Morgan Stanley reports record Q2 revenues of $21.3B, EPS $3.46, raises dividend 15%

The Board authorized a new multi-year share repurchase program of up to $20 billion with no set expiration, beginning in Q3 2026. During Q2 2026, the firm repurchased $1.5 billion of common stock (8 million shares at an average price of $197.64), demonstrating ongoing capital return to shareholders alongside the dividend increase.

Morgan Stanley reported Q2 2026 net revenues of $21.3 billion, up 27% year-over-year from $16.8 billion in Q2 2025 and up 4% sequentially from $20.6 billion in Q1 2026. Net income applicable to Morgan Stanley was $5.6 billion, up 58% year-over-year from $3.5 billion, with earnings per diluted share of $3.46 versus $2.13 in the prior year quarter. The firm achieved a 20.7% return on average common equity and a 26.6% return on average tangible common equity.

Institutional Securities net revenues were $11.0 billion in Q2 2026, up 44% year-over-year from $7.6 billion, driven by strong performance across investment banking and trading. Investment banking revenues of $2.4 billion increased 58% year-over-year, with advisory up 57% to $798 million and underwriting up 59% . The segment generated net income of $3.2 billion, up 99% year-over-year, with a 26% return on average common equity.

Wealth Management net revenues were $8.9 billion in Q2 2026, up 14% year-over-year from $7.8 billion, with asset management revenues of $5.3 billion (up 19%), net interest income of $2.3 billion (up 18%), and transactional revenues of $1.2 billion (down 8%). Total client assets reached $8.1 trillion, up 25% year-over-year, with net new assets of $148.1 billion in the quarter. The segment generated net income of $2.1 billion, up 23% year-over-year, with a 29% return on average common equity.

Morgan Stanley's Common Equity Tier 1 capital increased to $87.6 billion as of June 30, 2026, up 11% from $78.7 billion a year earlier. Under the Standardized Approach, the CET1 ratio was 14.8% with risk-weighted assets of $589.8 billion. Under the Advanced Approach, the CET1 ratio was 16.2% with RWA of $541.6 billion. The Tier 1 leverage ratio was 6.0% and the Supplementary Leverage Ratio was 4.9%.

Starting in Q1 2026, Morgan Stanley transitioned to using derivative instruments to hedge deferred cash-based compensation plan awards, replacing the prior approach of using cash instruments. For certain unvested awards, the firm designates derivatives in cash flow hedges with changes in fair value recorded in other comprehensive income and later reclassified to compensation expense over the vesting period. This change is expected to substantially mitigate timing differences between hedge gains/losses and deferred compensation expense recognition, eliminating the need for non-GAAP adjustments that were previously disclosed.