Finance II Limited – Interim Report – 30 June 2026

Registered office:

47 Esplanade St. Helier JE1 0BD

Jersey

MORGAN STANLEY FINANCE II LTD

Report and Interim Financial Statements 30 June 2026

Interim Directors' report 1

Interim Directors' responsibility statement 7

Independent review report 8

Condensed statement of comprehensive income 10

Condensed statement of changes in equity 11

Condensed statement of financial position 12

Condensed statement of cash flows 13

Notes to the condensed interim financial statements 14-31

‌The Directors present their interim report and condensed interim financial statements (which comprise the condensed statement of comprehensive income, the condensed statement of changes in equity, the condensed statement of financial position, the condensed statement of cash flows, and the related notes, 1 to 12) for Morgan Stanley Finance II Ltd (the "Company") for the period ended 30 June 2026.

The profit for the period, after tax was $182,000 (period ended June 2025: $544,000). During the period, no dividends were paid or proposed (year ended December 2025: $nil).

The principal activity of the Company is the issuance of financial instruments and the hedging of the obligations arising pursuant to such issuances.

The Company's ultimate parent undertaking and controlling entity is Morgan Stanley, which, together with the Company and Morgan Stanley's other subsidiary undertakings, form the "Morgan Stanley Group".

There have not been any significant changes in the Company's principal activity in the period under review and no significant change in the Company's principal activity is expected.

Exposure to risk factors and the current business environment in which it operates may impact business results of the Company's operations.

Risk taking is an inherent part of the Company's business activities. The Company seeks to identify, assess, monitor and manage each of the various types of risk involved in its business activities, in accordance with defined policies and procedures.

The Morgan Stanley Group Risk Appetite Statement articulates the aggregate level and type of risk that the Group is willing to accept in order to execute its business strategy and protect its capital and liquidity resources.

The Morgan Stanley Group has an established Risk Management Framework to support the identification, monitoring and management of risk.

A description of the material risks and how these risks are managed is outlined in the 'Risk Management' section.

The economic environment exhibited strength in the first half of 2026, characterised by active equity markets supported by the adoption of AI and improved investor sentiment. Geopolitical risk, inflation, rising asset prices, the rate of economic growth, and the future path of monetary policy represent ongoing uncertainties which could continue to impact the capital markets and the Company. The Company's performance in this environment is discussed further in 'Overview of the Period to June 2026'. The Morgan Stanley Group management continues to monitor the developments in the Middle East and their impact on the regional economy, global economic conditions and financial markets. The Company's direct exposure remains limited.

The issued structured notes expose the Company to the risk of changes in market prices of the underlying securities, interest rate risk and, where denominated in currencies other than US dollar, the risk of changes in exchange rates between the US dollar and the other relevant currencies. The Company enters into derivative transactions with Morgan Stanley to hedge the market price, interest rate and foreign currency risks associated with the issuance of the structured notes.

The condensed statement of comprehensive income is set out on page 10. The profit for the period is $182,000, which primarily represents net interest income from intercompany funding (period ended June 2025: $544,000). The decrease in profit during the period is driven by decrease in the average funding balance. Net trading income and the net expense on other financial instruments held at fair value through profit and loss for the period is $nil (period ended June 2025: $nil) which is consistent with the Company's principal activity.

The condensed statement of financial position is set out on page 12. Total assets as at 30 June 2026 were

$1,972,400,000 (2025: $976,730,000). The increase in total assets is due to increase in proceeds of structured notes lent to Morgan Stanley, classified as Loans and advances. Total liabilities as at 30 June 2026 were

$1,959,513,000 (2025: $964,025,000). The increase in total liabilities is due to increase in the net issuance of structured notes, classified as Debt and other borrowings.

The performance of the Company is included in the results of the Morgan Stanley Group. The Company's Directors believe that providing further performance indicators for the Company itself would not enhance an understanding of the development, performance or position of the business of the Company.

The risk management section below sets out the Company's and the Morgan Stanley Group's policies for the management of liquidity and cash flow risk and other significant business risks.

Risk is an inherent part of the Company's business activity and effective risk management is vital to the success of the Company. The Company is managed as part of the policies and procedures of the Morgan Stanley Group's risk management policy framework. The risk management policy framework includes escalation to the appropriate senior management personnel when necessary.

Note 17 to the 2025 annual financial statements provides more detailed qualitative disclosures on the Company's exposure to financial risks. Note 9 to the condensed financial statements provides more detailed quantitative disclosures.

Set out below is an overview of the Morgan Stanley Groups's policies for the management of financial risk and other significant business risk.

Market risk

Market risk refers to the risk that a change in the level of one or more market prices, rates, spreads, indices, implied volatilities, correlations or other market factors, such as market liquidity, will result in losses for a position or portfolio.

Market risk (continued)

The Company's market risk associated with its trading activities at a legal entity, trading division and at an individual product level is managed as part of the Morgan Stanley Group's market risk management policy framework.

The Morgan Stanley Group's market risk management policy framework ensures transparency of material market risks, monitors compliance with established limits, and escalates risk concentrations to appropriate senior management when necessary.

It is the policy and objective of the Company not to be exposed to net market risk.

Credit risk

Credit risk refers to the risk of loss arising when a borrower, counterparty or issuer does not meet its financial obligations to the Company.

The Morgan Stanley Group's credit risk management policies and procedures, of which the Company is a part, includes escalation to the appropriate senior management personnel when necessary.

Credit risk exposure is managed on a global basis and in consideration of each significant legal entity within the Morgan Stanley Group. The credit risk management policies and procedures establish the framework for identifying, measuring, monitoring and controlling of credit risk whilst ensuring transparency of material credit risks and compliance with established limits and escalating risk concentrations to appropriate senior management.

Additional information on the primary credit exposures, credit risk management and mitigation, exposure to credit risk, including the maximum exposure to credit risk by credit rating is presented in note 9.

Country risk exposure

Country risk is the risk that events in, or affecting, a foreign country might adversely affect the Company. "Foreign country" means any country other than Jersey.

Sovereign risk, by contrast, is the risk that a government will be unwilling or unable to meet its debt obligations or will renege on the debt that it guarantees. Sovereign risk is single-name risk for a sovereign government, its agencies and guaranteed entities.

The Company enters into the majority of its financial asset transactions with the parent entity, Morgan Stanley, in the United States of America ("USA"). As a result of the implicit support that would be provided by Morgan Stanley, the Company's country risk is considered a component of the Morgan Stanley Group's credit risk.

For further information on how the Company identifies, monitors and manages country risk exposure refer to page 3 of the Directors' report of the Company's 2025 annual financial statements.