The FINANCIAL -- Morgan Stanley's first-quarter profit rose as the bank, like its peers, benefited from a stronger environment for deals and trading.
Results beat Wall Street estimates, pushing share up 2.5% to $37.65 premarket, according to Nasdaq.
The New York-based bank posted a first-quarter profit of $2.39 billion, compared with $1.51 billion in the same period of 2014. On a per-share basis, Morgan Stanley's profit was 85 cents when stripping out accounting adjustments. Analysts polled by Thomson Reuters had expected earnings of 78 cents a share.
Revenue rose to $9.91 billion, or $9.78 billion excluding accounting adjustments. Analysts had projected $9.17 billion.
"This was our strongest quarter in many years with improved performance across most areas of the firm," Chief Executive James Gorman said in a news release.
Mr. Gorman has sought to reorient the bank away from unpredictable businesses such as bond trading to more consistent ones like wealth management. He appeared to achieve success in 2014, though it was offset somewhat by a $2.6 billion settlement announced in February that resolved a U.S. Department of Justice investigation into mortgage bonds it sold in the run-up to the financial crisis.
The bank is also in discussions with New York's attorney general over a potential $500 million settlement over similar mortgage-related issues, The Wall Street Journal reported on April 19.
Trading revenue was $4.08 billion in the quarter, up 26% from $3.24 billion in the same period a year ago. At rival Goldman Sachs Group Inc., first-quarter trading revenue rose 23%.
Revenue from investment banking totaled $1.17 billion in the first quarter, a 3.3% increase from $1.14 billion in the first quarter of 2014. Fees from advising on deals were $471 million compared with $336 million a year ago.
Morgan Stanley's firm-wide expenses rose to $7.05 billion from $6.62 billion in the first quarter last year. Compensation and benefits expense were $4.52 billion, up 5.1% from $4.31 billion a year ago.
Return on equity, a commonly used measure of bank profitability, rose to 13.5% from 8.5% in the first quarter a year ago, excluding an accounting adjustment. Morgan Stanley executives have pledged to lift return on equity above 10%.
Shares of Morgan Stanley have fallen 5.3% since the start of 2015 compared with a 2.1% fall in the KBW index of bank stocks over the same period.