Morgan Stanley Q1 profit beats estimates on trading boost as it jumps 40%

Morgan Stanley tracked arch rival Goldman Sachs in delivering stronger-than-expected results on Wednesday, but sounded a note of caution about the impact of trade tensions and geopolitical concerns on future trading revenue.

A 40 percent rise in first quarter profit at the bank was driven by the rise in market volatility since February, but Chief Financial Officer Jonathan Pruzan warned that market turbulence like that caused by a tit-for-tat row with China could push clients to the sidelines.

"Volatility is interesting because there's certain volatility that is pretty good and conducive to markets and clients and our results, and then there's volatility, like we saw in February, which was pretty gappy," Pruzan told Reuters.

"Our firm was able to absorb those spiky days, but too much of a good thing is not a good thing for our businesses."

He also pointed to the bank's struggles last year to match a strong first quarter when its sales and trading revenue surged 30 percent. This time round, sales and trading revenue jumped 26 percent in the first three months of the year, driven by strong gains in equities and bond trading.