Jan 15 (Reuters) - Morgan Stanley profit rose as its investment bankers reaped a windfall from deals in the fourth quarter.

Morgan Stanley shares rose 1.6% in premarket.

A flurry of large transactions pushed global mergers and acquisitions past $5.1 trillion last year as exuberance over AI and rate cuts by the Federal Reserve encouraged CEOs to pursue buyouts.

Equity markets surged to record highs late last year despite volatility in the first half from U.S. President Donald Trump's tariff policies.

Morgan Stanley's investment banking revenue rose to $2.41 billion in the quarter, compared with $1.64 billion a year earlier.

The earnings mirror those of rivals across Wall Street including Citigroup C.N, which benefited from a surge in M&As and initial public offerings (IPOs).

The bank posted a profit of $4.40 billion, or $2.68 per share, for the three months ended December 31, it said on Thursday. That compares with $3.71 billion, or $2.22 per share, a year earlier.