In equities trading, headed by Ted Pick, Morgan Stanley’s revenue rose 7 percent from a year earlier to $1.5 billion, excluding DVA. That compared with $904 million at Bank of America Corp. and $1.73 billion at Goldman Sachs Group Inc. UBS AG’s Brennan Hawken had estimated equities revenue of about $1.58 billion, while Wells Fargo & Co.’s Matt Burnell predicted $1.43 billion.

Morgan Stanley topped all global investment banks in equity-trading revenue in the third quarter. The firm is now seeing an “acute” battle for equity traders, Colm Kelleher, head of the investment bank and trading division, said last month.

Fourth-quarter revenue from fixed-income sales and trading, run by Michael Heaney and Robert Rooney with commodity trading co-heads Colin Bryce and Simon Greenshields, fell 14 percent to $694 million, excluding DVA. That compared with estimates of $919 million from Wells Fargo’s Burnell and $800 million from UBS’s Hawken.

Interest-Rates Trading

Porat said the firm suffered from weak interest-rates trading revenue. Fixed-income revenue was $1.89 billion at Goldman Sachs and $2.33 billion at Citigroup.

Morgan Stanley’s head of interest-rates trading, Glenn Hadden, left earlier this month after two years with the firm. He said he had different views over how the business should be run than Heaney and Rooney, who took over leadership of the fixed-income division last year. Mitch Nadel and Jakob Horder were named to replace Hadden.

Morgan Stanley had its lowest share of fixed-income revenue among U.S. peers in at least four years. While the firm’s credit, securitized products and currency units reached their 10 percent return-on-equity goals, low returns in the commodity and interest-rates groups dragged down ROE. Morgan Stanley reiterated its goal of reaching 10 percent ROE firmwide.

“Given the continued weak performance of FICC, we remain skeptical that Morgan Stanley will achieve even this relatively low financial target,” Richard Staite, an analyst at Atlantic Equities LLP in London, said in a note to clients.

Fixed Income

Morgan Stanley exited some units within its fixed-income and commodities division and shrank capital dedicated to that segment. It had $210 billion of risk-weighted assets tied to the division at the end of December. The bank moved up its target for driving that number below $180 billion by one year, to 2015.