Morgan Stanley is on track to resume stock buybacks and raise its dividend in 2021, CEO says

• Morgan Stanley CEO James Gorman sees the bank resuming stock buybacks and boosting its dividend as early as next year.
• The bank reported record quarterly earnings Thursday morning of $1.96 per share, beating analysts' $1.12 per-share estimate.
• Morgan Stanley now holds between $6 billion and $10 billion in "excess capital," Gorman said on CNBC, adding "we should also increase our dividend and we should be back on the buyback trail."
• The bank will need to pass Federal Reserve stress tests first before it can raise its dividend.
• Watch Morgan Stanley trade live here.

Morgan Stanley is hot off a massive earnings beat, and its CEO is already planning to boost shareholder benefits as early as 2021.

The bank reported record profits of $1.96 per share in the second quarter, handily beating the analyst estimate of $1.12 as trading desk revenue soared. Morgan Stanley now holds between $6 billion and $10 billion in "excess capital," CEO James Gorman said on CNBC, and it needs "to do something with it."

Though much of the capital is set aside for internal investments, "we should also increase our dividend and we should be back on the buyback trail," Gorman said on Thursday.

He continued: "In 2021, Morgan Stanley should do something with this capital for the benefit of our shareholders and our clients."

Read more: The ultimate guide to getting started in real-estate investing — according to entrepreneurs who built multimillion-dollar empires from scratch

Morgan Stanley shares traded as much as 4.2% higher on the earnings beat and Gorman's comments.

Taking such actions isn't entirely up to the bank or its CEO. The Federal Reserve halted dividend increases across several banks to maintain emergency reserves during the coronavirus pandemic. The financial sector also froze buybacks to boost reserves. Central bank examinations will ultimately decide when banks can resume buybacks and raise dividends.

Gorman acknowledged the hurdle and expressed a fairly optimistic forecast of the nation's economic recovery.

"Let's get through the new stress test in September, let's see how the economy performs in the next three to six months," he said.

Morgan Stanley shares traded at $52.53 each as of 12:35 p.m. ET Thursday, up 3% year-to-date.

Now read more markets coverage from Markets Insider and Business Insider:

Dell leaps 17% after confirming potential spin-off of software firm VMware, Bank of America raises price target

'Netflix has extended its lead': Here's what 3 analysts expect from the streaming giant's quarterly earnings

Morgan Stanley's wealth-management chief warns investors are misreading the biggest risks to markets right now — and shares 4 ways to maximize returns as earnings roll in