Morgan Stanley has a brutal assessment of the business it is cutting

Morgan Stanley just announced fourth quarter earnings, and for the first time set out a bit more detail around its decision to cut back the fixed income business late last year.

To recap, the bank just cut 25% of its workforce in that department, replaced its leadership and cut bonuses. In a presentation released this morning, the bank provided an update on its progress against goals set in early 2015. The updates were broadly positive, except for one.

"Progress in Fixed Income and Commodities ROE: Failed to meet objective: Initiated major restructuring."

The bank said that it exceeded its target of having less than $180 billion in risk-weighted assets tied up in the the fixed income and commodities business by year end, and has now set a new target of having less than $110 billion.

The fixed income businesses woes are in contrast to other parts of the bank. Morgan Stanley reported results that topped expectations thanks in part to strong performance in equities trading and investment banking.

As part of the same presentation, the bank published a slide showing how its business mix has changed over the past six years. Fixed income revenues make up a much smaller chunk of firm-wide revenues now than they did.

CEO James Gorman will be talking at 10am ET, so there will likely be more detail then.

In the meantime, here is the slide on the action plan for the fixed income business.

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