Introduction

 Public Company
 Provides Financial Services
 Founded in 1935 by Henry Sturgis
Morgan and Harold Stanley
 Headquarters in New York
 James P. Gorman (CEO), Jonathan Pruzan
(CFO)
 Products are Investment Banking, Sales
and Trading among others.
 Timeline of the company
– 1860 - JP Morgan founds the world’s first international banking business.
– 1935 - Three JP Morgan partners branch out to form Morgan Stanley as a pure
investment banking business.
– 1986 - Morgan Stanley goes public to broaden capital base and meet the demands of
an increasingly complex marketplace.
– Early 1990s - Rapid expansion under John Mack sees European and Asian staff
increase 40 per cent, but short-term sacrifices to invest in the future undermine return
on equity.
 Continued..

– 2002 - Morgan Stanley drops the Dean Witter name following resignation of John
Mack, the merged bank’s president, leaving Phil Purcell, chairman and chief executive
of the merged bank, in charge.
– October 2003 - Morgan Stanley names Stephen Newhouse president. He succeeds
Robert Scott, who resigns after 33 years with the firm amid a shake-up of duties
orchestrated by Purcell.
Environmental Scan
• The company can use the revenue to expand
its services in more countries
• The global investment banking sector is
much stronger than the US
• Introduce more financial services
• Give a better service for the existing
customers
• Generate a better marketing plan to
overcome the brand name erosion going on
in the past
Cont….
• Change in the international policies
• Change in the government rules and
regulations in financial crisis
• Bad economy
• People like to spend less money but
gain more
• A big competition from other
services such as Merrill Lynch
• A volatile financial market
 Product Line
 Headquarters :New York, NY, United States
 Founded :1935
 Size :10000+ employees
 Industry :Finance
 TypeCompany :Public (MS)
 Morgan Stanley is a leading global financial services Firm providing investment banking,
securities, wealth management and investment management services. With offices in
more than 43 countries, the Firm's employees serve clients worldwide including
corporations, governments, institutions and individuals.
 They stand on 80 years of thoughtful investing, our rich heritage shaping our vision for
the future.
 Market Share
 Morgan Stanley reported second quarter earnings Wednesday that soundly topped
expectations, helped by an increase in stock trading revenues and profits from its wealth
management business.
 Earnings per share: 87 cents vs. 76 cents expected by a Thomson Reuters consensus estimate.
 Revenue: $9.50 billion vs. the $9.09 billion estimate.
 The shares traded about 3 percent higher Wednesday morning.
 Morgan Stanley shares 2-day performance
Change Management Philosophy

Comprehensiveness
Independent
Opportunities
Innovation
Evaluation
Adaptibility
 SWOT ANALYSIS
Strengths
 Strong brand name and good financial position.
 One of the major players in assets management and credit service.
 Wide number of services and products
 Has around 60,000 employees worldwide.
 Operates in over 35 countries.
Weaknesses
 Legal issues where they paid billions of dollar related to retail banking.
 Investment banking has high number of people switching jobs.
 Opportunities
• Expansion in other countries.
• Diversifying portfolios for customers.
• Mergers and acquisition
• Emerging markets, enhancing presence in south Korea and
Russia by obtaining bank licenses

Threats
• Changing govt regulations and financial crisis like recessions.
• Stiff competition
• Inability to compete in foreign market
• Reputation is damaged by unethical practices
 Strategies of change
 Free up excess capital from the fixed income, currencies and commodities trading
division by reducing the size of risk-weighed assets (RWAs) by an additional ~$30
billion over the coming years. This will involve exiting more units that are not
strategically important, and also reducing headcount for strategic units by 25%
 Cut operating costs by reducing compensation expenses as a percentage of revenues
for all divisions, shifting operations to low-cost locations where feasible, leveraging
technology solutions and outsourcing additional processes. Aim is to save $1 billion in
recurring costs by 2017.
 Increase profits for cornerstone wealth management division by pushing more loans-
and-deposits products, and trying to boost pre-tax margins for the division to 25%
 Return more capital to shareholders through dividends and buybacks. This is subject
to regulatory approval as a part of the Fed’s annual stress tests for banks, but Morgan
Stanley is unlikely to face any major hurdles due to its excessively high capital ratio
figures.
 Effects of changes
 Net interest income crossed the $1 billion mark in Q4 2015 from $762
million in the previous quarter
 Morgan Stanley also reinforced its position as the best-capitalized U.S.
banking giant by raising its common equity tier 1 (CET1) capital ratio to
14.1% (fully-phased in) – well above its 10% regulatory requirement.
 Morgan Stanley now aims margins in the 23%-25% range for 2017, very
close to 28% benchmark set by Bank of America-Merrill Lynch.
Implementation of change by MARGON
STANLEY

• Morgan Stanley introduces NEW TOOL KIT to effectively integrate Gender

diversity criteria with in an investment portfolio.
• Morgan Stanley believes “Capital Creates the Change”.
• It invested $10 million to create Education For Employment (EFE), a
network of nonprofits that trains unemployed youth in the Middle East and
North Africa and provides training and linkages to job opportunities.
• Bank of America Merrill Lynch (BAML) and Morgan Stanley have started
treating the variation margin on their cleared swaps -a step that slashed
their gross derivatives assets by a combined $186 billion in the third
quarter and may also have allowed them to cut capital
Although it’s growing stronger, Morgan Stanley is still seen
as one of the weaker Wall Street firms that survived the
financial crisis, and it’s the smallest of the big banks.
Analysis of successful change

– At Morgan Stanley, we advise, originate, trade, manage and

distribute capital for governments, institutions and individuals,
and always do so with a standard of excellence.
– Company Creates new ways to connect
– New frontier for tech innovation : Climate Change Immigration
– Educating the masses about cyber security
- Rise of machines.

- Big brand face big disruption

- Help simplify your financial life through consolidation.

- Emerging Markets

- Is it time to worry ?

- Oil market and geopolitical risks