Morgan Stanley · NYSE:MS
Morgan Stanley — Corporate Update (January 2017)
19 slides from Morgan Stanley's corporate update, Jan 17, 2017
Slide 1: Strategic Update
Strategic Update James P. Gorman, Chairman and Chief Executive Officer January 17, 2017
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 Company’s Annual Report on Form 10-K, Definitive Proxy Statement, Quarterly Reports on Form 10-Q and the
Slide 3: Mark to Market: 2017 Strategic Objectives
Mark to Market: 2017 Strategic Objectives(1) 1 Streamline: $1Bn Expense Reduction On Track for $1Bn in Expense Reduction by 2017 2 Complete Fixed Income Restructuring and Maintain Revenue Footprint Retained Revenue Footprint, with 25% Headcount Reduction and Reduced Resources 3 Wealth Mgmt. Pre-Tax
Slide 4: 2016 Performance: Progress Towards 9-11% ROE
2016 Performance: Progress Towards 9 – 11% ROE(1)(2) Earnings: $4.7Bn Avg. CE: $67Bn = 7.0% ROE(3) Earnings: $5.5Bn Avg. CE: $69Bn = 8.0% ROE(4) ROE: 9 11% 2017 Target
Slide 5: Opportunities for Future Operational Improvements Deliver on Target ROE
Opportunities for Future Operational Improvements 1 2 3 4 5 Deliver on Target ROE
Slide 6: 2017 & Beyond: Expect Continued Operating Leverage
1 2017 & Beyond Expect Continued Operating Leverage to Achieve 2017 Expense Efficiency Ratio Target of 74.0% Maintain Expense Discipline and Fully Realize Streamline Savings Focused on Operating Leverage Firm Revenues, ex-DVA ($Bn)(1) Reduced Non-Compensation Expenses by ~$700MM Maintained Compensat
Slide 7: Leading Investment Banking Franchise
Leading Investment Banking Franchise Continued Strength in Advisory Upside from Normalization of Underwriting Industry Completed M&A Volumes ($Tn)(1) 2 IPOs Other Equity & Equity-Linked Industry Equity Underwriting Volumes ($Tn)(2) 19.4% 32.9% Morgan Stanley Increasing Market Share 8.8% 8.3% Morgan
Slide 8: One Management Team: Sales & Trading Strategic Priorities
One Management TeamLeveraging Best of Group Technology Across all Products and RegionsSharing and Optimizing Resources Sales & Trading Strategic Priorities SALES & TRADING Maintain #1 Global RevenueGrow Wallet ShareDeepen Prime Brokerage FootprintMonetize Relationships in Flow TradingFurther Build A
Slide 9: Monetizing Strength Across Equities; Fixed Income Restructuring in Progress
2 ($78Bn) Monetizing Strength Across Equities Fixed Income Restructuring in Progress Equity Sales & Trading Total Wallet, ex-DVA ($Bn)(1)(2)(3) ($41Bn) Fixed Income and Commodities, ex-Lending ($Bn)(6)(7)(8) Fixed Income Sales & Trading Revenues, ex-DVA ($Bn)(5) Sales & Trading Positioned for Market
Slide 10: Wealth Management Poised to Grow
3 Pre-Tax Margin (%) +13% (2) Expanded Margins Allow for Reinvestments into Profitable Growth Wealth Management Poised to Grow Wealth Management Has Achieved Several Critical Milestones Since the JV Franchise Growth 2017 Pre-Tax Margin(1) Target at 23-25%, Focus on Growing Pre-Tax Earnings Revenues
Slide 11: Wealth Management Revenue Headwinds Abating
3 Transactional Revenue ($Bn)(1) Wealth Management Revenue Headwinds Abating Upside From Increased Retail Engagement Continued Expense Leverage Additional Tailwind From Rising Rates Total Expenses ($Bn) Net Interest Income ($Bn) Compensation/Ratio(2) Non-Compensation 56.9% 56.5% 59.3% Low Rates Offs
Slide 12: Wealth Management Digital Strategy
Wealth Management Digital Strategy Digital Tools Enhance Client Experience & Capabilities Attract New Customer Base Being Built Through a Network of Best-of-Breed Partnerships Modernized Branch System with digital self-service to drive FA efficiency Modernize Branch System & FA Operations 1 Predicti
Slide 13: Summary: Margin Expansion and Growth Opportunities
Summary Margin Expansion and Growth Opportunities Consistent Margin Improvement Since the Acquisition of Smith Barney Key Drivers Additional Drivers Pre-Tax Margin (%)(1)(2) Merger Synergies Building the Bank Cost Discipline Annuitizing Revenues Retail Investor Engagement Rising Rates Lending Penetr
Slide 14: Investment Management Enters Period of Stability and Growth
Investment Management Enters Period of Stability and Growth AUM$417Bn Organizational RealignmentRationalized Cost Base Legacy Third Party Fund LP Positions Enhance Distribution CapabilitiesU.S. Intermediary and AsiaSolutions & Partnerships FocusNew Product Launches Differentiated Alternative Origina
Slide 15: Capital Sufficiency Supporting Growth in Capital Return
Capital Sufficiency… ...Supporting Growth in Capital Return Continue To Return Capital To Shareholders Total Capital Return ($Bn) Average Common Equity, ex-DVA ($Bn)(1) Common Dividends Buybacks 5
Slide 16: End Notes
End Notes These notes refer to the financial metrics presented on Slide 3.Represents progress during the current calendar year against the 2017 Strategic Objectives established at the beginning of 2016.Pre-tax margin is a non-GAAP financial measure that the Company considers useful for investors to
Slide 17: End Notes
End Notes These notes refer to the financial metrics presented on Slide 9.Total Wallet represents the aggregated reported net revenues for the following peers: Goldman Sachs, JP Morgan, Bank of America, Citigroup, UBS, Deutsche Bank, Credit Suisse, and Barclays. Morgan Stanley’s wallet share calcula
Slide 18: End Notes
End Notes These notes refer to the financial metrics presented on Slide 11.Transactional revenues include investment banking, trading, and commissions and fee revenues.Compensation ratio is calculated as compensation and benefits expense as a percentage of Net Revenues.These notes refer to the finan
Slide 19: Strategic Update
Strategic Update James P. Gorman, Chairman and Chief Executive Officer January 17, 2017