Morgan Stanley's equities traders are also on track for a pay rise
Q1 reporting season has begun this year. Much like their cousins at JPMorgan, the majority of people at Morgan Stanley are probably grumbling. Some desks at Morgan Stanley however will be very, very happy.
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The topline was very good. Revenues in institutional securities at Morgan Stanley (which encompasses both investment banking and sales & trading) increased by 28% versus Q1 of 2024. Profits went up by an even more impressive 40%.
The vast majority of the increased profits at Morgan Stanley's institution securities division was down to equities sales and trading. Profit in Morgan Stanley’s institutional securities group as a whole went up by $930m vs Q1 of 2024; equities revenue alone went up by $1,286m. If you’re at Morgan Stanley, give the next equities trader (or the software developer working on the trading platform) you see a pat on the back.
Outside of equities, results were broadly on par with JPMorgan's first quarter. Fixed income, currencies, and commodities (FICC) traders generated a 5% revenue increase (below JPMorgan’s 8%) vs Q1 of 2024, while Morgan Stanley's M&A revenues increase by 22%, debt capital markets revenues increased by 22%, and equity capital markets revenues decreased by 26%.
It's April, but Morgan Stanley's equities professionals are probably counting down the days to their next bonus season. Compensation in institutional securities as a whole shot up by 22%; the lion’s share of that increase is probably earmarked for bonuses in equities.
The bank's compensation spend increased by $825m between Q1 of 2024 and 2025. $144m of that was due to severance for 2,000 people fired in March; $78m of that severance went to people (formally) in institutional securities, $50m to those formally in wealth management, and $16m to those in investment management.
Provision for credit losses, also known as write downs, increased by 17% within the institutional securities group at Morgan Stanley across Q1, ahead of JPMorgan’s 9% increase.
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