Morgan Stanley quarterly profit tanks; adjusted profit beats view

(Reuters) - Morgan Stanley's quarterly profit dropped almost 60 percent on a provision related to the new U.S. tax law, but adjusted profit beat analyst expectations as strength in wealth management helped offset a drop in trading revenue.

Charges taken for the tax overhaul have crimped fourth quarter results for most big banks. Morgan Stanley recorded a one-time $1.2 billion tax provision, the smallest among the banks.

Shares of the sixth-largest U.S. bank on Thursday rose 1.3 percent to $55.35 in pre-market trade.

Investment banking revenue rose 12.4 percent to $1.55 billion, while wealth management rose 10.5 percent.

Trading revenue, which is traditionally Morgan Stanley's biggest source of income, fell 19.5 percent to $2.25 billion.

Goldman Sachs' fourth-quarter earnings were hit by a big drop in fixed income, currency and commodity revenue.

Net income for Morgan Stanley fell to $686 million or 29 cents per share in the fourth quarter ended Dec. 31, from $1.67 billion or 81 cents per share, last year.

Excluding the one-off charge and other items, Morgan Stanley's adjusted profit was $1.68 billion, or 84 cents per share.

Analysts on average were looking for 77 cents per share, according to Thomson Reuters I/B/E/S.

Total revenue rose to $9.50 billion from $9.02 billion. Analysts were looking for $9.20 billion.

(Reporting By Aparajita Saxena in Bengaluru; Editing by Bernard Orr)