Wall Street investment bank Morgan Stanley today reported a much stronger than expected rise in quarterly profit, boosted by higher revenue from trading bonds and equities.
Net income rose to $2.31 billion, or $1.18 per share, in the first quarter ended March 31, from $1.45 billion, or 74 cents per share, a year earlier.
Excluding special items, the bank said it earned $1.14 per share.
Analysts had expected per-share earnings of 78 cents.
Adjusted revenue from equities sales and trading rose 33% to $2.27 billion, meaning that Morgan Stanley lost its lead in the business over Goldman Sachs Group, which reported revenue of $2.32 billion for the quarter.
Global stocks have generally performed strongly since the start of the year, with several indexes at or close to record highs as a number of central banks have eased monetary policy.
Revenue in the bank's wealth management business rose 6.2% to $3.83 billion, accounting for 39% of total revenue.
Excluding special items, revenue from trading fixed-income securities, currencies and commodities (FICC) rose 15% in to $1.90 billion.
Morgan Stanley, the last big US bank to report for the first quarter, is focusing less on bond markets and more on managing money for the rich as a way to free up capital and comply with stricter regulatory requirements since the financial crisis.
The wealth unit's contribution to revenue jumped to nearly 45% last year from less than 20% in 2006. In the same period, FICC revenue fell to about 12% of overall revenue from more than a third.
The bank's FICC business, like those of its rivals, got a boost in the quarter after the Swiss central bank scrapped a cap on the franc, the European Central Bank announced its quantitative easing programme and the US Federal Reserve moved to tighten monetary policy.
"This was our strongest quarter in many years with improved performance across most areas of the firm," the bank's chief executive James Gorman said.
