Morgan Stanley (MS) posted better-than-expected results for the first quarter on Wednesday, supported by a strong performance in its investment banking and trading businesses.
The company saw the biggest increase in bond-trading revenue to push return on equity to its highest level in two years.
Shares of Morgan Stanley increased by 2% in premarket trade.
Earnings per share came in at $1, beating analyst estimates of 88 cents per share. The company posted $9.7 billion in revenue, also beating expectations of $9.266 billion.
Morgan Stanley’s global wealth management business brought in $4.1 billion, surpassing forecasts of $4.09 billion in revenue.
The institutional securities unit, which includes equities trading and fixed income, generated $5.15 billion in revenue to mark a 39.2% increase year-over-year.
Individually, the fixed income unit brought in $1.7 billion in revenue and equities trading generated $2 billion in revenue. Both figures beat analyst estimates.
Compensation increased by 21% to $4.47 billion, which missed estimates of $4.2 billion.
“We reported one of our strongest quarters in recent years. All our businesses performed well in improved market conditions,” said CEO James Gorman. “We are confident in our business model and the opportunities ahead, while recognizing that the environment remains uncertain.”
Morgan Stanley’s impressive quarter comes after Goldman Sachs (GS) posted a surprise miss on Tuesday. The investment bank said its fixed-income trading was hurt by weak demand in currencies, commodities and credit.
Goldman Sachs posted $1.69 billion in revenue, missing estimates of $2.03 billion.
Morgan Stanley’s net income increased by 80% to $1.93 billion, or $1 per share. The company posted $1.13 billion in revenue, or 55 cents per share, in the same period last year.
Return on equity climbed 10.7% from 8.7% last quarter and 6.2% the previous year. Analysts were expecting 9.75%. Gorman is targeting 9% to 11% for fiscal 2017.