Morgan Stanley's 2024 Q4: Contradictions in Trading Durability, Wealth Management Growth, and Regulatory Impacts on NII

Record Financial Performance:
- Morgan Stanley reported revenues of $16.2 billion for Q4 2024, marking the highest in over 15 years.
- For the full year 2024, the Firm delivered a return on tangible equity of 19% and earnings per share of $7.95.
- This strong performance was driven by a consistent execution of strategies across its businesses despite macroeconomic and geopolitical uncertainties.

Institutional Securities Growth:
- The Institutional Securities segment achieved $7.3 billion in Q4 revenues and an operating margin of 31%.
- Full-year revenues were $28.1 billion, the highest reported equity revenues.
- Growth was attributed to a global footprint, investment in talent and leadership, and efficient RWA growth, supported by strong trading performance, lending revenues, and corporate and sponsor relationships.

Wealth Management Expansion:
- Wealth Management reported record revenues of $28.4 billion for 2024, with a reported margin of 27.2%.
- Fee-based flows reached $123 billion, exceeding $100 billion for the fourth consecutive year.
- Expansion was driven by a differentiated client acquisition funnel and significant net new assets of $252 billion, reflecting strong client engagement and an increase in fee-based revenue.

Capital Management and Efficiency:
- Morgan Stanley accreted over $5.5 billion of CET1 capital in 2024, with a standardized CET1 ratio ending at 15.9%.
- The Firm's efficiency ratio was 71.1% for the year, with improved efficiency demonstrating disciplined prioritization of controllable spend.
- Investments in infrastructure and technology were supported by the roll-off of integration-related expenses, allowing for self-funding of growth opportunities.