Morgan Stanley today reported an 87% rise in third-quarter earnings as the Wall Street bank's trading and wealth management businesses benefited from increased client activity.
Net income rose to $1.65 billion, or 84 cents per share, in the three months to the end of September from $880m, or 45 cents per share, the same time last year.
Analysts on average had expected earnings of 54 cents per share, according to Thomson Reuters.
The stable fee income Morgan Stanley receives for advising individuals on their finances is becoming more important to the bank as it reduces its exposure to the volatile trading business and is required to comply with tighter capital regulations.
But it was a surge in revenue from the trading of bonds, currencies and commodities that was mainly responsible for the surge in earnings and revenue in the latest quarter.
Bond trading revenue, excluding accounting adjustments, rose 19.4% to $997m after a sudden increase in market volatility last month that also boosted its Wall Street rivals.
Wealth management revenue rose 9% to $3.79 billion. The wealth management business generated 42.5% of total revenue in the quarter, while the bank's traditional trading and investment banking business accounted for 50.7%.
After a long period of sluggish activity, the bond market was jolted to life in September by upbeat US economic data, stimulus steps taken in Europe, and the shock exit of trading superstar Bill Gross from bond trading giant Pimco.
The growth achieved by Morgan Stanley paled against that of close rival Goldman Sachs Group, however.
Goldman this week reported a 53% jump in revenue, excluding accounting adjustments, from trading bonds, currencies and commodities.
Like several other big banks, Morgan Stanley has been shrinking its bond trading business, giving Goldman an opportunity to take market share.
"We are well positioned to create superior returns for our shareholders, particularly as the US economy continues to strengthen," chief executive and Chairman James Gorman said in a statement.
Total revenues for the three month period rose 12% to $8.91 billion.
