Morgan Stanley's adjusted quarterly earnings fell short of market estimates as unexpected market swings in December hit its division that trades bonds, currencies andcommodities and the Wall Street bank deferred fewer bonus payments.

Choppy markets caused by factors ranging from plunging oil prices to political upheaval in Greece, sent investors scurrying last month, slashing the trading revenue of U.S. banks includingMorgan Stanley arch rival Goldman Sachs Group Inc.

Morgan Stanley had a "very challenging" fourth quarter incommodities because of the decline in oil prices, Chief Financial Officer Ruth Porat told Reuters on Tuesday.

Excluding a range of special items, Morgan Stanley's revenue from trading fixed-income securities, currencies and commodities (FICC) fell 13.7 percent to $599 million.

Like several other big banks, Morgan Stanley has been shrinking its presence in the bond market as tougher capital requirements against risky trading take hold, and the bank has said it is now more focused on returns than revenue.

But the bank, whose shares fell 2.3 percent in premarket trading, said its adjusted average return-on-equity fell to 4.5 percent in the quarter. This was below both the 10 percent minimum Chief Executive James Gorman wants and the 8.9 percent return achieved in the third-quarter.

Revenue from the bank's increasingly important wealth management business rose 2.4 percent to $3.80 billion as equity markets boomed.

The business's pretax profit margin of 19 percent including adjustments was below the 20 percent Chief Executive James Gorman has set as a minimum, however. The business achieved a profit margin of 22 percent in the third quarter.

Advisory revenue increased 8.2 percent to $488 million.

Morgan Stanley led initial public offerings in 2014, earning $731 million in fees and taking a market share of 8.47 percent, according to Thomson Reuters data.

Last year was the busiest period for stock offerings since 2007.

The bank's compensation expenses rose to $5.1 billion from $4.0 billion, while legal expenses fell to $284 million from $1.4 billion.

Overall, earnings attributable to common shareholders rose to $920 million, or 47 cents per share, from $36 million, or 2 cents per share, a year earlier.

Adjusted earnings of 39 cents per share, as calculated by Thomson Reuters I/B/E/S, missed the average analyst estimate of 48 cents.