Morgan Stanley's big push into wealth management seems to be paying off.
The New York investment bank, which has been cutting costs as it has struggled to boost earnings, returned to profitability in the fourth quarter.
Morgan Stanley reported $507 million in profit, compared to a loss of $250 million the same period in 2011. Profits from its wealth management and institutional securities divisions surged.
Morgan Stanley's profit beat Wall Street estimates, and its stock surged in pre-market trading on Wall Street. Its shares added $1.37, or 7%, to $22.12 before the opening bell Friday, following a 1% gain the previous day.