NEW YORK/BENGALURU - Morgan Stanley’s profit rose in the first quarter, lifted by a resurgence in investment banking led by equity underwriting where revenue more than doubled.

The Wall Street bank on April 16 reported net income of US$3.4 billion (S$4.64 billion), or US$2.02 per diluted share, in the three months ended March 31. That compares with US$3 billion, or US$1.70 per share, a year earlier.

“As a result of strong net new asset growth, the firm has reached US$7 trillion of client assets across wealth and investment management,” said CEO Ted Pick in a statement.

“Institutional Securities also saw strength across the markets and underwriting businesses.”

Shares of the investment bank rose 2.6 per cent before the bell. They have lost nearly 7 per cent so far this year and underperformed the benchmark S&P 500 index.

Investment banking activity has rebounded from a two-year dealmaking drought as large corporates issued near-record levels of debt and equity capital markets became more active.

Investment banking revenue climbed 16 per cent in the quarter from a year ago. Fixed-income underwriting remained a bright spot for a second quarter in row, driven by higher bond issuance.

Though advisory revenue decreased nearly 28 per cent in the first quarter, equity underwriting surged nearly 113 per cent to US$430 million.

At rival Goldman Sachs, profit jumped 28 per cent as investment banking bounced back and trading revenue surged, it reported on April 15.

Investment banking results also improved at JPMorgan Chase and Citigroup, fuelled by debt and equity capital markets.

The quarter was Morgan Stanley’s first with Mr Pick at the helm.

Morgan Stanley’s total revenue increased to US$15.14 billion in the first quarter, compared with US$14.5 billion, a year earlier.

Total revenue for the broader institutional securities division housing investment banking, equities and fixed income came in at US$7 billion, compared with US$6.8 billion a year earlier. Fixed income trading revenue slid 4 per cent, while equities increased 4 per cent.

Wealth management revenue was up US$6.9 billion, from US$6.6 billion a year earlier.

Morgan Stanley has built its wealth business into a powerhouse that generates more stable revenue and helps smooth out revenue from more volatile businesses such as trading and investment banking.

But as the competition for market share in wealth management increases, markets are focused on whether Morgan Stanley can grow assets.

The unit is also facing higher regulatory scrutiny, with multiple US regulators probing whether Morgan Stanley is vetting its clients and knows the origin of their wealth. The Wall Street Journal reported the probes earlier in April.

Investment management revenue of US$1.4 billion were higher than US$1.3 billion posted in 2023.

The bank’s asset management unit is aiming to double its private credit portfolio to US$50 billion in the medium term, Reuters reported in January, as it gathers funds from large investors to loan out to companies. REUTERS