Morgan Stanley (NYSE:MS), the second-largest U.S. investment bank, is considering asking the Federal Reserve for approval to extend its share buyback plan, the Wall Street Journal said Tuesday.

Seeking improved return on equity, the James Gorman-led bank is considering building on the shares it had bought in early 2013 as part of a $500 million buyback plan approved earlier this year.

The New York-based bank may ask regulators for a bigger buyback plan after its purchase of Citigroup Inc.'s (NYSE:C) brokerage business bolstered its case for a larger share buyback plan. By the end of September, Morgan Stanley had spent $123 million of the $500 million it was authorized to spend on the buyback. The existing plan ends in March.

Morgan Stanley has improved its share price by 52 percent in 2013 and has produced good earnings in recent quarters, but its return on equity is far below many of its peers. Before a decision can be reached on widening the buyback program, regulators must conduct stress tests on the bank's balance sheet.