(Reuters) - Morgan Stanley's adjusted quarterly earnings fell short of market expectations as unexpected market swings in December hit its division that trades bonds, currencies and commodities and the bank deferred fewer bonus payments.
The bank's shares fell almost 3 percent to $33.89 in premarket trading on Tuesday.
Choppy markets caused by factors ranging from plunging oil prices to political upheaval in Greece, sent investors scurrying last month, slashing the trading revenue of U.S. banks including Morgan Stanley arch rival Goldman Sachs Group Inc.
Excluding a range of special items, Morgan Stanley's revenue from trading fixed-income securities, currencies and commodities (FICC) fell 13.7 percent to $599 million. On another adjusted measure, the bank's FICC revenue fell 81 percent.
Revenue from the bank's increasingly important wealth management business rose 2.4 percent to $3.80 billion as equity markets boomed.
Overall, earnings attributable to common shareholders rose to $920 million, or 47 cents per share, in the fourth quarter from $36 million, or 2 cents per share, a year earlier.
Legal expenses fell to $284 million from $1.4 billion.
Compensation expense rose to $5.1 billion from $4.0 billion.