Morgan Stanley · NYSE:MS
Morgan Stanley — Morgan Stanley 2016 U.S. Financials Conference
17 slides from Morgan Stanley's conference presentation, Jun 14, 2016
Slide 1: Morgan Stanley 2016 U.S. Financials Conference
Morgan Stanley 2016 U.S. Financials Conference James P. Gorman, Chairman and Chief Executive Officer June 14, 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 this presentation or in the Company’s most recent Annual Report on Form 10-K, Definitive Proxy Statement, Quarterly Reports on Fo
Slide 3: Putting Things in Context
Putting Things in Context Transformed Business Mix Full Year 2009 Net Revenues, ex-DVA(1)(2)(3): Full Year 2015 Net Revenues, ex-DVA(1)(2)(3): $28.7Bn $34.5Bn IM IM IBD IBD WM IED IED WM FIC FIC Strengthened Capital Position / De-Risked Business Fully Phased-in Avg. Common Equity, ex-DVA ($Bn)(4) Gl
Slide 4: World-Class Investment Bank and Wealth Manager
World-Class Investment Bank and Wealth Manager Our Integrated Platform Is Distinguished by Industry-Leading Franchises(1)(2)(3) EQUITY SALES & TRADING #1 in Global Wallet Share MERGERS & ACQUISITIONS #2 in Global Announced M&A #1 in Global IPOs EQUITY UNDERWRITING #2 in Global Equity and Equity-Link
Slide 5: So Where Are We Now?
So Where Are We Now? Transformed Business Mix: Wealth Management and Investment Management account for over 50% of Firm net revenues Maintained Leadership in World-Class Franchises: Excellence in Investment Banking and Equity Sales & Trading are balanced by the world’s largest wealth manager De-Risk
Slide 6: But The Gap to Our Target ROE Still Remains
But The Gap to Our Target ROE Still Remains 2015 Performance(1)(2) How We Reach 9 – 11% Earnings: $4.7Bn A Modest Revenue Growth = 7% ROE Avg. CE: $67Bn B Expense Efficiency Target = 9% – 11% ROE C Capital Return Gap = 200 – 400 bps MORGAN STANLEY U.S. FINANCIALS CONFERENCE | JUNE 14, 2016 6
Slide 7: Wealth Management Has Contributed Quality Revenues
Wealth Management Has Contributed Quality Revenues Significant Growth in Assets from High and Ultra-High Net Worth Clients Assets by Client Segment ($Bn) 4Q09 1Q16 %∆ Zero Days in 2015 / 1Q16 with Less Than $10MM or more 410 770 +88% $50MM Daily Revenue $1MM - $10MM 613 797 +30% Approximate Daily Re
Slide 8: And We See Further Upside From Here
And We See Further Upside From Here 1 2 3 Grow Net Interest Income Deepen Relationships Leverage Digital Wealth Management Lending Wealth Management Clients with Deepen client engagement in U.S. Banks(1) a Loan at Morgan Stanley(2) ~$70Bn 16% Support FAs in developing ~$60Bn new client relationships
Slide 9: Continue to Execute in Leading Franchises and Optimize FIC
Continue to Execute in Leading Franchises and Optimize FIC 1 2 Continue to Press Our Advantages Fixed Income and Commodities in Progress Equity Sales & Trading Revenues, ex-DVA ($Bn)(1)(2) Fixed Income and Commodities: 1Q16 vs. 3Q15 8.1 6.6 6.9 5.9 (25%) +50% Net Revenue, Headcount 2012 2013 2014 20
Slide 10: 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 • New Compensation Targets T
Slide 11: 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 12: Project Streamline: Compensation Discipline
Project Streamline: 2 Compensation Discipline Continue to Deliver on Targets Compensation Ratios Firm Efficiency Ratio, ex-DVA(2) Institutional Securities, ex-DVA(1) Assuming flat revenues, expenses 37% <37% decline by $1Bn by 2017 77% 74% 2015 2017 Target in Flat Revenue Wealth Management(1) 57% <5
Slide 13: CCAR Is Our Binding Capital Constraint
CCAR Is Our Binding Capital Constraint Continue to Accrete Capital Despite Consistently Increasing Capital Returns Average Common Equity, ex-DVA(1) Morgan Stanley Capital Return (1)(2) $68Bn $67Bn $3.2Bn $63Bn $60Bn $54Bn $1.6Bn $0.8Bn $0.3Bn $0.4Bn (3) (4) (5) 2011 2012 2013 2014 2015 2011 2012 201
Slide 14: What Will Get Us to 9% – 11% ROE Target
What Will Get Us to 9% – 11% ROE Target 1 Deliver on Project Streamline 2 Maintain Compensation Discipline 3 Continue Buybacks and Dividend Distribution 4 Modest Revenue Growth MORGAN STANLEY U.S. FINANCIALS CONFERENCE | JUNE 14, 2016 14
Slide 15: End Notes
End Notes These notes refer to the financial metrics presented on Slide 3. 1. ‘WM’ = Wealth Management, ‘IM’ = Investment Management, ‘IBD’ = Investment Banking, ‘IED’ = Equity Sales & Trading, ‘FIC’ = Fixed Income and Commodities 2. 2009 and 2015 Net Revenues of $28,693 million and $34,537 million,
Slide 16: End Notes
End Notes These notes refer to the financial metrics presented on Slide 8. 1. U.S. Banks represents the Company’s U.S. Bank operating subsidiaries, Morgan Stanley Bank, N.A. and Morgan Stanley Private Bank, National Association. 2. ‘Wealth Management Clients With a Loan at Morgan Stanley’ is a Morga
Slide 17: Morgan Stanley 2016 U.S. Financials Conference
Morgan Stanley 2016 U.S. Financials Conference James P. Gorman, Chairman and Chief Executive Officer June 14, 2016
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