Morgan Stanley said on Tuesday that it is closely monitoring potential M&A opportunities as a more accommodating regulatory stance makes bank deals more feasible.
Chief Executive Ted Pick told attendees at the bank's U.S. investor conference that Morgan Stanley is "wide awake" to consolidation in the industry. "We're keeping an eye" on sector activity, he said, adding that regulators have shown greater willingness to approve deals.
Pick identified wealth management and asset management as areas where the firm could consider inorganic growth. He noted that the bank completed its acquisition of private shares platform EquityZen last year and that its largest prior deal was the $7 billion purchase of investment management firm Eaton Vance in 2021.
Acknowledging the difficulties of deal-making in the sector, Pick said: "M&A in this industry is really challenging and we want to get it right."
The comments come amid growing interest across large banks in using acquisitions to sharpen competitive positions, modernize technology stacks and expand in faster-growing businesses such as wealth and payments. Last month, JPMorgan Chase's chief executive said his firm could commit between $10 billion to $20 billion to M&A opportunities over the next couple of years, underscoring that major lenders are prepared to deploy capital for strategic deals.
Investment bankers are currently operating in one of the most favorable environments they have seen in years, driven by marquee IPOs and multibillion-dollar acquisitions. That uptick follows a period when higher borrowing costs, market volatility and regulatory uncertainty had constrained dealmaking.
Morgan Stanley has been active in high-profile deals and offerings. The bank is one of the lead underwriters on the $75 billion SpaceX IPO, which is expected to debut on Friday. The firm's first-quarter results reflected that momentum: investment banking revenue rose 36%, led primarily by M&A advisory. Volatility tied to the Iran war contributed to record equities trading revenue, and the institutional securities business generated $10.7 billion of revenue, up 19% from a year earlier.
"I think it's fair to say that the securities business, investment banking and markets across the integrated firm is really humming right now," Pick said, pointing to the broad-based strength across the franchise.
As the firm weighs potential transactions, Pick stressed careful execution and the need to get deals right amid the complexities of industry consolidation. The comments reflect a balancing act between seizing strategic opportunities and managing the known challenges of integrating acquisitions in financial services.
The bank's recent deals and quarterly performance underscore how improved market conditions and regulatory signals are reshaping the M&A landscape for large financial institutions.