摩根士丹利+全球银行和资产管理公司：进入伟大的未知-英_市场营销策划_重点报告202301202_d.docx

BLUEPAPERNovember19,20231000PMGMTGlobalBanks&AssetManagersIntotheGreatUnknownTwoforceswilldriveWholesaleBankstoadaptinthenextcycle:1)theendoflowerforlongerrates,and2)potentiallydivergingcapitalstandardsbetweentheUSandotherjurisdictions,benefittingnon-banksandbanksoutsidetheUS.Ourframeworkassessesthewiderangeofpotentialoutcomes.OlivetWyman»sagloballeaderinmanagementconsultingFormoremformatQ,visitww.WyrnarOliverWymanisnotauthorizedo<regulatedbythePRAQfIheFCAandisnotprovidinginvestmentadveeOlwerWymanauthorsatenotresearch8a1ystsandareneitherFOAnorFNRAregisteredOhverWymanauthorshaveOntycontributedtherexpertiseonbusinessstrategyMIhlnthereportOhVCrWymansviewsareclearlydelineatedThesecu11es11dvaluationsectionsofthisIBpOrlaretheWOrkofMorganStanleyonlyandnotOliverWymanFordisclcsuesspecificallypertainingtoOverWyman,pleaseseetheDisclosureSectionlocatedattheendOfrhlSreportOhvefWymanisagloballeaderinmanagementconsultingRJrmorenfo<nmio,MSftVMWQHVefwymancomOliverWymamsnotautlwzedregulatedbythePRAortheFCAandisnotprovidingInVeSInWNadviceOliverWymanauthorsarenotresearchanalysisandareneitherFCAnorFINRAregistaed.OliverWymanauthorshaveonlycclbtted!heirexpanseonbusinessstrategy*vrthinthe刖口On5”:门Wyman'sviewsaecaryTheMCJMaSandalua!csect<onsofthis?POrtareUwWCdQfMorganStanleyonlyandnotOlivrWymanFordisclosuresspecificallypeilqiningIoOhverWyman,pleaseseetheDisclosureSectionlocatedaftheendofthisreportMorganStanleydeesandseeks!odobusmesswithcompaniescoveredinMorganStanleyResearchAsaesuII.nvestrsshouldbeawathatthefirmmayIiaveHconflictofImefeSN府"加dfcttheObjectivrtyofMorganStanleyResearchInvestorsshouldco11sie<,MorganStanleyResearchasonlyasinglefactorGmakingIheirnvestmenidecision.ForanalystCeftrficationandotherimportantdisclosures,refertotheDisclosureSection,locatedattheendofthisreport.Authors-MorganStanleyMichaelJ.Cyprys,CFA1CPA1EQUITYANALYST+12127617619MichaeLCyprysBetsyL.Graseck,CFA1EQUITYANALYST+12127618473Betsy.GraseckGiuliaAuroraMiottolCFA2EQUITYANALYST+4420742553UGiulia.Aurora.MiottomorganstanleY.comConneLlJ.Schmitz1RESEARCHASSOCIATE+12127616252ConnelLSchmitzmorgan$RyanKenny,CFA1EQUITYANALYST+12127611664RyanKennymorganstanLMananGosalia1EQUITYANALYST+12127614092Manan.GosaUaAlvaroSerrano3EQUITYANALYST+442074256942Alvaro.SerranoVishalShah2EQUITYANALYST+442076772743Vish3l.Shah6BruceHamilton2EQUITYANALYST+442074257597Bruce.Hamilton1 MorganStanley&CoILC2 MOrganStanley&Co.InternationalPLC*3 MorganStanleyEuropeS.E.*OliverWymanDyhnWalshPartner+16463648676Dylan.WalshRonanO1KellyPartner+447733156894RonanOKellyMingMinLeePartner+16463648693MingMin.LeeChristopherRigbyPartner+447751234684Chrlstopher.RigbyMariyaRosbergPartner+16463648448Mariya.RosbergElisaHainingPrincipal+447759021920Elisa.HainingSamMaeglinAssociate+16468314925Sam.MaeglinSimoneMarschallAssociate+447385423823Simone.MarschallNoaBlaneDamelinConsultant+447702954885Noa.BlaneDamelinContributorsMorganStanleyStephanieMa1RESEARCHASSOCIATEStephanie.MaChumaNwankolCFA1RESEARCHASSOCIATEChuma.NwankwoMarinaMassuti-RESEARCHASSOCIATEMarina.MassutiAndreiStadniklFIAAEQUITYANALYSTAndrei.StadnikMiaNagasakaEQUITYANALYSTMia.NagasakaNickLordEQUITYANALYSTNick.LordRichardXulCFA Morgan Stanley & Co LlC Morgan Stanley & Co Intemittonal PLC4 Motgan Stanley Australia Unuled+ Morgan Stanley MUG Securities Co., UD,* Morgan Stanley Asia (Singapore) PTE.+ Morgan Stanley Asia LimitedfEQUITYANALYSTRichard.XuChiyaoHuangEQUITYANALYSTChiyao.HuangOliverWymanHuwvanSteenisViceChairHuw.VanSteenisNikolaiDienerowitzPartnerNikolaLDienerowitz(三)OliverwymancomMichaelMagumbeSeniorResearchAnalystMichael.Magumbe()oliverwyman.coJulianAdLerEngagementManagerJulian.AdlerJuliaHillenbrandAssociateJulia.HillenbrandContents5Preface7 JointExecutiveSummary8 MorganStanleyExecutiveSummary13OurBlueP叩erin10Charts18IndustryOutlook22USCapitalRulesandValueShifts27ManagementActions32Conclusion36GlobalInvestmentBanks:InvestmentImplicationsIfEndgameImplementedasProposed37Basel3EndgameAdaptationScenarioAnalysisbyBank47EuropeanBankstoTakeShareIfEndgameImplementeda$Proposed53 APACBanksSeeLessCapitalPressureFromNewRules54 WhatAreBanksSayingontheFinalizationofBasel3?56 HowOurGlobalBankCoverageIsPositionedfortheNextFewYears58Non-BankAssetManagers:InvestmentImplicationsIfEndgameImplementedasProposed60Non-BankLenders:AssetManagerstoTakeShareIfEndgameImplementedasProposed71RecentDevelopmentsacrossAssetManagersPrefaceWhat'sNewInourBluePaper? Our2023-2025industryoutlookisinformedbytwokeyriskfactorsthathavefat-talledoutcomes:macroandregulatory.Weshowthreescenariosonthemacrooutlook:SoftLanding(ourbasecase),HardLandingandNoLanding. Inourbasecase,whilewebeGeve2023torepresentthelow-watermarkforcapitalmarketsactivityandarecoverytobeginnextyear,wedonotseetheextremelyfavorableconditionsof2O2O2O21returningsoon.Themostsuccessfulplayerswillleverageanabilitytodriverobustinterestincome,scaleinliquidtradingtocapturesustainedvolatilityandaccesstorapidlygrowingbusinessesLikeprivatecredit. WeassessthepotentialImplicationsoftheUSBasel3Endgameproposalaswritten,whichismuchstricterthanglobalBasel3standards,givenapotential35%RWAincreasevs.onlya1S%increaseforEUrules. Themostlikelyoutcomeweseeisadjustmentstotheproposedregulationthatdirectionallyalignmorewithglobalstandards,resultinginamoreUmttedincreaseincapitalrequirements(likelybetweenthe15%RWAupliftweestimateinEuropeandthe35%UPUftweestimateintheUSproposaOwithlessimpactonrevenuesandamorelimiteddragonRoEsofsomewherebetweenour12ptscenario("Alignment")andour2-3ptscenario("Adaptation").(SeeExhibit22formoredetail.) EvenIntheunlikelyscenariooftherulepassingincurrentfon,wewouldexpectbankstomitigatetheimpactthroughrepricingandadaptingthebusinessmodel,translatingtoanet2-3ptRoEreduction,wellbelowthegross6ptRoEimpactassumedbeforeexpectedmitigation.Tbis'Adaptation*scenariotranslatestoa$30bnor9%revenuereduction. Wesizetheopportunityforalternativeassetmanagerstopotentiallytakesharefromwholesalebanksat$400billioninprivatecreditAUMand$3-4billionInrevenuesacrosssecuritization,leveraged&acquisitionfinance,asset-basedfinanceandcommercialrealestate.Butweseealargeropportunityforthemtotakesharefromcommercialandretailbanks(whichisbeyondthescopeofthisreport)giventheimpactofproposedcapitalrulesinthecontextofwhatIsUkelytobeachallengingcreditcycleforcommercialrealestate.WeseeanoverallprivateCredittotaladdressablemarket(TAM)of$32trilboforalternativeassetmanagerstopotentiallytakeshare.Weassessindividualassetmanagers'privateeditcapabilitiesandabilitytoparticipate.BluepaperWhy Changes to the Current 'Basel 3 Endgame' Proposal Are Possible Proposed US rules from July 2023 are still in the comment period phase We expect banks, Industry groups and other stakeholders will share strong advocacy points on how the proposal as written will impact their business models, financing avallabilfty and the overall US economy. In October 2023, the comment period due date was extended from November 30,2023 to January 16,2024 to allow interested parties more time to analyze the issues and prepare their remarks. Also in October 2023, the Federal Reserve Board launched a Special Data Collection to gather more information from affected banks and further clarify the estimated effects of the proposal and inform any final rule. The submission deadbne for the data collection is also January 16,2024. Reguhtors are actively engaged in dialogue with various stakeholders to better understand the impact of the proposal and listen to major points of advocacy to avoid unintended consequences. Split votes at both the Federal Reserve and FDIC suggest support for the proposals as currently written is not unanimous. In July 2023, the FedS Board of Governors voted 42 in support of moving the Basel 3 Endgame proposal forward to comment period and the FDIC Board voted 32. This is highly unusual, as US regulators historically have moved in lockstep through the Notice of Proposed Rulemaking (NPR) process. It also contrasts with 2012's Basel 3 regulatory capital reform proposals, which received unanimous Board approval to move forward. We expect a final rule to be Issued in mid-2024. If the rule is flexed to abgn more closely with global standards, there would be Less of an impact on revenues and RoEs for US Wholesale Banks. Note also that while the large US Global Systemically Important Banks (GSIBs) have strong capital levels currently and we expect they will continue to dear minimum capital requirements with the new rule as proposed by the end of the phaseln period, investors and Boards expect banks to manage to RoE targets. As a result, we would expect actions to partially offset any RoE degradation.JointExecutiveSummaryThewholesalebankingindustry'hasspenttheyearssincetheGlobalFinancialCrisis(GFC)reshapingitsbusinessmodeltoincreaseresilienceandgeneratesustainablereturns.Thetransformationhasbeenprofound,buttheindustrymustnowrespondtotwonewandsignificantshiftsIntheoperatingenvironment. Theendoftheeasymonetarypolicyandfiscalstimulussupercycle.alreadyunderway Theintroductionofanewcapitalregimeworldwide,albeitwithhighlyuncertainparametersandtimelinesforimplementationacrossdifferentjurisdictionsWeexpectthesechangestoinfluencetherevenueandreturnsoutlookfortheindustry.InMarchofthisyear,rapidlyrisingInterestratestriggeredacontainedbankingcrisisthatchallengedsomelongstandingassumptionsaboutbquidityandinterestrateriskmanage*metinbanking.StructurallyhigherinterestratesputthebrakesondemandfortheAdvisoryandUnderwritingbusinessthatfueledindustryrevenuesandreturnsthroughthepandemic.Andnewcapitalrules,partlcuhrlytheBasel3EndgamerulesproposedbyUSregulators,havethepotentialtostructurallychangetheeconomicsofwholesalebankinganddriveactivityoutofthebankingsysteminanextremescenario.Wehavecreatedaframeworktoassesstheimpactofproposedchangestocapitalrulesontheeconomics(andpotentiallytheperimeter)ofwholesalebanking.Therangeofpotentialoutcomesiswide,givensignificantuncer>tantyoverthefinalrulesthatwillbeimplementedandthemitigatingactionsthatbankscantakeWeestimatethatrisk-weightedassets(RWA)requiredtosupporttheexistingUSwholesalebankingindustrywouldrise35%undertheproposednewUScapitalrules,whicharemoreconservativethanglobalstandardsbutsubjecttochangeCompetitionfrominternationalbanksandnon-banksisfierceand,intheunlikelyeventthattheproposedrulespassintheircurrentform,wecouldseeupto$40BN(73%)InrevenueexitUSbanksthroughvalueshiftsandcapacityreductions.Notallthenewsforbanksisbad.StructurallyhigherinterestrateswilldrivestrongerrevenuesandreturnsforbankswithsizeableTransactionBankingandSecuritiesServicesbusinesses.Inourbasecase,weprojectthatthesebusinesseswillhavegrown39%and14%respectivelybetween2O2O2O25torepresent29%oftheindustryrevenuepoolin2025vs.24%in2020.IftheUSImplementsamorepunitivecapitalregimethanreguhtorsoutsidetheUS1itwouldcreateopportunitiesforbanksintherestoftheworldtocaptureshareintheirhomemarkets,buildscaleInwholesalebanking,andclosethereturnsgapwithUSleadersMoreimportantly,structuralshiftsIntheoperatingenvironmentmayprovidethecatalystforWholesaleBankstomakelong-debatedChangestobusinessmodels,creatingastepchangeIneconomicperformance.Weexpectbankstorepriceandadaptthebusinessmodelinresponsetoproposedchangestothecapitalrules.WeestimatethatbusinessmodeladaptationscouldreducethedragonReturnonEquity(RoE)forUSWholesaleBanksfrom6ptsto23pts,eveninanun(ikely-butpotentialscenariowhereUScapitalrulesareimplementedasproposed.Inthemostlikelypotentialoutcome,theImpactwouldbelessthanthe55ptdragonRoEthewholesalebankingindustrye×peecedafterthefirstwaveofnewcapitalrulesfollowingtheGFCOneofthekeylessonsfromthepostGFCstructuralreformperiodisbanksthatmovedearlyandwithconvictionwerethebigwinnersinthedecadethatfollowed.Waitingonthesidelines,evenwithsignificantuncertaintyontheimpendingchanges,isastrategydestinedtofailWebelievethewinnerswill BuildresilienceIntotherevenuemodel-targetingnewareasofgrowthandstability Deepenanddefendtheclientfranchisetocapturethefullvalueofrelationships Adaptthebusinessmodeltopositionatthecenterofnewecosystemsanddeploylesscapital Pulltherightcostlevers-tailoredtothetargetbusinessmodelThecommentperiodfortheUSproposalstoimplementBasel3EndgameisopenuntilJanuary2024.ThereisstilluncertaintyoverwhethertheimplementationwillbestricterintheUSthaninotherjurisdictions.ThefinalUSrulescouldberecalibratedinawaythatreducestheimpactonWholesaleBanks,theirclients,andthemarketstheyserveandphase-lntimelinescouldbeextendedbeyond2025.Wholesalebankingbusinessescanadapttothenewrulesinwhateverformtheytake,butthestartingpointandstrategicpathforwardwillvarysignificantlyfrombanktobank.Strategicconvictionandexecutionwillmattermoreoverthenextfiveyearsthanithassincethefinancialcrisis.IWholesale助n"nthisre<lrelotheMartsSal&Trading),InvestmentBa*ng(Ee业y&U11crwll,CoTWaIE8TmsadronBanking,a<!SeCMMSStfwcesCu5iody&FUndSefVIC网businessesn!gk>haifinancialns!o(½MorganStanleyExecutiveSummaryCommentaryonsecuritiesthroughoutthisreportsolelyreflectstheviewsofMorganStanleyResearch,notOliverWyman.Note:'WholesaleBanking'isinterchangeablewith'Corporate8InvestmentBanking"(CIB).OurdefinitionIncludesMarkets(Macro,Credit,Equities),InvestmentBanking,SecuritiesService,TransactionBanking,andLendingtoWholesaleBankingclients.OurBluePaperfocusesontwostructuralshiftsintheoperatingenvironment.Arst,theendofessmonetarypolicyandfiscalstimulussuper-cyclewillexertpressureontheeconomicsoftheglobalbankingsystem,3phenomenonthatisalreadyunderway.However,giventhelightcapitalmarketsactivityin2023,weexpectamodestIncreaseinwholesalebankindustryRoEsbetween2023and2025asareboundinIBDactivityandgrowthinTransactionBankingandSecuritiesServicesispartiallyoffsetbyasmallerFICCandEquitiestradingwallet.Second,anewlargebankcapitalregimeproposedbyUSregulators,commonlyreferredtoasBasel3EndgameorBaselIV,loomsaspotentiallythemostsignificantregulatoryoverhaulsincetheGlobalAnancialCrisis.ThecombinationandinteractionofthesetwoshiftscoulddrivemajorImplicationsforthefinancialsystemandcreditavailability.Ifthecapitalrulesarefinalizedascurrentlywritten,whicharemuchstricterthanglobalstandards,theycouldpressurebusinessmodelsandcatalyzeshareshiftsfromUSBankstoNon-USBanksandNon-B