Morgan Stanley has defied expectations of a slowdown in the second quarter in the securities and investment banking business with an increase in revenues across the board - but a 21% jump in costs virtually wiped out any rise in profits.

Morgan Stanley's institutional securities division reported a pre-tax profit of $1.05bn (€870m) for the second quarter - less than 0.5% higher than the first quarter. While revenues from the securities business were up 13% compared to the first quarter, non-interest expenses leapt by $500m to wipe out any profits growth in the securities business.