Morgan Stanley shares have climbed after the US bank posted better-than-expected results in its fixed income trading and wealth management divisions.

The bank reported $2.43bn profit in the first quarter of the year, beating expectations despite falling from $2.67bn the previous year.

Read more: Morgan Stanley trading revenue hit by sharper fall than peers

Fixed income revenue of $1.71bn – nine per cent down on the same period in 2018 – beat analysts’ estimates by $200m, driven by gains in credit risk management, the bank said.

Its wealth management division, which accounts for around half of the bank’s annual revenue, saw revenues rise slightly to $4.39bn.

Investors were buoyed by the results as shares jumped 2.5 per cent to seven-month highs.

Investment banking revenue fell 24 per cent to $1.15bn on lower advisory fees from M&A and stock underwriting.

In the fourth quarter of last year Morgan Stanley’s fixed income trading suffered the sharpest fall among its peers, with revenue dropping 30 per cent year-on-year to $564m.

But in the first three months of this year its bond trading revenue suffered a smaller drop than rival Goldman Sachs, which fell 11 per cent.

Total revenue of $10.3bn also beat analysts’ expectations of $9.94bn but was seven per cent down on record quarterly results a year ago.

Chief executive James Gorman said: “We delivered solid earnings despite a slow start to the year following the turbulent markets in the fourth quarter.”

He added: “Even though risks to the global environment remain, markets have recovered and we are well positioned to serve our clients and invest in our businesses.”

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Evercore ISI analyst Glenn Schorr said: “Wealth management was able to protect the margin in a tougher backdrop.”

He added that the performance “should make people more optimistic considering the lift in markets and better underwriting environment lately."

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