Morgan Stanley's third-quarter profit surged 32%, fueled by a rebound in dealmaking that had also buoyed its rivals, sending its shares up 7% in Wednesday trading.
The investment bank posted a profit of $3.19 billion on Wednesday, or $1.88 per share, for the three months ended Sept. 30. That compares with $2.41 billion, or $1.38 per share, a year earlier.
A revival in corporate debt issuance, initial public offerings and mergers have bolstered profits for investment banks this year.
As markets hover near record highs and the U.S. Federal Reserve begins its policy-easing cycle, bankers expressed optimism that M&A activity will continue to recover after a two-year drought.
"The firm reported a strong third quarter in a constructive environment across our global footprint," CEO Ted Pick said in a statement.
Morgan Stanley's investment banking revenue jumped 56% in the third quarter. Its competitors Goldman Sachs posted a 20% surge in fees, while JPMorgan Chase saw a 31% gain.
The bank reported a profit of $3.19 billion, or $1.88 per share, for the three months ended Sept. 30. That compares with $2.41 billion, or $1.38 per share, a year ago.
Across the industry, global investment banking revenue rose 21% in the first nine months of the year, led by a 31% surge in North America, according to data from Dealogic.
Morgan Stanley earned the fourth highest fees globally over the same period, the data showed.
It was a lead underwriter on major initial public offerings in the quarter, including by cold storage giant Lineage and airplane engine maintenance services provider StandardAero.
Wealth management revenue - a key area of focus for Morgan Stanley - came in at $7.27 billion, compared with $6.40 billion, a year ago.
Under former CEO James Gorman, Morgan Stanley expanded into wealth management as a way to diversify the business and generate more stable revenue than trading and investment banking, which can be volatile.
Its institutional securities business, which houses investment banking and trading, reported revenue of $6.82 billion, compared with $5.67 billion a year earlier.