Morgan Stanley reported a 55 percent jump in first-quarter earnings as higher revenue from the bank's institutional securities business augmented another strong quarter from wealth management.
Morgan Stanley's shares rose 2.7 percent to $30.70 in pre-market trading on Thursday. (Click here for the latest quote.)
The sixth-largest U.S. bank by assets reported net income applicable to the company of $1.45 billion, or 74 cents per share, compared with $936 million, or 48 cents per share, a year earlier.
Morgan Stanley also said it would buy back up to another $1 billion of shares and double its dividend this year.
Although volumes were lower across most fixed-income businesses, revenue from Morgan Stanley's fixed income and commodities sales and trading rose 13 percent to $1.7 billion.
This reflected strong performance in commodities and solid results in credit and securitized products, the bank said. Morgan has rebounded strongly since the dark days of the 2008 global crisis, when the turmoil brought the Wall Street titan to the brink of collapse.
In an interview on CNBC, CEO James Gorman said the bank planned to return a large amount of its recent bounty to shareholders. Investors "have been very patient. It's our turn to reward shareholders," Gorman added.
Morgan Stanley's decision to dive deeper into the wealth-management business has also helped to shield it from the decline in fixed-income trading revenue that has been happening across Wall Street for the past five years.
The bank said its wealth management division's pre-tax profit margin was 19 percent in the quarter ended March 31, up from 17 percent in the same quarter a year earlier. Wealth management revenue rose 4 percent to $3.62 billion and the division's earnings were up 65 percent to $423 million.
"Inside our wealth management business sits the tenth largest bank in the United States by deposits," Gorman said to CNBC. Lauding the bank's outperformance while touting the overall lowering of its risk profile, Gorman said that business segment would be "a very important part of the firm's story."
Morgan Stanley reduced its fixed-income risk-weighted assets by 5 percent in the first quarter, Chief Financial Officer Ruth Porat said.
The Wall Street bank had $199 billion of those assets according to Basel 3 capital measurements as of March 31, down from $210 billion in the prior quarter, Porat said in an interview.
Morgan Stanley is working toward a goal of having less than $180 billion of risk-weighted fixed-income assets by 2015 in order to free up capital.
—By Reuters. CNBC contributed to this report.