Morgan Stanley · NYSE:MS

Morgan Stanley — Debt Investor Presentation (May 2017)

18 slides from Morgan Stanley's debt investor presentation, May 5, 2017

  1. Slide 1: 1Q17 Fixed Income Investor Update

    ​Morgan Stanley 1Q17 Fixed Income Investor Update May 5, 2017

  2. Slide 2: Notice

    Notice The information provided herein may include certain non-GAAP financial measures. The reconciliation of such measures to the comparable GAAP figures are included in the Company’s Annual Report on Form 10-K, Definitive Proxy Statement, Quarterly Reports on Form 10-Q and the Company’s Current Re

  3. Slide 3: Agenda

    Agenda Business Update Section 1 Liability Management Section 2 Capital Management Section 3 Liquidity Management Section 4 MORGAN STANLEY 1Q17 FIXED INCOME INVESTOR UPDATE | MAY 5, 2017 3

  4. Slide 4: Business Summary Update

    1 Business Summary Update Last Twelve Month Continued Execution of Strategic Plan Net Revenues ​Firm Revenues, ex-DVA ($Bn)(1) 1Q17 Highlights 36.6 • Record Wealth Management revenues of $4.1Bn, with a pre-tax margin of 32.5 24.0%(3) • #1 globally in Equity Sales & Trading(4) • Fixed Income Sales &

  5. Slide 5: Focused on Operating Leverage and Maintained Expense Discipline

    Focused on Operating Leverage and Maintained Expense Discipline ​Firm Revenues, ex-DVA ($Bn)(1) 36.6 +12% 32.5 9.9 +44% Pre-Tax Profit(1)(2) 6.9 Compensation Expense(1) 15.2 16.7 +10% Non-Compensation Expense(1) 10.5 10.0 (5)% 1Q16 LTM 1Q17 LTM ​Expense Efficiency Ratio, ex-DVA(1)(3): 78.8% 72.9% 1.

  6. Slide 6: Returning Excess Capital, While Maintaining Financial Strength

    Returning Excess Capital, While Maintaining Financial Strength ...while Maintaining Strong Capital Position and Increased Capital Return to Shareholders… Conservative Risk Profile Morgan Stanley Capital Return ($Bn) Avg. Common Equity, Fully Phased-in 4.8 ex-DVA ($Bn)(1) Advanced RWAs ($Bn)(2) 70 50

  7. Slide 7: Liability Management: Continued Shift in Funding Mix to More Durable Sources

    2 Liability Management: Continued Shift in Funding Mix to More Durable Sources PRIMARY SOURCES OF FUNDING PERCENTAGE POINT % OF FUNDING MIX FUNDING MIX(1) CHANGE SINCE YE 2013(1) Weighted average maturity of 6.4 years; 35% Long-Term Debt Morgan Stanley issues predominantly 6% from the holding compan

  8. Slide 8: Unsecured Borrowings: Key Source of Funding

    Unsecured Borrowings: Key Source of Funding Unsecured Debt Issuance(1) ($Bn) 42 Q1’17 Highlights 38 34 • Issued $18Bn in Q1 34 30 • Net positive issuance 28  Continue to issue majority of unsecured debt from the Parent 18  Diversified across tenors, currencies and channels 11 • Long-term unsecured

  9. Slide 9: Bank Deposits Provide Durable Funding Source

    Bank Deposits Provide Durable Funding Source Bank Deposit Program Growth Attractive Deposit Characteristics Bank Deposit Program Balances ($Bn) Bank Deposit Program Balance / Total Client Assets (%)(1) 8 8 8 7 153 7 7 7 7 7 149 149 128 104 '09 '10 '11 '12 '13 '14 '15 '16 1Q17 Average BDP Cost(2) (bp

  10. Slide 10: Four Pillars of Secured Funding Ensure Durability and Stability

    Four Pillars of Secured Funding Ensure Durability and Stability Underlying Principles of the Four Pillars of Secured Funding 1 2 ​SIGNIFICANT WEIGHTED AVERAGE MATURITY (“WAM”) ​MATURITY LIMIT STRUCTURE • Criteria-based model sources term funding consistent with • Reduces roll-over risk liquidity pro

  11. Slide 11: Well-Established Governance Framework Ensures Stability Consistent with Asset Profile

    Well-Established Governance Framework Ensures Stability Consistent with Asset Profile Rules-based Criteria Determine Asset Fundability Fundability Criteria Fundability Definition • Eligible for financing through Open Market Operations (“OMO”) and/or OMO ELIGIBLE GOVT. SEC / AND / OR GOVT. FULL SECUR

  12. Slide 12: Well Positioned For Upcoming TLAC Requirements

    3 Well Positioned For Upcoming TLAC Requirements Based on Final U.S. TLAC Rule Released on December 15, 2016(1)(2)(3) 1Q17 Outstanding Debt & Capital Instruments (%) External TLAC & Long-Term Debt ($Bn) Subsidiary Debt 213 Parent Structured Debt (15) 198 7% Common 5% Equity Tier 1 25% (76) 122 ~88%

  13. Slide 13: Strong Risk-Based and Strengthening Leverage Ratios

    Strong Risk-Based and Strengthening Leverage Ratios 1Q17 Pro Forma Fully Phased-In Common Equity Tier 1 Ratio vs. ​Pro Forma Fully Phased-In U.S. Peers (%)(1) Supplementary Leverage Ratio (%)(1) 16.6% 6.4% 14.1% 6.2% 12.8% 12.5% 12.5% 12.4% 5.8% 11.9% 11.7% 11.0% 4.7% MS UBS C GS BARC JPM DB CS BAC

  14. Slide 14: Significant Global Liquidity Position

    4 Significant Global Liquidity Position Period End Global Liquidity Reserve (“GLR”) ($Bn) 1Q17 GLR Composition 202 203 202 198 Other investment Deposits 193 182 182 grade securities with banks Deposits with Non-U.S. central banks 79 sovereign 3% 5% 89 94 75 obligations 9% 63 71 88 14% 26% 119 111 11

  15. Slide 15: Appendix

    Morgan Stanley Appendix

  16. Slide 16: Maturity Profile of Unsecured Borrowings

    Maturity Profile of Unsecured Borrowings Total Short-Term and Long-Term Maturities(1)(2) ($Bn) $30 $23 $22 1Q17 Weighted Average $20 $20 Maturity(3): 6.4 years $20 $20 $17 $12 $12 $10 $9 $9 $9 $8 $7 $6 $4 $0 1. As of March 31, 2017. 2. Total short-term and long-term maturities include Plain Vanilla

  17. Slide 17: High Quality Liquid Assets (HQLA)

    High Quality Liquid Assets (“HQLA”) Pro Forma High Quality Liquidity Assets ($Bn)(1) 184 184 7 30 73 147 111 1Q17 Bank Level 2B Assets Non-bank Level 2A Assets Level 1 Assets 1. Pro forma High Quality Liquid Assets is based on the current interpretation of the final Federal Reserve Bank LCR rule pub

  18. Slide 18: Morgan Stanley

    ​Morgan Stanley 1Q17 Fixed Income Investor Update May 5, 2017

Morgan Stanley — Debt Investor Presentation (May 2017) on 6ix