Morgan Stanley's Q1 2025: Unpacking Contradictions in M&A Strength, Equities Trading, and Market Volatility

These are the key contradictions discussed in Morgan Stanley's latest 2025Q1 earnings call, specifically including: M&A Strength and Stability, Equities Trading Strength, and Market Volatility Impact on Trading and Wealth Management:



Strong Financial Performance:
- Morgan Stanley reported $17.7 billion in revenue for Q1 2025, with Earnings per Share of $2.60 and a ROTCE of 23%.
- The growth was driven by strong performance across institutional securities, particularly in equities, which had a record $4 billion quarter.

Equities and Prime Brokerage Growth:
- Equities revenues reached a record $4.1 billion, increasing by 45% year-on-year.
- The growth was supported by strong client engagement and increased activity across regions, driven by shifts in market themes and technological investments.

Wealth Management Expansion:
- Morgan Stanley's Wealth Management reported $94 billion in net new assets, with a 6% annualized growth rate.
- This expansion was driven by strong retail client engagement, fee-based flows, and transactions, indicating the demand for advice amidst market volatility.

Investment Banking Activity:
- Investment banking revenues were $1.6 billion for the quarter, reflecting higher completed deals across regions.
- Despite market uncertainties, financial sponsors continued to engage, leading to a steady recovery in investment banking activity.