Morgan Stanley outlines path to $10T-plus client assets and sustained 20%+ ROTCE through market cycles

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• 2025 was an exceptional year for Morgan Stanley marked by deliberate execution of strategy

  80% confidence

• No philosophical frame shift on targets; firm now has confidence to discuss performance in more challenging environments with ability to still generate 17.5% ROTCE with earnings below $8

  80% confidence

• If environment is welcoming, firm expects to execute at or above firmwide goals as in 2025; when backdrop is more challenged, aim to achieve higher lows

  80% confidence

• Looking ahead to Q1 2026, NII expected to remain roughly flat quarter-over-quarter as higher average sweeps and lending balances offset the full impact of two rate cuts in Q4

  80% confidence

• Morgan Stanley gained 100 basis points of wallet share in Institutional Securities

  80% confidence

• Firm is focused on compounding earnings through the cycle rather than overreaching

  80% confidence

• In 2025, the U.S. economy proved resilient with well-capitalized corporates and higher-end consumers driving the economy forward

  80% confidence

• Wealth Management margin expansion driven by building out fee-based revenues and fee-based assets, plus efficiency through technology

  80% confidence

• Equitization of markets around the world is underway; institutional trading wallet could continue to grow 5-10% per annum

  80% confidence

• Growth plans embed the increasing adoption of AI tools throughout the enterprise and inside client base

  80% confidence

• This is not the time to overreach, emphasizing disciplined approach to capital deployment and M&A

  80% confidence

• 2026 starts with the tailwinds of constructive fiscal policy and easier monetary policy

  80% confidence

• For remainder of 2026, assuming current forward curve, incremental loan growth and deposit mix projections, NII expected to continue to trend higher

  80% confidence

• If there are lower asset prices due to drawdown, economic blip, or geopolitical event, there could be lower levels of performance

  80% confidence

• Targets will be revisited later in the year; if clearly passed through, they will consider taking them higher

  80% confidence

• Morgan Stanley is monetizing capital markets green shoots across investment banking and markets verticals, and scaling asset inflows and transaction activity across wealth businesses

  80% confidence