Morgan Stanley's European investment banking business has beaten its previous revenue record and is on course to outpace its US business for the first time.

Franck Petitgas, head of European investment banking at the US bank, told London-based managing directors that in the nine months to August 31, European revenues beat the full-year revenue record established in 2000. He said: "Our performance in Europe has been exceptional." A banking source said European investment revenues are "neck and neck" with the US. He said: "Europe will beat the US this year." The bank does not break down information by region. Last week, Morgan Stanley reported higher sales and trading revenues, which helped propel pre-tax profits at its institutional securities unit by more than half to $2bn (€1.6bn) in the third quarter. A one fifth rise in equity underwriting revenues helped drive capital markets underwriting revenues up 7% to $548m. Advisory revenues surged to $461m.