The Wall Street Journal reported that Morgan Stanley would be widening its USD500 million stock buyback program. Already cleared early this year, the global financial services firm intended to seek another approval from the US Federal Reserve to increase the size of the stock buyback. The Journal cited three people who were familiar with the matter.
Large and complex banks are required to secure approval from the Fed to pay dividends to its shareholders or conduct a share buyback. Morgan Stanley reportedly was undecided on the schedule of securing regulatory approval next year. The firm itself was also unsure of whether an increase in the existing stock repurchase program would happen, said the Journal.
The Journal said Morgan Stanley's change in its buyback program was probably attibuted to increase its return on equity. The firm recently purchased Citigroup Inc's brokerage business. Morgan Stanley also recorded better profits in its recent earnings report.
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