.

The leadership group on the operating and management committees have an average tenure at the firm of more than 20 years, many of them across business segments and regions. More broadly, our leadership body of 2,312 Managing Directors, 173 of whom we recently promoted to the partnership have been with Morgan Stanley for an average of 15 years. 30% of our Managing Directors have been at the firm for 2 decades. Our partnership is defined by Morgan Stanley leaders who embody this homegrown culture, joined by acquisition and lateral talent who bring an incremental skill set to the platform. Morgan Stanley's culture of 1st class business in a 1st class way forged over many years of trial and success is a competitive advantage and will contribute to the success of the integrated firm.

Slide 6 highlights our position of financial strength, the 3rd pillar of the integrated firm as the output of a clearly defined strategy and a tightly knit culture. Our consistently strong capital position over recent years is a standout. In 2024, we accreted over $5,500,000,000 of CET1 while continuing to return capital to our shareholders. We will continue to prudently grow the dividend, continue to invest in each of our 3 businesses and across our infrastructure and continue to opportunistically repurchase the stock. In 2024, we effectively deployed capital to support clients and translated that into earnings growth.

High capital levels protect us in challenging climates and sustain us for long term growth. Slide 7 brings us to the 4th pillar of the strategy, revenue and earnings growth. Earnings expansion in 2024 reflects a return on multiyear investment to support clients. We will continue to invest heavily across the firm, in our talent, our clients, in E*TRADE and in Parametric, in our bank, across resiliency in technology and infrastructure, and in the development of the integrated firm. In the past year, expense growth was tempered by our focus on rolling off initial integration spend and taking opportunities to consolidate our real estate footprint.

Investments for growth will continue to be supported by ongoing disciplined prioritization of our expense base. Slide 8. The last 6 years show a step function change in the firm's growth across our businesses. In the Wealth and Investor Management segments, combined revenues have grown from $20,000,000,000 to $34,000,000,000 and total client assets have nearly tripled to $7,900,000,000,000 This growth has been achieved both by way of acquisition and through organic execution. You will also note that institutional securities vol share has grown by nearly 100 basis points.

These results reflect not only constructive markets, but also a sharpened focus on key client relationships and an expanded coverage of corporates and asset managers. Morgan Stanley Scale positions us over the long term to deliver growth in each of our three business segments. We win both through an expanding denominator of global securities, banking, wealth and investment management activity and by increasing our numerator as in our wallet share in each segment. In short, we seek to gain durable share in the secular growth businesses in which we participate. Slide 9 goes a level deeper into institutional securities.

1st, the growth in institutional securities has been both broad based and crucially is global. It is important that we are relevant in all the major regions around the world. Amidst geopolitical and interest rate uncertainty, each region grew revenues by roughly 20% in 2024. These results follow multiple years of investment in talent and leadership as well as efficient and disciplined RWA growth. In 2024, we saw institutional securities deliver an operating margin of 31% and revenue growth that was significantly higher than our RWA growth.

We are in a leadership position and can offer trusted advice and market access into the investment banking new issue and M and A cycle, which just lies ahead. Slide 10. In Wealth Management, investments in our self directed and workplace channels drive our differentiated client acquisition funnel. Today, with our expanded offering, we reach over $19,000,000 relationships and have added net new assets of over $250,000,000,000 in each of the past 2 years on track to delivering $10,000,000,000,000 plus of total client assets. An important indicator of wealth management momentum is fee based flows, which reached an exceptional $123,000,000,000 in 2024.

Delivering on new relationships and net new asset growth creates opportunities for our team of world class financial advisors to tap into the integrated firm for their clients. Slide 11 highlights the breadth and tenure of Wealth Management's client relationships as 60% of advisor led assets are associated with clients who have an average duration of 20 years. We retain 99% of our clients reflecting their enduring trust in Morgan Stanley. The slide illustrates our multi channel model, which continues to drive new assets to the platform. 30% of our advisor led assets are associated with clients over Morgan Stanley relationship of less than 10 years and 10% of advisor led assets are with clients of less than 2 years.

The client acquisition funnel supports durable growth, namely as clients mature with our financial advisors, they become the foundation for the continued growth of recurring fee based revenues. Slide 12. In Investor Management, we continue to focus on the secular growth areas of customization and alternatives. Our industry leading parametric platform, inclusive of Overlay, has grown to $575,000,000,000 In alternatives, our investable assets have more than doubled in size to $240,000,000,000 Investments in these secular growth areas have brought more balance to our investment management business and supported fee based revenues. Additionally, the integrated firm, particularly the relationship with Wealth Management, continues to benefit the Investment Management platform with the enhancement of retail oriented distribution offerings and additional product capabilities.

Slide 13, an area of investment is in the incremental growth of our U. S. Banks. Since 2018, the firm has significantly grown deposit balances and continues to source deposits from wealth management clients with an expanded product offering. On the asset side, we will continue to grow our wealth management lending capability by covering clients holistically as their financial needs evolve.

In addition, we will continue to utilize the bank platform to support growth in eligible institutional businesses. As we continue to grow our capabilities across the integrated firm, we are well positioned to provide a full suite of solutions to our clients. Slide 14, A dividend that is aligned to the growth of fee based earnings has been a leading priority. Our durable results demonstrate consistent execution of our strategy and we have raised our quarterly dividend by $0.075 for 3 years in a row to $0.925 per share. Slide 15.

As you've heard us discuss during the past year, the integrated firm brings together our world class wealth and investment management franchises with our world class institutional securities franchise. We are consistently strengthening the pillars underlying the integrated firm to deliver on our strategic goals. Across the integrated firm, Morgan Stanley is relevant to our clients, spanning from the advice dispensed in corporate boardrooms to our financial wellness programs for that company's employees. We're also the premier holistic partner to asset managers partnering with them to grow their businesses and to generate alpha. We can deliver institutional capabilities to our clients alongside sophisticated wealth management advice and distribution in an integrated service model, and in so doing, be mindful of potential conflicts.

To open 2025, we have formalized the integrated firm by positioning leadership talent at the center of client coverage, integrated data, risk management and infrastructure to drive growth as we serve more clients across their full suite of needs. This effort will be led by Mandel Crawley, a 3 decade Morgan Stanley executive and a member of our operating committee. Together with Co Presidents Dan Simpkiewicz and Andy Saperstein, the integrated firm organization is aligned to scale client opportunities across Morgan Stanley. Slide 16. The Morgan Stanley investment thesis is robust.

In 2024, we delivered top line and bottom line strength and consistency. The full year results are strong relative to our long term firm wide goals. We ended 2024 with total client assets at $7,900,000,000,000 wealth management pre tax margins of 27%, a firm efficiency ratio of 71% and a return on tangible of 19%. Of note, we added a new goal to achieve durable wallet share gains in institutional securities. The additional metric for institutional securities is an appropriate reflection of the expected contribution of this business segment to the firm's growth narrative.

The key word is durable. There will always be market and business cycles in each of these businesses. Morgan Stanley's trusted relationships over the very long term lead to superior results. Against the 4 pillars of strategy, culture, financial strength and growth, delivering the integrated firm is foundational to durable earnings growth and 20% returns through the cycle. Thank you.

Now Sharon will review our Q4 and annual results, then together we will take your questions.

Thank you and good morning. The firm produced revenues of $61,800,000,000 in 20.24 and ended the year with 4th quarter revenues of $16,200,000,000 For the full year, ROTCE was 18.8% and EPS was $7.95 For the Q4, ROTCE was 20.2 percent and EPS was $2.22 The full year efficiency ratio was 71.1%. Improved efficiency not only demonstrates our ability to grow revenues, but also to prioritize our controllable spend. Occupancy and equipment costs held flat, benefiting from the prior year's consolidation of our real estate footprint. During 2024, we took real estate charges of $62,000,000 which impacted full year EPS by $0.03 Professional services declined year over year aided by the roll off of integration related expenses and discipline across project spend.

These savings helped self fund investments across infrastructure to support growth such as expanding data centers capacity, renovations and technology modernization efforts. Self funding investments remains a priority. In the short run, similarly sized additional modernization efforts focused on decommissioning legacy technologies may result in higher amortization costs. This alongside business enabled innovation and process optimization with AI should support the firm's future efficiency path. Now to the businesses.

Institutional Securities delivered very strong annual results across business and regions, demonstrating the high quality breadth and depth of our world class global franchise. Full year revenues of $28,100,000,000 included our highest reported equity revenues and the highest results across combined equity and fixed income markets. The strong annual performance showcases our global footprint and our ability to capture client share amidst an increasingly constructive backdrop. 4th quarter revenues were $7,300,000,000 as markets remained active bucking the typical seasonal slowdown. We supported clients throughout the quarter and ended the year with momentum.

Investment Banking revenues were $6,200,000,000 for the full year, reflecting growth across regions and products. 2024 commenced with strong debt underwriting activity, followed by M and A announcements that picked up in the second half and ended with increased equity underwriting activity as the IPO market posted its highest volumes since 2021. 4th quarter Investment Banking revenues were $1,600,000,000 Results were largely driven by accelerating strength in equity underwriting as follow on and IPO issuance saw meaningful improvements across over the comparison period. We also saw corporates and sponsors take advantage of constructive markets in the quarter. Advisory revenues improved year over year on higher completed M and A transactions.

Looking ahead to 2025, our M and A pipelines are healthy and diversified, outpacing recent years. Financial sponsors are joining corporates to drive activity, evaluating exit opportunities for long held assets. CEO and Boardroom confidence continues to improve as valuation stabilize and financing markets remain strong. Our business is well positioned for strong continued rebound in deal making activity. Turning to equity.

We continue to be a global leader in this business, evidenced by record full year revenues of $12,200,000,000 These results reflect year over year growth across regions with record performance out of Asia, demonstrating the importance of having a global footprint. Full year results were supported by increased prime brokerage balances and our agility as we navigated the market well. Revenues were $3,300,000,000 in the 4th quarter. Following the U. S.

Elections, clients rerisk quickly given shifting market dynamics. Additionally, 3rd quarter strength in Asia carried into the 4th quarter with renewed investor interest across the region. Prime brokerage revenues were a record for the business as clients remained engaged and balances rose to peak levels. Cash results increased year over year consistent with higher levels of client engagement and volumes. Derivative results increased versus last year's Q4 on the back of higher activity across a variety of products, in line with improved risk appetite from clients.

Fixed income revenues were $8,400,000,000 for the full year, driven by consistent quarterly performance across the businesses. The full year results demonstrate our multi year efforts to re center our fixed income business around the integrated firm, improved trading performance, growth in durable lending revenues and servicing corporate and sponsor relationships all contributed to results. Quarterly revenues were $1,900,000,000 driven by credit products and commodities. Micro revenues were above historical quarterly averages. Results were driven by securitized products, which benefited from higher loan balances and an increase in securitization activity.

Macro performance was relatively flat versus the prior Q4. Commodity revenues improved year over year. Results were led by our North America Power and Gas business, where structured opportunities for corporate clients leveraged the integrated firm. Turning to ISG lending and provisions. For the full year, ISG provisions were $202,000,000 $78,000,000 for the quarter.

The quarterly provision was driven by portfolio growth and a build in a handful of individual assessments. For the full year, ISG net charge offs were $210,000,000 For the quarter, net charge offs were $62,000,000 primarily related to several commercial real estate loans, which were largely provisioned for in prior quarters. Turning to Wealth Management. 2024 was a strong year for Wealth Management. Full year highlights include records revenues of $28,400,000,000 pre tax profit of $7,700,000,000 and a reported margin of 27.2%.

The strength of our scaled and differentiated client acquisition funnel continues to set us apart. Fee based flows were $123,000,000,000 exceeding $100,000,000,000 for the 4th consecutive year. Clients continue to seek Morgan Stanley's advice, supporting our thesis that as assets move through this funnel, incremental revenue growth and margin expansion will follow. For the Q4, revenues were $7,500,000,000 and the reported PBT margin was 27.5%. DCP and real estate related charges negatively impacted the quarterly margin by approximately 140 basis points.

Asset Management revenues in the quarter set a new record of $4,400,000,000 showcasing the progress we have made to durable fee based revenues. With each quarter this year, asset management revenues saw sequential improvement powered by constructive markets and consistently strong fee based flows. 4th quarter fee based flows were $35,000,000,000 Importantly, over the last two years, we have seen an increase in the number and the pace of assets migrating from advisor led brokerage accounts to fee based accounts. We remain an industry leader in organic growth. Net new assets for the quarter were $57,000,000,000 Full year NNA of $252,000,000,000 represents approximately 5% annual growth of beginning period assets.

This year, our advisor led channel drove the results, benefiting from both existing clients and new clients coming to the firm. Transactional revenues for the quarter were $1,000,000,000 Excluding the impact of DCP, transactional revenues represent the highest level of activity we have seen since the peak in 2021. Higher retail engagement in equity related products and demand for alternative products supported results. These revenues will continue to benefit from the breadth and the depth of our growing alternatives platform. Bank lending balances were $160,000,000,000 Loan growth of $4,000,000,000 was driven by securities based lending where we saw demand for new lines and a decline in the pace of paydowns.

Total deposits increased 3% sequentially to $370,000,000,000 driven by higher sweep balances. End of period sweep deposits have increased for 2 consecutive quarters, supporting the view that as rate dynamics change and markets turn to be more constructive, sweep balances will be increasingly transactional in nature. While clients deployed more sweep cash into rising markets, particularly in December, balances held strong as clients showed less rate sensitivity with their transactional cash. Net interest income was $1,900,000,000 in the quarter. The sequential increase was primarily driven by higher sweeps.

Looking ahead into 2025, the combination of a more stable deposit mix, higher lending balances and the rate outlook suggest that Q1 NII should not fluctuate materially from our Q4 results. We are intently focused on driving additional growth across channels. In our advisor led channel, our effectiveness in deepening relationships is evidenced by our consistently strong fee based flows. In Workplace, our recently announced partnership with Carta puts us at the center of new client stock plan opportunities as private companies consider going public. And in self directed, the number of active traders on the E*TRADE platform grew, ending the year at levels higher than 2022.

Moving to Investment Management. The business reported annual revenues of $5,900,000,000 and quarterly revenues of $1,600,000,000 Our AUM reached a new peak at year end of $1,700,000,000,000 supported by market gains and net inflows. Long term net inflows were $4,300,000,000 in the quarter, driven by continued demand for our fixed income strategies and parametric customized portfolios. This brings 2024 long term net inflows to $18,000,000,000 Within alternatives and solutions, Parametric remains a key differentiator for Emsom. Growth of the brand will be supported by investments in technology, ongoing education for retail clients on the benefits of customization and tailored solutions for asset managers.

Liquidity and overlay services had inflows of $67,000,000,000 on the back of strong fund performance and seasonality, some of which may reverse in the Q1. 4th quarter asset management and related fees of $1,600,000,000 increased 11% versus the prior year, driven by higher average AUM. As a reminder, performance fees are recognized on an annual basis, largely in the 4th quarter, which drove the increase sequentially. Quarterly performance based income and other revenues were $88,000,000 Gains were concentrated in infrastructure, U. S.

Private equity and private credit. In parallel with wealth management, Emsim is helping to deliver our asset led strategy. Our efforts to build a business that is well diversified and focused on secular growth areas as well as global opportunities gives us confidence to drive incremental growth. Turning to the balance sheet. Total spot assets were $1,200,000,000,000 Over the course of 2024, we demonstrated velocity of resources.

Standardized RWAs declined sequentially to $473,000,000,000 driven by year end seasonality and market dynamics. Lower RWAs at period end have already begun to reverse as we enter a new calendar year. During the year, we accreted over $5,500,000,000 of common equity Tier 1 capital and our standardized CET1 ratio ended the year at 15.9%. For the full year, we bought back $3,300,000,000 of common stock. Our tax rate was 23.1% for the full year.

The quarterly tax rate was 24.1%, reflecting the level and the mix of earnings. We expect our 2025 tax rate to be approximately 24%. And consistent with prior years, we expect some quarterly volatility. As we look ahead into 2025, our franchise is well positioned for growth, exiting the year with momentum across all of our businesses with a strong capital position to invest in our clients and our businesses. We entered the year with record asset levels, healthy and diversified pipelines an engaged and institutional retail client base and a strong global brand.

We are focused on disciplined execution as we progress towards our goals. With that, we will now open the line up to questions.

We are now ready to take in We'll take our first question from Glenn Schorr with Evercore.

Good morning, Glenn. How are you doing? Glenn, how are you?

right. Appreciate it. Where to begin? I guess, let's talk about trading. There's a lot of upside in trading.

We've all seen great trading environments and this certainly was a good one. But I wonder if you could just try to parse out what's how you think about great trading environment versus what your words are just more durable, the higher client balances, the record PB, the share gains and how you're going to measure the success of those durable gains? I'm just trying to separate your actions versus the environment. You certainly have been performing really well. Thanks.

Appreciate that. The focus on institutional securities over the last number of years is of course to deliver to key clients the whole product set across what, as you know, we called at one point about 5, 6 years ago, I think it was in 2018, the Integrated Investment Bank. And that was the bringing together of folks in equities, fixed income, capital markets and investment banking, minding obviously all the walls between them, but having folks mobilized across those divisions, across the regions and really understand what life is like to sit in the shoes of folks in different divisions. And as you know, in this business, you don't actually know what that feels like unless you're in that business. So we had leaders moving around.

And 6 years later now with ISG under Dan Simkowitz's leadership, we're able to in an environment that is friendly to a lot of the businesses because now we have real corporate finance activity, we have real interest rates and you have effectively two way markets in lots of places around the world with respect to central bank activity, with respect to buyers and sellers of assets. And of course, if you're well organized, you can prosecute that in an orthodox way. We have during this period under leadership of Sharon in the office of CFO been quite prudent on the deployment of those risk weighted assets through our Chief Risk Officer, Charles Smith. How do those risk weighted assets and GAAP balance sheet get deployed to clients? One mistake, Glenn, is you can lose the forest of the trees and not think about all the client touch points across the integrated firm, we're calling it, or you can actually lose sight of the real drivers of what makes that client valuable to the institution.

And now we've had 6, 7 years of really focusing on that and preparing ourselves for the ability to expand our wallet at a time where we believe the denominator is growing as well. It's a little trickier to try to expand the numerator, your wallet, when the denominator is not moving as was the case with 0 interest rates because you are effectively not a price maker and you are potentially going to be taking some concentrated risk. But here now with the cycle having transitioned, we were able to lean in, 1st across our sweet spot, which is equities, to have not just prime brokerage, but the cash equities and derivatives businesses really start to generate, above cost of capital ROEs. So the entire basket of equities offering, to our clients, but then in fixed income, which has been extraordinarily stable in in what is intrinsically an unstable business given the very different businesses of commodities, interest rates, foreign exchange and credit. And the leadership there, Hallick and Hoarder have done a brilliant job, really running a durable business with a lot of annuitized revenue around a well considered financing, structuring, lending businesses that look quite like the businesses we have in classic underwriting, such that when we now go into this investment banking cycle, where we do think there is going to be an acceleration of classic primary and secondary offerings, we're already doing business that looks like that inside of sales and trading, lending businesses, client advice, and of course there's real collegiality across the investment bank.

The last piece to this is what we've been waiting for, which are M and A tickets, which is, you know, are the top of the waterfall, the highest margin product that then have multiplier effect to the whole organization and that has begun. The pipeline is very strong depending on how you measure it, the strongest it's been in 5 to 10 years, maybe even longer. And we are excited about pushing that through to the rest of the investment bank. What I've said and I would repeat here too, just to give a lengthy answer, Glenn, is that on ISG Wild Share, we are clear that we want those share gains to be durable, which is why we didn't go with quantification. We want those gains to be ones that are not gains by reaching concentration risk, counterparty risk, but the clients know we are serious about bringing ISG to the fore and that the integrated firm now is bringing together these world class wealth and investment management businesses with our investment bank.

And the proof is in the pudding. This past year, 100 basis point gain plus or minus in the investment bank to roughly 15% wallet in a growing denominator. And as you can tell, given we've been quite disciplined on RWA growth against that and you see the operating leverage in the income statement, it's fair to say the institution at large is very excited.

That was a very full answer. I really appreciate it. I'll cede my follow-up to the group. Thanks.

We'll take our next question from Ebrahim Poonawala with Bank of America.

Hey, good morning. I guess maybe just I know this is you've addressed this in prior calls, but as we think about just investments in systems as it pertains to AML, BSA on the wealth management side, if you don't mind addressing where the firm stands there today in terms of sort of meeting all the highest standards from a regulatory compliance standpoint? And I think the essence of my question is, as we think about the growth opportunity in terms of international wealth, do you need to sort of get your ducks lined up on the AML BSA front in order to pursue those more aggressively or actively? Thanks.

Thank you for the question. I think that the way I would answer your question is more fulsome than just specifically looking at one particular sector. The point that I would underscore is the results themselves in this business speak for themselves in terms of the investment, the ability to attract clients, both existing assets as well as new clients across the wealth management platform. So that's the first point that I would make. 2nd point that I would make is that over the course of the not just the last year, but really multiple years, We've been investing in all of our processes and our systems in order to engage and make sure that we have a robust infrastructure in order to be allowed to grow broadly and meet all of our growth objectives.

And that has to do with everything that I mentioned across the technology side, across better understanding our data, better servicing our clients in terms of investment dollars and in terms of the underlying infrastructure. So what we're trying to do and what we've been actively pursuing is making sure that across the firm, not just specific to wealth, we can service and look and impact all of our clients. And moreover, you can see that very well in terms of our ability to actually continue to attract assets. We'll be making all of the necessarily investments to continue to be world class, both across people and our technology.

Got it. Thank you. And I guess, separate question, Slide 13 with regards to the investment into the bank. Just remind us in terms of the where we stand in terms of the integration of the bank? And as we think about with some of your peers where the bank and the wealth businesses probably are fully integrated, are we there yet?

And then what's the opportunity when you think about just deposit growth from your wealth management clients that you can bring onboard?

We're definitely not there yet. We are we still have a lot of to do when we think about the bank. I've always both internally and for those for many externally have felt that the bank itself is an incredible growth engine across the institution. If you look at our bank, we obviously started our bank much later than many of the peers that we now compete with from a commercial bank perspective. We have a very different deposit mix than others.

And what's so interesting our deposit mix is that over 70% of our deposits come from our wealth management clients. Now there is that's currently, as you know, is largely coming from sweeps and for savings accounts. There's much more that we can do when we think about the deposit franchise itself and then we can talk a little bit also about the other side of the balance sheet. But we're investing in those deposit opportunities. Remember, we didn't really have bank rails until we bought E*TRADE.

That was part of the value proposition of acquiring E*TRADE and working with those bank rails to offer real checking accounts and continue to have a savings account offering. Moreover, as you think about the work we're doing to invest the banking products within workplace, you now have different ways to manage cash and cash alternatives for the actual underlying employees as Ted talked about from an integrated firm perspective. So there's much more that we can do with servicing and growing that deposit base over time. As you think about the lending side and you think about where we are, we continue to see opportunities to help our wealth clients as they expand their lending needs and we better understand their portfolios. Moreover, just holistically, as Ted mentioned in the slide, there are places where we are still working to move eligible ISG assets onto the bank.

That should help institutional securities as you think about the actual funding profile associated with those assets. So there are many places that when you look overall at the integrated firm, the bank plays an important role in making sure we have the ability to see that grow.

Yes. Ebrahim, I'll tag on to that deposit side. We're going to service clients across all three channels in wealth, the FA channel, the everyday transaction offering, cash plus type of offering in E*TRADE. We're going to continue to focus on checking accounts with competitive rates, integrating products into the client journey as they move along with E*TRADE to potentially a classic FA. And then as you know, we've been really banging the drum on Workplace where we can partner with companies to reach employees.

And on the loan side, as Sharon said, we've been growing loans steadily. The loans number in wealth, as you know, was about 80 in the Q4 of 2018. That's doubled to 160. We grew that every quarter in 2024. We're a bank, we lend and we have to do that in the context of deepening relationships.

We lend to about 16% of our households and the best in class peers are higher. They're 50% higher, mid-20s. So as Sharona said, there's real opportunity. And then in ISG, we've been growing the lending capability there too, up about 15% year over year. So there is real focus on this and upside, but there's also been, I think, back to the concept of owning Morgan Stanley as a durable instrument that we are growing both deposits and loans in a smart way over the next 5, 10 years, you could expect these numbers to continue to move higher.

We'll move to our next question from Brennan Hawken with UBS.

Hey, Ted. Good morning. How are you? Good. Would love to follow-up on that some of that last discussion and talk about the loan growth because it seems like loan growth was the trends were better than certainly many were expecting last year.

And it feels like given the expectation for capital markets reopening, improving risk appetites, we should continue to see that building momentum. Could you talk a little bit below the surface around what you're seeing on the loan side? You spoke to it at a really high level before, but I'd just love to drill down and hear what you're seeing more recently. And then where do you stand from a capability perspective? Do you guys need to continue to build that out?

Or do you feel like you're fully ramped from a competitive perspective?

Thanks, Bren. I'll take that. As I mentioned in my prepared remarks, as you alluded to, what we saw, if you remember over the last since really interest rates when they began to rise, we saw a decline in the use of the SBL product and we often actually saw an increase in pay downs. What's changed over the last particularly we noted at this quarter is we've seen that pace of pay downs decline and then we've actually seen an increased use of the lines. The important part there is as you know probably better than anyone else is that that product is one that is often generally used in periods of time by our clients when you actually see markets rise.

And I wouldn't be surprised if we also begin to see it from a tax perspective as we enter the 2nd part of the quarter. In terms

capabilities, I think we have the capabilities. There's clearly places you can still look from a tailored perspective. There's still capabilities when you think about the assets that we can move from an eligible perspective from the ISG side onto the bank. So it's a different portion of the question in terms of what we're doing from a legal entity perspective. But overall, I think we're very happy with what we have from the wealth management perspective.

And it's really about seeing the change in environment that should help the dynamics as we move forward to see that increase in loan growth.

And I think integrated firm matters here because there is the ability for us now in our risk committee sessions to look at tailored lending as a form of sophisticated structured product that has some institutional qualities to it. So it's not so much the classic bifurcation of division by division, but more of a firm lens across what the commitments are at a time when we should see acceleration in both of the major sides of the house.

That's interesting when thinking about utilizing balance sheet. Thanks for that. I'm really sort of happy to ask this next question because of the focus on cash in the past year or so. And now I don't have to worry about drawing Sharon's ire when I ask about this.

a pivot around cash trends. We've got stability and even a little growth in the sweep. And when you think about prior easing cycles, what has how long has it taken before we see some of the recycling out of those yield oriented cash equivalents like CDs and money funds, which tend to be thinner margin into more market oriented products that are higher margin? How should we be thinking about that timeline? Thanks.

Brennan, it might be the first time in 2 years that I'm excited to answer a sweeps question. I am really encouraged by the signs that we see on the underlying sweeps dynamic. It often actually plays to the fact that there is a lot that our clients can do and a lot that our clients are interested in right now. You see that in the transactional level of activity and all of the underlying trends as it relates to sweeps are actually playing out in that increase in transactional. So if I can just break it down, what we see, right, we look at sweeps and we look at the underlying sweeps in multiple different layers.

So how do you think about where the sweeps are going to products that are under 1 year? How do you look at sweeps in terms of products over 1 year in terms of fixed income? And how do you look at sweeps going in and out of market? What you saw this particular quarter, which I found to be quite encouraging and fascinating in terms of the sentiment of the retail investor actually changing is that we saw a really strong increase of the flows moving from sweeps into market. So it's not as though they aren't using that cash to invest.

They're just using that cash to look at it more transactionally to go into market and asset level products. That's point number 1. Point number 2 is you began to see the fixed income products that were over 1 year mature and just sit there. So it's as though when you think about what is the retail client doing, they're waiting, they're getting those assets, they're letting it mature and it's just sitting in some sort of sweet product until they want to deploy those assets into the market. The final point is, you're just seeing less activity go into various types of cash alternatives.

And in my mind, that just means that this cash, now that rates have come down, that markets are going up, it feels to be somewhat more normalized. It's acting transactional, which is what we had always assumed. There would be some level of transactional cash. And to your point, as that rate differential goes down and it's no longer you can earn 5% from a cash product, There are places and decisions of what individuals want to do with that cash. They're letting it sit and they're using it to eventually invest in markets.

And what you're seeing is that that is actually taking place in the transactional line item.

We'll take our next question from Mike Mayo with Wells Fargo.

Hi. Well, last, Ted, last quarter you were pretty pulled up on the markets and some of that's playing out. But so how much are your backlogs up? Are backlogs a record?

I'm not hearing record backlogs anymore. I hear it up, but not record. I'm just wondering how much you can monetize the backlogs that were in place in some cases, I guess, 1, 2 or 3 years ago?

Yes. Depending on how you measure it, whether a volume or unit number of units for sort of ag value, you see pipelines in the M and A product that are the highest in 7 years. So that is really encouraging. Now some of this will be dependent on how things roll out in the 1st couple of months of the incoming administration and how things feel on a cross border basis. But the pent up activity that we're seeing is starting to release.

You saw some announcements going into the end of the year. You saw some very large capital raises that took place where enormous capacity was filled for great names over a weekend or over a 24 hour period. And that we haven't seen that since really 2020 and that was totally different interest rate and backdrop context. So there is clearly demand even discussions for IPO potential not just as an option versus selling to another sponsor or selling to a corporate, but in fact a real option. So I am you're right, I've been bullish on this.

Morgan Stanley (MS) Q4 2024 Earnings Call Transcript

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