⚠ Underwriting Fell 81% in One YearModerate threat

Morgan Stanley (MS) — threat to the moat

Morgan Stanley's equity underwriting fees fell 81% in 2022, which is what a closed IPO window does to the best franchise.

No line in the firm is more cyclical than equity underwriting. It earned $4,437 million in 2021 and $851 million in 20221, a fall of about 81%2. It was still only $1,965 million in 20253.

Equity underwriting revenue ($M)4,4372021851202288920231,59920241,9652025Morgan Stanley Forms 10-K FY2023 and FY2025
Down four-fifths, and not yet back.

The fall had nothing to do with Morgan Stanley's franchise. Companies stopped listing and raising equity when markets fell, and the whole industry's fees went with them.

The same volatility runs through the wealth business, because IPOs feed the workplace channel. Just over half of the second quarter's record net new assets were IPO-related inflows4.

Total investment banking revenue fell from $10,272 million in 2021 to $5,235 million in 20225, and the recovery took until 2025 to reach $7,619 million6, still about a quarter below the 2021 peak7. Four years after the peak, the pool has not fully come back.

The equity offerings the firm worked on show the same pattern in volume. Using LSEG data, it reports equity offerings of $32 billion in 2023, $63 billion in 2024 and $79 billion in 20258. The market reopened, but slowly, and the fees followed the volume.

The underwriting fee total cannot be defended; it can only be survived. Equity underwriting was $851 million in the second quarter of 20269. A year in which it fell below $1 billion again would show another closed window, and the firm's recent strength in IPOs would be tested alongside it.

References
  1. ReportedIt earned $4,437 million in 2021 and $851 million in 2022, a fall of about 81%.
    Morgan Stanley Form 10-K for fiscal 2023 - segment results for 2021-2023, Wealth Management metrics for 2021-2023, the block-trading settlements, and 2023 charges. — FY2023 · publ. February 2024 · source ↗
  2. Moat Explorer calcIt earned $4,437 million in 2021 and $851 million in 2022, a fall of about 81%.
    Moat Explorer calculation from Morgan Stanley's reported figures ($ millions unless stated). Wealth Management: asset management revenue share 18,627 / 31,754 = 58.7%; net interest income share 7,911 / 31,754 = 24.9%. Client assets change 2025: 7,381 - 6,194 = 1,187 billion; net new assets 356.3 / 1,187 = 30%, so market and other changes 830.7 billion, about 70%. Fee-based share of advisor-led assets 2,347 / 4,758 = 49.3% (2024); 2,753 / 5,715 = 48.2% (2025); 3,022 / 6,273 = 48.2% (June 2026). Transactional revenue 2,473 / 4,259 - 1 = -42% (2022). Wealth Management pre-tax margins: 2015 3,332 / 15,100 = 22.1%; 2020 4,387 / 19,086 = 23.0%; 2021 6,181 / 24,243 = 25.5%; 2022 6,583 / 24,417 = 27.0%; 2023 6,530 / 26,268 = 24.9%; 2024 7,740 / 28,420 = 27.2%; 2025 9,293 / 31,754 = 29.3%. Wealth Management revenue growth (31,754 / 15,100)^(1/10) - 1 = 7.7% a year. Self-directed assets 1,667 / 1,437 - 1 = 16%; households 8.5 / 8.3 - 1 = 2.4%; daily average revenue trades 1,029 / 837 - 1 = 23% (2025) and 1,278 / 1,029 - 1 = 24% (Q2 2026); 1,278 / 759 = 1.68 since 2023. Wealth Management bank loans 181 / 146 - 1 = 24% (2022-2025). Balance sheet 2025: loans 289,038 / 246,814 - 1 = 17.1%; deposits 415,523 / 376,007 - 1 = 10.5%; borrowings 348,935 / 288,819 - 1 = 20.8%. Firm loans June 2026 315,653 / 289,038 - 1 = 9.2%; 315,653 / 246,814 - 1 = 28% since end-2024. Uninsured deposits 84,201 / 415,523 = 20.3%. Net new assets Q2 2026 excluding IPO-related inflows: just over half of 148.1 billion was IPO-related, so the rest is below 148.1 / 2 = 74.05 billion. Segments: sum of segment net revenues 2025 33,080 + 31,754 + 6,525 = 71,359, less firm net revenues 70,645 = 714 of eliminations; eliminations as reported each year 2015 213, 2016 290, 2017 290, 2018 463, 2019 467, 2020 539, 2021 541, 2022 517, 2023 555, 2024 600, 2025 714. Wealth and Investment Management share of segment revenue: 2015 (15,100 + 2,315) / 35,368 = 49.2%; 2023 (26,268 + 5,370) / 54,698 = 57.8%; 2025 (31,754 + 6,525) / 71,359 = 53.6%. Institutional Securities share of segment revenue 2025 33,080 / 71,359 = 46.4%. Share of firm pre-tax income 2025: Institutional Securities 11,237 / 21,954 = 51.2%; Wealth Management 9,293 / 21,954 = 42.3%; Investment Management 1,478 / 21,954 = 6.7%. Share of segment pre-tax income: 2021 Institutional Securities 11,814 / (11,814 + 6,181 + 1,678) = 11,814 / 19,673 = 60.1%; 2023 4,476 / 11,848 = 37.8%, Wealth and Investment Management 6,530 + 842 = 7,372 = 62.2%; 2025 Institutional Securities 11,237 / 22,008 = 51.1%, Wealth and Investment Management 10,771 / 22,008 = 48.9%; 2015 Wealth and Investment Management (3,332 + 492) / 8,495 = 45.0%. Q2 2026 Institutional Securities 4,262 / 7,348 = 58.0%; revenue 11,040 / 7,643 - 1 = 44%. Institutional Securities pre-tax margins: 2015 4,671 / 17,953 = 26.0%; 2021 11,814 / 29,833 = 39.6%; 2022 6,715 / 24,393 = 27.5%; 2023 4,476 / 23,060 = 19.4%; 2024 8,749 / 28,080 = 31.2%; 2025 11,237 / 33,080 = 34.0%; growth (33,080 / 17,953)^(1/10) - 1 = 6.3% a year. Equity 15,631 / 9,986 - 1 = 57% (2023-2025); 15,631 / 12,230 - 1 = 27.8% (2025); 15,631 / 70,645 = 22.1% of firm; 15,631 / 33,080 = 47.3% of segment. Fixed income 8,716 / 8,418 - 1 = 3.5%; 8,716 / 33,080 = 26.3% of segment. Equity underwriting 851 / 4,437 - 1 = -81% (2022). Investment Management margins: 2021 1,678 / 6,220 = 27.0%; 2023 842 / 5,370 = 15.7%; 2025 1,478 / 6,525 = 22.7%; fees 6,068 / 5,231 - 1 = 16% (2023-2025); Parametric 524 / 336 - 1 = 56%. Regions: Asia 9,420 / 6,434 - 1 = 46%; Asia 9,420 / 70,645 = 13.3% (2025); 6,434 / 54,143 = 11.9% (2023); Americas 52,897 / 70,645 = 74.9% (2025); Q2 2026 Americas 15,046 / 21,348 = 70.5%, Asia 3,930 / 21,348 = 18.4%. Capital and valuation: CET1 excess 14.8% - 11.8% = 3.0 points (June 2026). Goodwill and intangibles 16,726 + 6,010 = 22,736. Acquisitions 11.9 + 8.7 = 20.6 billion. Compensation 29,216 / 48,342 = 60.4% of non-interest expenses; 29,216 / 26,178 - 1 = 11.6%. Dividends per share 3.85 / 0.55 = 7.0 times. Payout 2025 (6,147 + 4,585) / 16,249 = 66%. Buyback price 197.64 / 85.35 = 2.3 times. Total assets 1,675,057 / 1,215,071 - 1 = 37.9% (end-2024 to June 2026); common equity 106,579 / 94,761 - 1 = 12.5%. MUFG stake 380,010,887 shares x $196.31 = about $74.6 billion. Trailing twelve months to June 2026: net revenues 70,645 - 34,531 + 41,928 = 78,042; net income 16,861 - 7,854 + 11,148 = 20,155; diluted EPS 10.21 - 4.73 + 6.90 = 12.38. P/E = market value / net income: 2023 153.05 / 9.087 = 16.8; 2024 202.54 / 13.390 = 15.1; 2025 282.15 / 16.861 = 16.7; September 2026 308.32 / 20.155 = 15.3; price to sales 308.32 / 78.042 = 3.95. Revenue growth (70,645 / 35,155)^(1/10) - 1 = 7.2% a year. Wealth Management 2025: revenue 31,754 / 28,420 - 1 = 11.7%, pre-tax income 9,293 / 7,740 - 1 = 20.1%; bank loans 181 / 160 - 1 = 13.1%, deposits 408 / 370 - 1 = 10.3%; stock plan unvested 658 / 534 - 1 = 23% (six months). Investment banking 7,619 / 10,272 - 1 = -26% (2025 vs 2021). Tangible book value per share 50.00 / 44.57 - 1 = 12.2%. Non-compensation expenses 19,126 / 17,723 - 1 = 7.9%; net revenues 70,645 / 61,761 - 1 = 14.4%. Revenue per employee 70,645 / 83,000 = about 0.85 million. Vanguard, BlackRock and State Street 6.9% + 5.7% + 7.2% = 19.8% of the stock. Diluted EPS growth (10.21 / 2.90)^(1/10) - 1 = 13.4% a year. Q2 2026 Institutional Securities share of segment revenue 11,040 / (11,040 + 8,856 + 1,646) = 11,040 / 21,542 = 51.2%. First half 2026: Institutional Securities pre-tax income 8,423 / 5,392 - 1 = 56%, share of firm pre-tax income 8,423 / 14,359 = 58.7% (H1 2025 5,392 / 10,166 = 53.0%); Wealth Management pre-tax income 5,288 / 4,151 - 1 = 27%. Q2 2026 Wealth Management revenue 8,856 / 7,764 - 1 = 14%; asset management revenue 5,261 / 4,411 - 1 = 19%; firm revenue 21,348 / 16,792 - 1 = 27%; headcount 82,944 / 80,393 - 1 = 3.2%. Investment Management pre-tax income (1,478 - 870) / 8,700 = 7.0% of the Eaton Vance price. Net income 16,861 / 6,127 - 1 = 175%; shareholders equity 111,632 / 75,182 - 1 = 48%. Self-directed plus stock plan unvested assets June 2026 1,811 + 658 = 2,469 billion. Average diluted shares 1,592 / 1,646 - 1 = -3.3%. Total client assets 9,276 / 7,860 - 1 = 18%. Market value 308.32 / 153.05 = 2.0 times (end-2023 to September 2026). 2023 charges 249 + 353 + 293 = 895. Net income 9,087 / 15,034 - 1 = -40% (2021-2023). Borrowings 348,935 / 288,819 - 1 = 21%. Loans to deposits 289,038 / 415,523 = 70%. Compensation 29,216 / 70,645 = 41% of net revenues (2025). Net new assets 2025 quarterly average 356.3 / 4 = 89.1 billion. Forecast extrapolation: 2026 revenue 41,928 x 2 = 83,856; 2026 EPS 196.31 / 15.14 = 12.97; 2027 83.9 x 1.072 = 89.9 and 12.97 x 1.072 = 13.90; 2028 96.4 and 14.90 - capital, valuation, payouts and trailing figures. — 2015-2026 · publ. September 2026 · source ↗
    Method: Arithmetic on figures reported in Morgan Stanley's Forms 10-K and 10-Q, earnings releases and financial supplements, the 2026 proxy statement and market data; operands shown in the source line.
  3. ReportedIt was still only $1,965 million in 2025.
    Morgan Stanley Form 10-K for fiscal 2025 - financial highlights, income statement, balance sheet and business description. — FY2025 · publ. 19 February 2026 · source ↗
  4. ReportedJust over half of the second quarter's record net new assets were IPO-related inflows.
    Morgan Stanley second-quarter 2026 earnings release, Form 8-K exhibit 99.1 - segment results for Institutional Securities, Wealth Management and Investment Management. — Q2 2026 · publ. 15 July 2026 · source ↗
  5. ReportedTotal investment banking revenue fell from $10,272 million in 2021 to $5,235 million in 2022, and the recovery took until 2025 to reach $7,619 million, still about a quarter below the 2021 peak.
    Morgan Stanley Form 10-K for fiscal 2023 - segment results for 2021-2023, Wealth Management metrics for 2021-2023, the block-trading settlements, and 2023 charges. — FY2023 · publ. February 2024 · source ↗
  6. ReportedTotal investment banking revenue fell from $10,272 million in 2021 to $5,235 million in 2022, and the recovery took until 2025 to reach $7,619 million, still about a quarter below the 2021 peak.
    Morgan Stanley Form 10-K for fiscal 2025 - financial highlights, income statement, balance sheet and business description. — FY2025 · publ. 19 February 2026 · source ↗
  7. Moat Explorer calcTotal investment banking revenue fell from $10,272 million in 2021 to $5,235 million in 2022, and the recovery took until 2025 to reach $7,619 million, still about a quarter below the 2021 peak.
    Moat Explorer calculation from Morgan Stanley's reported figures ($ millions unless stated). Wealth Management: asset management revenue share 18,627 / 31,754 = 58.7%; net interest income share 7,911 / 31,754 = 24.9%. Client assets change 2025: 7,381 - 6,194 = 1,187 billion; net new assets 356.3 / 1,187 = 30%, so market and other changes 830.7 billion, about 70%. Fee-based share of advisor-led assets 2,347 / 4,758 = 49.3% (2024); 2,753 / 5,715 = 48.2% (2025); 3,022 / 6,273 = 48.2% (June 2026). Transactional revenue 2,473 / 4,259 - 1 = -42% (2022). Wealth Management pre-tax margins: 2015 3,332 / 15,100 = 22.1%; 2020 4,387 / 19,086 = 23.0%; 2021 6,181 / 24,243 = 25.5%; 2022 6,583 / 24,417 = 27.0%; 2023 6,530 / 26,268 = 24.9%; 2024 7,740 / 28,420 = 27.2%; 2025 9,293 / 31,754 = 29.3%. Wealth Management revenue growth (31,754 / 15,100)^(1/10) - 1 = 7.7% a year. Self-directed assets 1,667 / 1,437 - 1 = 16%; households 8.5 / 8.3 - 1 = 2.4%; daily average revenue trades 1,029 / 837 - 1 = 23% (2025) and 1,278 / 1,029 - 1 = 24% (Q2 2026); 1,278 / 759 = 1.68 since 2023. Wealth Management bank loans 181 / 146 - 1 = 24% (2022-2025). Balance sheet 2025: loans 289,038 / 246,814 - 1 = 17.1%; deposits 415,523 / 376,007 - 1 = 10.5%; borrowings 348,935 / 288,819 - 1 = 20.8%. Firm loans June 2026 315,653 / 289,038 - 1 = 9.2%; 315,653 / 246,814 - 1 = 28% since end-2024. Uninsured deposits 84,201 / 415,523 = 20.3%. Net new assets Q2 2026 excluding IPO-related inflows: just over half of 148.1 billion was IPO-related, so the rest is below 148.1 / 2 = 74.05 billion. Segments: sum of segment net revenues 2025 33,080 + 31,754 + 6,525 = 71,359, less firm net revenues 70,645 = 714 of eliminations; eliminations as reported each year 2015 213, 2016 290, 2017 290, 2018 463, 2019 467, 2020 539, 2021 541, 2022 517, 2023 555, 2024 600, 2025 714. Wealth and Investment Management share of segment revenue: 2015 (15,100 + 2,315) / 35,368 = 49.2%; 2023 (26,268 + 5,370) / 54,698 = 57.8%; 2025 (31,754 + 6,525) / 71,359 = 53.6%. Institutional Securities share of segment revenue 2025 33,080 / 71,359 = 46.4%. Share of firm pre-tax income 2025: Institutional Securities 11,237 / 21,954 = 51.2%; Wealth Management 9,293 / 21,954 = 42.3%; Investment Management 1,478 / 21,954 = 6.7%. Share of segment pre-tax income: 2021 Institutional Securities 11,814 / (11,814 + 6,181 + 1,678) = 11,814 / 19,673 = 60.1%; 2023 4,476 / 11,848 = 37.8%, Wealth and Investment Management 6,530 + 842 = 7,372 = 62.2%; 2025 Institutional Securities 11,237 / 22,008 = 51.1%, Wealth and Investment Management 10,771 / 22,008 = 48.9%; 2015 Wealth and Investment Management (3,332 + 492) / 8,495 = 45.0%. Q2 2026 Institutional Securities 4,262 / 7,348 = 58.0%; revenue 11,040 / 7,643 - 1 = 44%. Institutional Securities pre-tax margins: 2015 4,671 / 17,953 = 26.0%; 2021 11,814 / 29,833 = 39.6%; 2022 6,715 / 24,393 = 27.5%; 2023 4,476 / 23,060 = 19.4%; 2024 8,749 / 28,080 = 31.2%; 2025 11,237 / 33,080 = 34.0%; growth (33,080 / 17,953)^(1/10) - 1 = 6.3% a year. Equity 15,631 / 9,986 - 1 = 57% (2023-2025); 15,631 / 12,230 - 1 = 27.8% (2025); 15,631 / 70,645 = 22.1% of firm; 15,631 / 33,080 = 47.3% of segment. Fixed income 8,716 / 8,418 - 1 = 3.5%; 8,716 / 33,080 = 26.3% of segment. Equity underwriting 851 / 4,437 - 1 = -81% (2022). Investment Management margins: 2021 1,678 / 6,220 = 27.0%; 2023 842 / 5,370 = 15.7%; 2025 1,478 / 6,525 = 22.7%; fees 6,068 / 5,231 - 1 = 16% (2023-2025); Parametric 524 / 336 - 1 = 56%. Regions: Asia 9,420 / 6,434 - 1 = 46%; Asia 9,420 / 70,645 = 13.3% (2025); 6,434 / 54,143 = 11.9% (2023); Americas 52,897 / 70,645 = 74.9% (2025); Q2 2026 Americas 15,046 / 21,348 = 70.5%, Asia 3,930 / 21,348 = 18.4%. Capital and valuation: CET1 excess 14.8% - 11.8% = 3.0 points (June 2026). Goodwill and intangibles 16,726 + 6,010 = 22,736. Acquisitions 11.9 + 8.7 = 20.6 billion. Compensation 29,216 / 48,342 = 60.4% of non-interest expenses; 29,216 / 26,178 - 1 = 11.6%. Dividends per share 3.85 / 0.55 = 7.0 times. Payout 2025 (6,147 + 4,585) / 16,249 = 66%. Buyback price 197.64 / 85.35 = 2.3 times. Total assets 1,675,057 / 1,215,071 - 1 = 37.9% (end-2024 to June 2026); common equity 106,579 / 94,761 - 1 = 12.5%. MUFG stake 380,010,887 shares x $196.31 = about $74.6 billion. Trailing twelve months to June 2026: net revenues 70,645 - 34,531 + 41,928 = 78,042; net income 16,861 - 7,854 + 11,148 = 20,155; diluted EPS 10.21 - 4.73 + 6.90 = 12.38. P/E = market value / net income: 2023 153.05 / 9.087 = 16.8; 2024 202.54 / 13.390 = 15.1; 2025 282.15 / 16.861 = 16.7; September 2026 308.32 / 20.155 = 15.3; price to sales 308.32 / 78.042 = 3.95. Revenue growth (70,645 / 35,155)^(1/10) - 1 = 7.2% a year. Wealth Management 2025: revenue 31,754 / 28,420 - 1 = 11.7%, pre-tax income 9,293 / 7,740 - 1 = 20.1%; bank loans 181 / 160 - 1 = 13.1%, deposits 408 / 370 - 1 = 10.3%; stock plan unvested 658 / 534 - 1 = 23% (six months). Investment banking 7,619 / 10,272 - 1 = -26% (2025 vs 2021). Tangible book value per share 50.00 / 44.57 - 1 = 12.2%. Non-compensation expenses 19,126 / 17,723 - 1 = 7.9%; net revenues 70,645 / 61,761 - 1 = 14.4%. Revenue per employee 70,645 / 83,000 = about 0.85 million. Vanguard, BlackRock and State Street 6.9% + 5.7% + 7.2% = 19.8% of the stock. Diluted EPS growth (10.21 / 2.90)^(1/10) - 1 = 13.4% a year. Q2 2026 Institutional Securities share of segment revenue 11,040 / (11,040 + 8,856 + 1,646) = 11,040 / 21,542 = 51.2%. First half 2026: Institutional Securities pre-tax income 8,423 / 5,392 - 1 = 56%, share of firm pre-tax income 8,423 / 14,359 = 58.7% (H1 2025 5,392 / 10,166 = 53.0%); Wealth Management pre-tax income 5,288 / 4,151 - 1 = 27%. Q2 2026 Wealth Management revenue 8,856 / 7,764 - 1 = 14%; asset management revenue 5,261 / 4,411 - 1 = 19%; firm revenue 21,348 / 16,792 - 1 = 27%; headcount 82,944 / 80,393 - 1 = 3.2%. Investment Management pre-tax income (1,478 - 870) / 8,700 = 7.0% of the Eaton Vance price. Net income 16,861 / 6,127 - 1 = 175%; shareholders equity 111,632 / 75,182 - 1 = 48%. Self-directed plus stock plan unvested assets June 2026 1,811 + 658 = 2,469 billion. Average diluted shares 1,592 / 1,646 - 1 = -3.3%. Total client assets 9,276 / 7,860 - 1 = 18%. Market value 308.32 / 153.05 = 2.0 times (end-2023 to September 2026). 2023 charges 249 + 353 + 293 = 895. Net income 9,087 / 15,034 - 1 = -40% (2021-2023). Borrowings 348,935 / 288,819 - 1 = 21%. Loans to deposits 289,038 / 415,523 = 70%. Compensation 29,216 / 70,645 = 41% of net revenues (2025). Net new assets 2025 quarterly average 356.3 / 4 = 89.1 billion. Forecast extrapolation: 2026 revenue 41,928 x 2 = 83,856; 2026 EPS 196.31 / 15.14 = 12.97; 2027 83.9 x 1.072 = 89.9 and 12.97 x 1.072 = 13.90; 2028 96.4 and 14.90 - capital, valuation, payouts and trailing figures. — 2015-2026 · publ. September 2026 · source ↗
    Method: Arithmetic on figures reported in Morgan Stanley's Forms 10-K and 10-Q, earnings releases and financial supplements, the 2026 proxy statement and market data; operands shown in the source line.
  8. ReportedUsing LSEG data, it reports equity offerings of $32 billion in 2023, $63 billion in 2024 and $79 billion in 2025.
    Morgan Stanley Form 10-K for fiscal 2025 - financial highlights, income statement, balance sheet and business description. — FY2025 · publ. 19 February 2026 · source ↗
  9. ReportedEquity underwriting was $851 million in the second quarter of 2026.
    Morgan Stanley second-quarter 2026 earnings release, Form 8-K exhibit 99.1 - segment results for Institutional Securities, Wealth Management and Investment Management. — Q2 2026 · publ. 15 July 2026 · source ↗
Sources
Generated September 26, 2026