Morgan Stanley Q1 Credit Loss Provision Jumps To $135 Million On 'Weakening Macroeconomic Forecast,' Equity Revenue Jumps 45%

On Friday, Morgan Stanley MS reported a first-quarter 2025 EPS of $2.60, up from $2.02 a year ago and beating the consensus of $2.21. Net earnings increased to $4.16 billion from $3.14 billion.

The U.S. bank reported first-quarter revenue of $17.74 billion, up 17% year over year, beating the consensus of $16.57 billion.

Morgan Stanley’s provision for credit losses jumped to $135 million, primarily driven by growth in secured lending facilities and in the corporate loan portfolio and the impact of a weakening macroeconomic forecast.

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The firm’s expense efficiency ratio was 68% in Q1 of 2025 compared to 71% a year ago. Expenses for the quarter included $144 million of severance costs related to a March employee action across business segments.

Morgan Stanley delivered a Return on Tangible Common Equity of 23% during the first quarter and 19.7% a year ago.

Institutional Securities reported net revenues of $9.0 billion, reflecting record performance in Equity and strong Investment Banking results on higher fixed-income underwriting.

Investment Management results reflect net revenues of $1.6 billion, primarily driven by asset management fees on higher average assets under management (AUM) of $1.7 trillion. The quarter included positive long-term net flows of $5.4 billion.

Equity net revenues increased 45% to $4.13 billion. The company said, “Record Equity net revenues reflect increases across business lines and regions, particularly in Asia, with outperformance in prime brokerage and derivatives driven by strong client activity amid a more volatile trading environment.”

Wealth Management reported net revenues of $7.3 billion in the current quarter compared with $6.9 billion a year ago. The business added net new assets of $94 billion, and fee-based asset flows were $30 billion for the quarter.

Asset management revenues increased 15% to $4.39 billion on higher asset levels and the cumulative impact of positive fee-based flows.

Ted Pick, Chairman and Chief Executive Officer, said, “The Integrated Firm delivered a very strong quarter with record net revenues of $17.7 billion and EPS of $2.60, and an ROTCE of 23.0%. Institutional Securities strong performance was led by our Markets business with Equity reporting a record $4.1 billion in revenues. Total client assets of $7.7 trillion across Wealth and Investment Management were supported by $94 billion in net new assets. These results demonstrate the consistent execution of our clear strategy to drive durable growth across our global footprint.”

Price Action: MS stock is up 1.32% at $107.99 at the last check Friday.

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