Morgan Stanley · NYSE:MS
Morgan Stanley — Debt Investor Presentation (August 2016)
20 slides from Morgan Stanley's debt investor presentation, Aug 30, 2016
Slide 1: 2Q16 Fixed Income Investor Update
Morgan Stanley 2Q16 Fixed Income Investor Update August 30, 2016
Slide 2: Notice
Notice The information provided herein may include certain non-GAAP financial measures. The reconciliation of such measures to the comparable GAAP figures are included in the Company’s Annual Report on Form 10-K, Definitive Proxy Statement, Quarterly Reports on Form 10-Q and the Company’s Current Re
Slide 3: Agenda
Agenda Business Update Section 1 Liability Management Section 2 Capital Management Section 3 Liquidity Management Section 4 MORGAN STANLEY 2Q16 FIXED INCOME INVESTOR UPDATE | AUGUST 30, 2016 3
Slide 4: Business Summary Update
1 Business Summary Update 1H 2016 Second Quarter Objectives Results Net Revenues $16.7Bn (1) • Executed on strategic plan • Performed well in areas of traditional Equity Sales & Trading Manage uncertain environment strength • Continued stability and progress in core Investment businesses Banking Fix
Slide 5: Project Streamline: Improving Firm Infrastructure
Project Streamline: Improving Firm Infrastructure 2017 Expense Reduction Target Driven by Three Core Levers 1 Support • Workforce Optimization Services Efficiencies • Technology Infrastructure 2 2017 Expense • Reduction in Workforce (2015) Compensation Savings Discipline Target: • New Compensation T
Slide 6: Project Streamline: Support Services Efficiencies
Project Streamline: 1 Support Services Efficiencies(1) Near-Term Initiatives on Track with Further Structural Initiatives Under Review Workforce Optimization Technology Infrastructure Deploy additional ~1,250 support staff roles out of high cost locations (~$100MM savings) Reduce physical servers fr
Slide 7: Liability Management: Centralized Structure and Strong Governance
2 Liability Management: Centralized Structure and Strong Governance • Liability management framework supported by strong, centralized governance, ensuring funding durability and providing stability in all environments % OF FUNDING PRIMARY SOURCES OF FUNDING SINCE 3Q13 Weighted average maturity of ~6
Slide 8: Unsecured Borrowings: Key Source of Funding
Unsecured Borrowings: Key Source of Funding • In 2015, we issued ~$34Bn of unsecured debt, which includes: – ~$32Bn of senior unsecured debt – ~$2Bn of subordinated debt • Exceeded 1H16 maturities and redemptions with ~$20Bn of unsecured debt issuance across tenors, currencies, and channels – Contin
Slide 9: Deposits Have Grown Steadily Due to Transfers from Former JV Partner and Organic Growth
Deposits Have Grown Steadily Due to Transfers from Former JV Partner and Organic Growth Morgan Stanley’s Bank Deposit Program (BDP) Balances (1) ($Bn) 180 ~$150 150 ~$132 120 90 ~$70 60 ~$54 30 0 (2) 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15
Slide 10: Deposit Strategy Supported By Three Core Principles
Deposit Strategy Supported By Three Core Principles • Key near-term focus is to optimize existing deposit levels to support loan growth • Durability • Component of full-service wealth manager 1 Strategic Value • Liquidity Coverage Core Principles Ratio (LCR) Value • Contingent Funding Plan to Evalua
Slide 11: Four Pillars of Secured Funding Ensure Durability and Stability
Four Pillars of Secured Funding Ensure Durability and Stability 1 Significant Weighted Average Maturity • Enhances durability 2 Maturity Limit Structure • Reduces roll-over risk 3 Investor Limit Structure • Minimizes concentration with any single investor, in aggregate and in any given month 4 Spare
Slide 12: Underlying Principles of the Four Pillars of Secured Funding
Underlying Principles of the Four Pillars of Secured Funding 1 SIGNIFICANT WEIGHTED AVERAGE MATURITY (WAM) 2 MATURITY LIMIT STRUCTURE • Criteria-based model sources appropriate term • Less than 15% of non-Super Green(2) liabilities funding consistent with liquidity profile of underlying maturing i
Slide 13: Strict Governance Framework Ensures Appropriate Term Consistent with Asset Fundability
Strict Governance Framework Ensures Appropriate Term Consistent with Asset Fundability • Rules-based criteria determine asset fundability • Highly Liquid (Governments, FUNDABILITY CRITERIA Agencies, Open Market • Eligible for financing through Open Market Operations (OMO) and/or Operations and Centr
Slide 14: Positioned For Upcoming TLAC Regulation
3 Positioned For Upcoming TLAC Regulation Based on Morgan Stanley’s Interpretation of U.S. NPR Released on October 30, 2015(1)(2)(3)(4) 2Q16 Outstanding Debt & Capital Instruments (%) External TLAC & Long-Term Debt ($Bn) Subsidiary TruPS (1%) Debt 184 Parent Structured Debt (14) 169 6% Common Parent
Slide 15: Common Equity Tier 1 and Supplementary Leverage Ratios Above Fully Phased-in Requirements
Common Equity Tier 1 and Supplementary Leverage Ratios Above Fully Phased-in Requirements(1) 2Q16 Pro Forma Fully Phased-In Common Pro Forma Fully Phased-In U.S. Supplementary Equity Tier 1 Ratio (%) (2) Leverage Ratio (%) (2) 15.7% 16.3% 6.1% 5.8% 10.0% 2018 Req: 5% BUFFERS: 4.7% • GSIB: 3.0% (3)
Slide 16: Significant Global Liquidity Position
4 Significant Global Liquidity Position Pro Forma Liquidity Coverage Ratio (1) • The Company is compliant with the U.S. LCR requirements Period End Liquidity ($Bn) Composition of the Liquidity Reserve at 2Q16 TYPE OF INVESTMENT ($Bn) $202 $203 $207 $193 CASH / CASH EQUIVALENTS 51 $182 $182 UNENCUMBE
Slide 17: Appendix
Morgan Stanley Appendix
Slide 18: Extending Maturity Profile of Unsecured Borrowings
Extending Maturity Profile of Unsecured Borrowings Total Short-Term and Long-Term Maturities (1)(2)(3) ($Bn) $40 $34 2Q16 Weighted Average $30 Maturity: 6.3 years $24 $23 $23 $20 $21 $19 $19 $20 $17 $13 $8 $8 $9 $10 $7 $7 $6 $6 $3 $0 1. As of June 30, 2016 2. Total short-term and long-term maturitie
Slide 19: High Quality Liquid Assets (HQLA)
High Quality Liquid Assets (HQLA) Pro Forma High Quality Liquidity Assets ($Bn)(1) $181 $181 $5 $27 $80 $149 $100 2Q16 Non-Bank Bank Level 1 Assets Level 2A Assets Level 2B Assets 1. Pro forma High Quality Liquid Assets is based on the current interpretation of the final Federal Reserve Bank LCR rul
Slide 20: Morgan Stanley
Morgan Stanley 2Q16 Fixed Income Investor Update August 30, 2016
Morgan Stanley — Debt Investor Presentation (August 2016) on 6ix