BTCC / BTCC Square / coincentral /
Morgan Stanley (MS) Crushes Q2 Earnings—So Why Is Wall Street Side-Eyeing Their Investment Banking Slump?

Morgan Stanley (MS) Crushes Q2 Earnings—So Why Is Wall Street Side-Eyeing Their Investment Banking Slump?

Published:
2025-07-16 22:48:46
16
3

Morgan Stanley just flexed a Q2 earnings beat—but the champagne’s on ice. Wall Street’s too busy squinting at their sluggish investment banking arm.


The Good, The Bad, and The Bureaucratic

Trading desks carried the quarter while bankers napped. Classic 2025: markets roar, but IPOs? Crickets.


The Elephant in the Boardroom

Fee droughts aren’t just a ‘macro environment’ problem—they’re a ‘why aren’t we adapting?’ problem. Spoiler: no one at MS owns a crypto wallet.


Bottom Line

Another quarter proving banks would rather blame the Fed than innovate. Meanwhile, DeFi eats their lunch—with 24/7 markets and zero golf-course schmoozing required.

TLDR

  • Morgan Stanley Beats Q2 Estimates but Banking Woes Drag Shares Lower
  • MS Q2 Profit Soars on Trading, Wealth Gains; Banking Weakness Weighs
  • Strong Wealth Growth Lifts MS, But Investment Banking Disappoints
  • Morgan Stanley Rides Trading Wave, Yet Bank Fees Sink Stock Price
  • MS Grows Assets to $8.2T, But Wall Street Eyes Banking Headwinds

Morgan Stanley (MS) shares fell early on July 16 despite beating Q2 earnings estimates and posting solid revenue growth. The stock opened around $141.59, dropped to $136, then recovered slightly to close at $139.79, down 1.27%. After hours, MS slid further to $139.40 as the market reacted to weak investment banking results.

Morgan Stanley (MS)

Q2 Earnings Beat but Banking Business Lags

Morgan Stanley reported earnings of $2.13 per share for Q2 2025, surpassing the consensus estimate of $1.93. Net income ROSE 15% to $3.39 billion, boosted by strong trading and wealth management performance. However, total investment banking fees declined 5% year-over-year to $1.54 billion.

Lower advisory fees and a drop in non-investment grade underwriting impacted revenue in the institutional securities segment. Equity underwriting rose 42%, but it could not offset weakness in other areas. Overall, pre-tax income for institutional securities reached $2.11 billion.

MS reported $7.64 billion in net revenues for the segment, up 9% from last year, driven by higher equity trading revenues. Fixed income trading income increased 9% to $2.18 billion, exceeding expectations. However, lower merger activity and debt issuance raised concerns about investment banking momentum.

Wealth and Investment Management Drive Growth

Wealth management revenue grew 14% to $7.76 billion, surpassing the $7.11 billion projection, and pre-tax income rose 21% to $2.2 billion. Total client assets reached $6.49 trillion, an increase of 14% from the previous year, reflecting continued asset inflows. Net interest income climbed 14% to $2.34 billion as lending activity expanded.

The investment management division delivered strong results, with revenue increasing 12% to $1.55 billion and pre-tax income up 45% to $323 million. Total assets under management reached $1.71 trillion, up from $1.51 trillion a year earlier. Morgan Stanley achieved revenue gains through higher fees and better performance-based income.

Combined client assets across wealth and investment management rose to $8.2 trillion, nearing the long-term goal of $10 trillion. MS emphasized fee-based income and asset gathering to drive consistent top-line growth. Strategic acquisitions and product expansion supported continued strength in non-trading segments.

Capital Position Solid Amid Expense Pressures

MS maintained a strong capital base, with a Tier 1 capital ratio of 17.6% and a CET1 ratio of 15% at quarter-end. Book value per share stood at $61.59, up from $56.80 last year, while tangible book value increased to $47.25. The bank repurchased 8 million shares for $1 billion and raised its quarterly dividend to $1.00.

Total non-interest expenses rose 10% to $11.97 billion, higher than estimated, mainly due to business expansion and compensation. Credit loss provisions jumped to $196 million from $76 million a year ago, signaling growing risk exposure. Nevertheless, MS cleared the 2025 stress test and reauthorized a $20 billion share buyback program.

CEO Ted Pick highlighted improved market activity but acknowledged slower investment banking recovery compared to peers like JPMorgan and Goldman Sachs. CFO Sharon Yeshaya noted active M&A discussions and Optimism about the improvement of capital markets. MS also explores new technologies, including stablecoins, to enhance future client services.

MS continues to pivot towards more predictable revenue sources while managing pressures from volatile markets and higher costs. The Q2 performance signals growth in Core businesses, but Wall Street remains alert to headwinds in investment banking.




|Square

Get the BTCC app to start your crypto journey

Get started today Scan to join our 100M+ users