Morgan Stanley shrinks risky fixed-income assets

Morgan Stanley's risk-weighted assets related to fixed-income trading fell by 2.7 percent last quarter, Chief Financial Officer Ruth Porat said on Friday.

The Wall Street bank and brokerage firm had $213 billion in fixed-income risk-weighted assets at September 30, down from $219 billion at June 30, Porat said in an interview.

Those figures do not include $20 billion worth of loans. Morgan Stanley is working to shrink some fixed-income trading assets while growing its book of loans, particularly to wealth-management clients. Morgan Stanley had earlier set a target of less than $200 billion worth of fixed-income risk-weighted assets, including the loans, by 2016, as part of a years-long effort to boost shareholder returns.

For the third quarter, the bank reported an adjusted return on common equity of 6.2 percent.

(Reporting by Lauren Tara LaCapra; Editing by Gerald E. McCormick)