Morgan Stanley · NYSE:MS
Morgan Stanley — Investor Presentation (January 2021)
28 slides from Morgan Stanley's investor presentation, Jan 20, 2021
Slide 1: Morgan Stanley at an Inflection Point: The Next Decade of Growth
Morgan Stanley at an Inflection Point:The Next Decade of Growth James P. Gorman, Chairman and Chief Executive Officer January 20, 2021
Slide 2: Notice
Notice 2 This presentation by Morgan Stanley is copyrighted and proprietary, and all rights are reserved. Any recording, rebroadcast or other use of this presentation, in whole or in part, without the prior written consent of Morgan Stanley is strictly prohibited. The presentation has been prepared
Slide 3: 2020: Our Business Model Performed and Delivered Record Results
3 Firm Net Revenues Efficiency Ratio (3) Net Income ROTCE (4) EPS (5) Common Equity Tier 1 Ratio (6) 2015 – 2019 Year Ended December 31, 2019 $41Bn 73% $9.0Bn 13.4% $5.19 16.4% 2010 – 2014 Adjusted Year Ended December 31, 2014 (1) $34Bn 79% $4.5Bn 7.5% $2.13 10.9% The End Notes are an integral part
Slide 4: Opportunistic Acquisitions Accelerate Growth
4 (2019) Enhance Workplace Offering (2020) Service FullSpectrum of Wealth (Expected to close2Q 2021) Create Leading Asset Manager Opportunistic Acquisitions Accelerate Growth The End Notes are an integral part of this Presentation. See slides 19-26 at the back of this presentation for information re
Slide 5: Key Drivers of Growth
Key Drivers of Growth 5 Realize Acquisition Synergies 3 Expand Client Base and Deepen Relationships 2 Return Excess Capital 5 Demonstrate Operating Leverage 4 Gain Market Share 1 The End Notes are an integral part of this Presentation. See slides 19-26 at the back of this presentation for informatio
Slide 6: Three Connected World-Class Businesses of Scale
Three Connected World-Class Businesses of Scale… 6 Pre-Tax Margin (%) (1) Clients Assets ($Tn) Assets Under Management ($Tn) (2)(3) Institutional Securities Wealth Management Investment Management $26Bn 2020 Net Revenues $19Bn 2020 Net Revenues $4Bn 2020 Net Revenues (4) 1 The End Notes are an integ
Slide 7: ...Continue to Gain Share
…Continue to Gain Share 7 1 Increase Share of Profits Across Competitors in WM Revenue Capture Across ISG Industry LeadingOrganic Growth in IM Morgan Stanley ISG Wallet Share (%) (1)(2)(3) Long-Term Net Flows (%) (5)(6)(2017 – 3Q 2020) Pre-Tax Profit Wallet Share (%) (4) The End Notes are an integra
Slide 8: Institutional Securities: Increased Revenues and Profitability with Consistent Risk Management
Annual Avg. Trading VaR (1)($MM) Institutional Securities: Increased Revenues and Profitability with Consistent Risk Management 8 2 Revenue Growth and Margin Expansion Disciplined Risk Management Pre-Tax Margin (3) 20% 29% 30% 35% ISG Net Revenues (2)($Bn) Average VaR Over the Period AverageAnnual V
Slide 9: Wealth Management: Leadership Position in All Wealth Channels Drives New Asset and Client Acquisition
Advisor-Led (1)(2) Workplace (1)(3) Self-Directed (1)(4) Top 2 Top 3 #1 9 15%+ Proceeds Retention Opportunity $15Bn+ Assets Historically Lost to Channels with Advice Capabilities Annually $77Bn Fee-Based AssetFlows in 2020 4.9MM Number of Participants 6.7MM Households ~2.5MM Households Further Oppor
Slide 10: Wealth Management: E*TRADE Benefited from Dramatically Accelerated Digital Adoption
10 2 Stock Plan Proceeds Retention (5) DARTs (2) Net New Assets (3) On/Off BalanceSheet Deposits (4) Prior Record (1) 19%(2016) 291K(2019) $17Bn(2018) $56Bn(2019) 2020 28% 952K $44Bn $79Bn Wealth Management: E*TRADE Benefited from Dramatically Accelerated Digital Adoption E*TRADE The End Notes are a
Slide 11: Wealth Management: Growth in Net New Assets Underscores Strong Client Engagement
Wealth Management: Growth in Net New Assets Underscores Strong Client Engagement 11 2 Net New Assets Evolution ~2% Net New Assets (1)($Bn) Average Net New Assets as % of Beginning Client Assets (2) % 8% 6% ~3 – 4% 6% The End Notes are an integral part of this Presentation. See slides 19-26 at the ba
Slide 12: Wealth Management: Stable and High Quality Revenues
Wealth Management: Stable and High Quality Revenues 12 2 Daily Revenues (1) 2020 2014 2016 2018 <$60MM 68% $60MM - $70MM 30% >$70MM 2% 8% 52% 8% 27% 46% 59% 65% 2% 33% 65% of Daily Revenues $70MM+ The End Notes are an integral part of this Presentation. See slides 19-26 at the back of this presentat
Slide 13: Investment Management: Premier Global Asset Manager Delivers Value to Clients
Investment Management: Premier Global Asset Manager Delivers Value to Clients 13 2 $1.4Tn Pro Forma AUM (1)(2) Private and Public Alpha Solutions Fixed Income & Liquidity ~65% ~35% MSIMGross Sales (3) ~95% ~5% EatonVanceGross Sales (3) North America International Leadership in Customization, Sustain
Slide 14: Unmatched Reach of Wealth and Investment Management Creates Growth and High Returns
Unmatched Reach of Wealth and Investment Management Creates Growth and High Returns 14 3 Top 5 Franchise Providing Leading Advice to our Clients $5Tn+ of Client Assets Wealth Management and Investment Management Client Assets ($Tn) (1) Wealth and Investment Management Revenues Over Client Assets (bp
Slide 15: Realize Acquisition Synergies from E*TRADE and Eaton Vance
15 Realize Acquisition Synergies from E*TRADE and Eaton Vance 3 Funding Synergies (2) Cost Synergies (1) $150MM from E*TRADEat announcementIncreased to $250MM $400MM from E*TRADE$150MM from Eaton Vance$550MM in Total Cost Synergies Cost and Funding Synergies Revenue Opportunities E*TRADE Eaton Vance
Slide 16: Demonstrate Operating Leverage and Increase Profitability
Demonstrate Operating Leverage and Increase Profitability 16 4 Firm Expense Efficiency Ratio (%) (1) Pre-Tax Profit ($Bn) (2) Enhances Profit Expansion Improvement in Efficiency Ratio Integration-Related Expenses The End Notes are an integral part of this Presentation. See slides 19-26 at the back o
Slide 17: Well-Positioned to Return Excess Capital
Well-Positioned to Return Excess Capital ROTCE (%) (1) 17 5 Despite Excess Capital Delivered Robust Returns Common Equity Tier 1 Ratio (2) CET1 Requirement with SCB: 13.2% The End Notes are an integral part of this Presentation. See slides 19-26 at the back of this presentation for information relat
Slide 18: Execute on the Next Phase of Shareholder Value
Execute on the Next Phase of Shareholder Value 2-Year Objectives (1) 18 WM Pre-Tax Margin (2) Firm Efficiency Ratio (3) ROTCE (4) Longer-Term Aspirations (1) 26 – 30% 69 – 72% 14 ‒ 16% 30%+ <70% 17%+ The End Notes are an integral part of this Presentation. See slides 19-26 at the back of this presen
Slide 19: End Notes
End Notes 19 The Firm’s financial presentations, earnings releases, earnings conference calls, and other communications may include certain metrics, including non-GAAP financial measures, which we believe to be useful to us, investors, analysts and other stakeholders by providing further transparenc
Slide 20: End Notes
These notes refer to the financial metrics and/or defined term presented on Slide 31. 2014 Adjusted Operating Performance Metrics: Net revenues adjustment to exclude the positive impact of DVA. DVA represents the change in fair value resulting from fluctuations in our debt credit spreads and other c
Slide 21: End Notes
End Notes 21 These notes refer to the financial metrics and/or defined term presented on Slide 3The comparisons of current and prior periods are impacted by the financial results of E*TRADE reported in the Wealth Management Segment. The Firm's fourth quarter earnings results reflect the completed ac
Slide 22: End Notes
End Notes 22 These notes refer to the financial metrics and/or defined term presented on Slide 7Long-Term Net Flows represents cumulative long-term net flows over 15 quarters from calendar 1Q 2017 to 3Q 2020 as a percentage of beginning Assets Under Management for 2017 (as of calendar 4Q 2016) for M
Slide 23: End Notes
End Notes 23 These notes refer to the financial metrics and/or defined term presented on Slide 9 Individual households or participants that are engaged in one or more of our Wealth Management channels (Advisor-Led, Self-Directed, Workplace) will be included in each of the respective channel counts.
Slide 24: End Notes
End Notes 24 These notes refer to the financial metrics and/or defined term presented on Slide 11 Net New Assets represents client inflows (including dividend and interest) less client outflows (excluding activity from business combinations/divestitures and impact of fees and commissions). Average N
Slide 25: End Notes
End Notes 25 These notes refer to the financial metrics and/or defined term presented on Slide 14 Wealth Management and Investment Management Client Assets represents Wealth Management client assets and Investment Management assets under management based on the 2014 Form 10-K and the Morgan Stanley
Slide 26: End Notes
End Notes 26 These notes refer to the financial metrics and/or defined term presented on Slide 17The calculation of ROTCE for each year utilizes net income applicable to Morgan Stanley less preferred dividends as a percentage of average tangible common equity, respectively. Average tangible common e
Slide 27: Notice: Important Information about the Proposed Transaction with Eaton Vance
Notice 27 Important Information about the Proposed Transaction with Eaton Vance and Where to Find ItIn connection with the proposed transaction between Morgan Stanley and Eaton Vance Corp. (“Eaton Vance”), Morgan Stanley and Eaton Vance will file relevant materials with the Securities and Exchange C
Slide 28: Notice: Forward-Looking Statements
Notice 28 Forward-Looking StatementsThis presentation contains “forward-looking statements” within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In this context, forward