Morgan Stanley to seek share buyback approval: Report

Tuesday, 29 Oct 2013 | 6:37 AM ET
Adam Jeffery | CNBC

Morgan Stanley plans to seek the U.S. Federal Reserve approval to widen the $500 million share buyback program cleared earlier this year, the Wall Street Journal reported, citing people familiar with the matter.

Better profits and completion of its purchase of the brokerage business of Citigroup have helped Morgan Stanley bolster its case to push for a larger buyback program next year, a move aimed at boosting its return on equity, the paper said.

Large and complex banks must seek the Fed's approval to buy back their stock or pay a dividend to shareholders.

(Read more: 'Start acting as leaders' and fix things: Morgan Stanley)

Morgan Stanley has not yet decided on what it will ask for in 2014 or if the figure will exceed the existing share repurchase program, according to the paper.

50% chance of taper in March: Morgan Stanley
Viktor Hjort, Head of Fixed Income Research at Morgan Stanley says investors should be bullish on longer dated fixed income with tapering expectations now postponed until 2014.

By the end of September, Morgan Stanley had spent $123 million of the $500 million it was authorized to buy back. This existing plan ends in March, the report said.

The company's fresh buyback plans may become clearer as soon as this week, when the regulator gives banks details on how to conduct "stress tests" on their balance sheets, the Journal said.

(Read more: Morgan Stanley earnings, revenue top expectations)

Morgan Stanley could not be reached immediately for comments by Reuters outside of regular U.S. business hours.

By Reuters

  Price   Change %Change


  • Discussing loan growth in financials and the drag of litigation on Bank of America's earnings, with Gerard Cassidy, RBC Capital Markets lead banking analyst.

  • Ken Moelis, Moelis & Company founder and CEO, discusses the public debut of his company on the NYSE and explains his boutique investment banking model. "Clients will want the flexibility of an independent, unconflicted advisor," Moelis says.

  • Discussing how to buy in volatile market conditions and the investment banking market, David Katz, Matrix Asset Advisors CIO, and Charles Bobrinskoy, Ariel Investments vice chairman & portfolio manager.