Morgan Stanley paid $950 million to buy back warrants issued to the federal government as part of its capital infusion to banks.

The investment bank received $10 billion from the federal government in exchange for preferred stock and warrants on common stock. Morgan Stanley was among 10 companies allowed in June to pay back a combined $68 billion.

Combined with dividends paid on the preferred stock, the company generated a 20% annual return for the government, said John Mack, the company's chairman and chief executive.

Separately, Morgan Stanley said it does not comment on "succession speculation," a spokeswoman said Thursday following a CNBC report that its co-president, James Gorman, will likely succeed Mack as CEO by the end of this year.

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