Morgan Stanley reported record net revenues and net income in Q1 2021, beating estimates, with growth across all its business lines mainly investment banking.

The New York-based investment bank registered net income of $4.12bn, or $2.19 a share, compared to $1.7bn, or $1.01 a share, in the prior year.

The bank’s revenue soared 61% to $15.72bn from $9.78bn over the period.

However, the strong performance was overshadowed by its disclosure of a $911m loss linked to its exposure to collapsed hedge fund Archegos Capital Management.

“The current quarter includes a loss of $644 million related to a credit event for a single prime brokerage client, and $267 million of subsequent trading losses through the end of the quarter related to the same event,” Morgan Stanley stated.

Key drivers

Revenues at Morgan Stanley’s institutional securities unit – that includes its investment banking as well as trading businesses – grew to $8.6bn from $5.18bn.

Investment Banking was the key growth driver, aided by equity underwriting, fixed income underwriting and advisory revenues. Revenues in Investment Banking jumped 128% year-on-year to $2.61bn.

Fixed income trading desks contributed $2.97bn to revenue, while equity trading generated $2.88bn in Q1 2021. The year-ago comparable figures are $2.06bn and $2.45bn, respectively.

In Wealth Management, quarterly net revenues were $5.96bn versus $4.1bn in the previous year.

Investment Management revenues also surged growing to $1.31bn from $692m.

Morgan Stanley chairman and CEO James Gorman said: “The integrated Investment Bank continues to thrive. We closed the acquisition of Eaton Vance which takes Investment Management to over $1.4 trillion of assets.

“Wealth Management brought in record flows of $105 billion. The Firm is very well positioned for growth in the years ahead.”

Last month, Morgan Stanley acquired US-based investment management firm Eaton Vance in a $7bn deal.

Morgan Stanley was recently also in the news for making Bitcoin funds available to its wealth management clients.