Morgan Stanley:Record commods earnings, lower risk

NEW YORK, Dec 17 (Reuters) - Morgan Stanley (MS.N), which reported a wider-than-expected quarterly loss on Wednesday, said earnings from commodities hit all-time highs during the year despite reduced exposure to the asset class.

Morgan Stanley did not give a breakdown of its commodities earnings. But it said sales of fixed income, commodities and currencies (FICC) led to a net $3.9 billion revenue for the year ended Nov. 30, helped by "record revenues in commodities and foreign exchange."

For the fourth quarter itself, Morgan Stanley said FICC trades saw net losses of $1.2 billion, lower than the net loss of $7.9 billion in the fourth quarter ended Nov. 30, 2007.

Here too, it said, commodities played a positive role.

"Commodities revenues increased substantially from a year ago, primarily reflecting higher market volatility and strong customer flow," Morgan Stanley said, elaborating on the fourth quarter performance.

The bank said its Value-at-Risk -- or the maximum it could lose in a trading day -- for commodities fell to $27 million in the fourth quarter from $35 million a year ago.

Once Wall Street's No.2 investment bank before becoming a bank holding company during the credit crisis, Morgan Stanley reported a net loss of $2.20 billion, or $2.24 a share, for the fourth quarter. [ID:nN17282690]

Analysts' average forecast was a loss of just 33 cents a share, according to Reuters Estimates. (Reporting by Barani Krishnan; editing by Jim Marshall)