By Philip Scipio

NEW YORK, June 14 (IFR) - Morgan Stanley still expects to wring about US$4bn a year in revenue from fixed income currency and commodity trading, despite heavy cuts to its FICC group.

The announcement of the target Tuesday by Chief Executive James Gorman comes six months after the bank slashed its FICC group by 25% - the steepest such cut on Wall Street.

That goal may be tough to pull off this year.

Morgan Stanley has pulled in more than US$4bn from FICC in each of the last three years - but each time much of the revenue came in the first quarter.

Last year 44% of the bank's US$4.3bn FICC haul came in Q1; in 2014 that figure was 39%.

But in 2016, the bank saw FICC revenue fall 54% to US$873m compared to Q1 of 2015.

Gorman, speaking at the bank's US financials conference, declined to give a preview of how the second quarter was going.

But he did say that the weakness in the first quarter had begun to dissipate by the end of February.

Some analysts are expecting second-quarter trading results to be stronger than normal.

Maintaining the level of FICC revenue suggests traders at the bank have been tasked to do more with less.

But Gorman said the bank had simply been overstaffed for the opportunities in the current environment. The total pie industry-wide for FICC has shrunk by half, he said.

Earlier this year Morgan Stanley tapped Sam Kellie-Smith to run the FICC group. He was the first major appointment of Ted Pick, who was given consolidated control of FICC and equity trading groups last October.

(Reporting by Philip Scipio; Editing by Marc Carnegie)