Morgan Stanley's (NYSE:MS) decision to focus on wealth and investment management appears to be paying off. This morning, the investment bank reported (link opens pdf) third-quarter net revenues of $7.9 billion compared with $5.3 billion in the year-ago period. Excluding noncash accounting charges, it earned $0.50 per diluted share versus $0.28 last year.

"Our results point to the increased consistency, strength and balance we are deriving from our business model," Chairman and CEO James P. Gorman said in a Morgan Stanley press release. "Our strategy to combine a world class investment bank with the stability of the largest U.S. wealth management franchise and strong investment management is enabling us to deliver exceptional advice and execution for our clients as well as stronger returns for our shareholders."

One trend to emerge over the last two weeks as the nation's largest banks have reported third-quarter results, has been a precipitous drop in revenue from fixed-income trading. The top line at Goldman Sachs fell by a staggering 20% thanks to low trading volumes, and both JPMorgan Chase and Citigroup fared similarly.

For its part, Morgan Stanley reported that revenue from fixed-income trading dropped by 44% on a year-over-year basis due to "lower client activity and market volumes across all products."

Unlike many of its peers, however, Morgan Stanley's other business lines more than made up the difference. Both its wealth and investment management divisions saw income climb, and the investment bank benefited from large gains related to the disposition of investments in an insurance broker, as well as its Japanese joint venture, Mitsubishi UFJ Morgan Stanley Securities.

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