Morgan Stanley Q3 2025 Earnings: Strong Growth Across All Segments

Morgan Stanley recently released its financial results for the third quarter of 2025, offering a detailed look into the health and performance of one of the world's leading financial institutions. The report reveals a period of significant growth, with strong results across all of its major business segments. Let's dive into the key numbers and what they tell us about the firm's recent performance.

A Strong Quarter Across the Board

For the third quarter ending September 30, 2025, Morgan Stanley reported impressive top- and bottom-line growth.

• Net Revenues: $18.2 billion, an 18% increase from $15.4 billion in the same quarter last year.
• Net Income: $4.6 billion, a substantial 45% jump from $3.2 billion in Q3 2024.
• Profitability: The firm delivered a strong Return on Equity (ROE) of 18.0% and a Return on Tangible Common Equity (ROTCE) of 23.5%, indicating highly efficient use of its capital base.

To better understand how Morgan Stanley generated its income this quarter, the following flow diagram illustrates the path from revenues to net income.

Deep Dive into the Business Segments

The firm's success this quarter was broad-based, with each of its three main divisions contributing positively.

Institutional Securities: A Resurgent Powerhouse

The Institutional Securities division, which includes investment banking and sales & trading, was a standout performer. It posted net revenues of $8.5 billion, up 25% year-over-year.

• Investment Banking was a major driver, with revenues surging by 44% to $2.1 billion. This was fueled by a significant uptick in advisory fees from completed M&A transactions and a strong rebound in both equity and fixed income underwriting. This suggests a more constructive market environment for deal-making and capital raising.
• Equity Sales & Trading also had a stellar quarter, with revenues climbing 35% to $4.1 billion, driven by robust client activity.
• Fixed Income Sales & Trading saw more modest growth, with revenues increasing by 8% to $2.2 billion.

Wealth Management: Steady Growth and Asset Accumulation

Morgan Stanley's Wealth Management arm continued its consistent growth trajectory, acting as a stable anchor for the firm.

• Net revenues reached $8.2 billion, a 13% increase from the prior year, primarily due to higher asset management fees and a 12% rise in net interest income.
• The division continues to attract and retain client assets, reporting net new assets of $81 billion for the quarter. Total client assets in the Wealth Management segment grew to an impressive $7.05 trillion.

Investment Management: Solid and Growing

The Investment Management segment also reported solid results, with net revenues of $1.7 billion, up 13% year-over-year. This growth was primarily driven by higher asset management fees, as the division's average assets under management (AUM) increased. Total AUM for this segment reached $1.81 trillion at the end of the quarter.

Capital and Stability

A key measure of a bank's resilience is its capital position. Morgan Stanley reported a Standardized Common Equity Tier 1 (CET1) capital ratio of 15.1%. This ratio, a core measure of a bank's ability to withstand financial stress, is comfortably above the regulatory requirement of 13.5%, signaling a robust capital buffer.

Final Thoughts

Morgan Stanley's third-quarter results paint a picture of a firm firing on all cylinders. The powerful rebound in its investment banking activities, combined with the steady, fee-driven growth from its massive Wealth and Investment Management businesses, demonstrates the strength of its diversified model. With a strong capital base and positive momentum across its key divisions, the firm appears well-positioned to navigate the opportunities and challenges of the global financial landscape.