Net income exceeded analysts' expectations and grew to $2.67 billion or $2.51 per share from Â£1.57 billion or $1.48 per share recorded for the same period last year.
Key factors in driving the growth have been identified as a threefold rise in investment gains, a 35 per cent rise in revenue from trading and 25 per cent growth in advisory fees.
Chief executive John Mack said: "This strong performance was in large part the result of effective, disciplined risk-taking by our team in institutional securities, which helped deliver record results across our sales and trading businesses."
Morgan Stanley's strong showing follows similarly impressive first-quarter results from Goldman Sachs earlier this week, as US investment banks defy market wisdom that bad debts incurred from meltdown in the subprime mortgage market would hurt profits.
News of the improved performance comes after Morgan Stanley yesterday won a reversal of an earlier judicial award of $158 million in the Florida Court of Appeal.
Ron Perelman had accused the bank of concealing Sunbeam's parlous financial situation when he sold it his camping company Coleman for $1.5 billion.