Morgan Stanley · NYSE:MS
Morgan Stanley — Corporate Update (January 2013)
14 slides from Morgan Stanley's corporate update, Jan 18, 2013
Slide 1: Strategic Update
Strategic Update James P. Gorman, Chairman and Chief Executive Officer January 18, 2013
Slide 2: Notice
Notice This presentation may contain forward-looking statements. You are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date on which they are made, which reflect management’s current plans, estimates, projections, expectations or beliefs and which ar
Slide 3: Strategic Plan to Drive Higher Returns
Strategic Plan to Drive Higher Returns Acquire 100% of Wealth Management joint venture Achieve Global Wealth Management Group margin goals through expense management; exceed through revenue growth Significantly reduce RWAs in Fixed Income and Commodities Drive expenses lower in 2013, 2014, and beyon
Slide 4: Acquire 100% of the Wealth Management Joint Venture in 2013
Acquire 100% of the Wealth Management Joint Venture in 2013 Acquisition of final 35% stake of wealth management JV in 2013, subject to regulatory approval Incremental Benefits of 100% Ownership Year 1 incremental earnings comparable to capital required to acquire remaining 35%, driven by NCI capture
Slide 5: Achieve GWMG Margin Goals through Expense Management; Exceed through Revenue Growth
Achieve GWMG Margin Goals through Expense Management; Exceed through Revenue Growth Consistent improvement in wealth management margin through expense management Margin upside with revenue growth GWMG Revenues ($Bn) GWMG Pre-Tax Margin Pre-MSSB Transaction JV Integration Period Post-Integration Reve
Slide 6: We Will Continue to Reduce Our Fixed Income RWAs
We Will Continue to Reduce Our Fixed Income RWAs Ahead of targets laid out in 3Q12 2016 figures represent expected “end-state” risk-weighted assets (RWAs) Can achieve RWA reduction without impairing revenue or client franchise Fixed Income and Commodities Basel III Risk-Weighted Assets Previous Guid
Slide 7: We Will Continue to Reduce Our Fixed Income RWAs
We Will Continue to Reduce Our Fixed Income RWAs Ahead of targets laid out in 3Q12 2016 figures represent near “end-state” risk-weighted assets (RWAs) Can achieve RWA reduction without impairing revenue or client franchise Fixed Income and Commodities Basel III Risk-Weighted Assets Includes 4Q11 MBI
Slide 8: Driving Cost Reductions: Expenses to Decline ~$1.6Bn with Flat Revenue
Driving Cost Reductions: Expenses to Decline ~$1.6Bn with Flat Revenue on Top of 2012 Reductions of $500MM Expenses declined $500MM in 2012, reflecting cost reductions, partially offset by investments Assuming flat revenue environment, expenses could decline by ~$1.6Bn between 2012 and 2014 Expense
Slide 9: Driving Cost Reductions: Improvements & Restructuring in 2013
Driving Cost Reductions: Improvements & Restructuring in 2013 Below actions are reflected in the net savings of ~$1.6Bn between 2012 and 2014 Cost Improvements and Restructuring: 2013 Announced January 2013 headcount reduction of ~1,700 Reducing and re-sizing Institutional Securities geographic foot
Slide 10: Grow Earnings Through Firm-Specific Opportunities: Deeper ISG and GWMG Partnership
Grow Earnings Through Firm-Specific Opportunities: Deeper ISG and GWMG Partnership Opportunities for earnings growth from collaboration between ISG and GWMG, in addition to benefits from owning 100% of wealth management JV ISG and GWMG management formalized a joint effort in September 2012 to deepen
Slide 11: Grow Earnings Through Firm-Specific Opportunities: Bank Strategy
Grow Earnings Through Firm-Specific Opportunities: Bank Strategy Firmwide deposits of $83Bn at 2012 year-end would increase to $142Bn pro-forma with 100% ownership of wealth management JV Pro-forma deposit base represents significant opportunity in both GWMG and ISG to drive growth Global Wealth Man
Slide 12: What Does This Add Up To?
What Does This Add Up To? Return on Average Common Equity (ROE) excl. DVA ~9% Assumptions No change in market conditions CVA adjustment Actions WM JV buy-in Expense initiatives RWA reductions Growth initiatives ~10% Actions Return excess capital >10% Assumptions Improved operating environment Return
Slide 13: End Notes
End Notes These notes refer to the financial metrics presented on Slide 12. (1) Based on current expectations; changes in litigation results or regulation could materially impact expenses. Expense reductions reflect Office of Re-engineering, ISG and GWMG expense initiatives, and headcount management
Slide 14: Strategic Update
Strategic Update James P. Gorman, Chairman and Chief Executive Officer January 18, 2013