Morgan Stanley's profit rose in the second quarter as investment banking activity rebounded.

Its net income rose to US$3.1 billion , or US$1.82 per share, in the three months ended June 30, the bank said on Tuesday. That compares with US$2.2 billion, or US$1.24 per share, a year earlier.

An improving economic outlook, expectations of US interest rate cuts and surging equity markets have spurred corporate executives to carry out buyouts, debt sales and stock offerings after a nearly two-year dry spell for Wall Street.

Global investment banking revenues surged 17% in the first half to US$41.6 billion, according to data from Dealogic.

Morgan Stanley's investment banking revenue surged 51% to US$1.62 billion in the second quarter.

Rival Goldman Sachs on Monday reported a 17% increase in investment banking revenue. On Friday, JPMorgan Chase reported a 46% gain in investment banking revenue, while Citi's fees from investment banking jumped 60%.

  - Reuters