Morgan Stanley (MS) delivered a standout first quarter for 2025, reporting record-breaking financial results that highlight broad-based strength across all business segments. Total net revenues surged to $17.7 billion, a 17% year-over-year increase, while net income climbed 26% to $4.3 billion. Earnings per share rose even more sharply to $2.60, marking a 29% jump from the prior year. The firm also posted an impressive return on equity of 17.4% and a return on tangible common equity of 23.0%, underscoring the strong profitability momentum.

The quarter reflected heightened operating efficiency as well, with an expense efficiency ratio of 68%, improved from 71% a year ago, and a pre-tax margin of 31%, up two percentage points. Notably, Morgan Stanley accreted $1.9 billion in CET1 capital, ending the quarter with a solid CET1 ratio of 15.3%, while also returning capital to shareholders through $1 billion in share repurchases and $158 million in preferred dividends.

Performance across business lines was notably strong. The Institutional Securities division led the way with $9.0 billion in revenues, up 28% year-over-year, driven by record equity revenues of $4.1 billion (a 45% increase), strong fixed income trading, and robust investment banking. The segment delivered a 37% pre-tax margin and a 20% ROE, both higher than the previous year. The unit also reported $91 million in credit loss provisions, reflecting portfolio growth and a cautious economic outlook.

Wealth Management generated $7.3 billion in revenues, up 6%, with a solid 20% ROE. While the pre-tax margin dipped to 26.6% due to deferred compensation plan impacts and severance costs, the division attracted $94 billion in net new assets, including $30 billion in fee-based flows, bringing total client assets to $6 trillion. Lending balances rose to $163 billion, and net interest income edged up to $1.9 billion.

Investment Management also delivered a strong quarter, with $1.6 billion in revenues, up 16%, and a pre-tax margin of 20%. ROE rose to 10%, and AUM reached $1.6 trillion, supported by $5.4 billion in long-term net inflows.

Geographically, the firm saw strong global momentum, with net revenues up 13% in the Americas, 25% in EMEA, and an impressive 35% in Asia, the latter fueled by robust equities performance.

CEO Ted Pick praised the firm’s "record quarter" and ongoing ability to generate 20%+ ROTCE despite market uncertainty, pointing to strong capital generation, client engagement, and the firm’s resilience. Management noted that the current performance comes even without a full rebound in M&A and IPO activity—signaling potential upside as markets normalize.

Overall, Morgan Stanley’s Q1 2025 results reflect exceptional operational execution, sustained profitability, and a strong capital foundation, positioning the firm to navigate ongoing macroeconomic challenges while continuing to deliver for clients and shareholders.