(Reuters) -Morgan Stanley's ( MS ) profit rose in the first quarter, lifted by a resurgence in investment banking led by equity underwriting where revenue more than doubled.

The Wall Street bank on Tuesday reported net income of $3.4 billion, or $2.02 per diluted share, in the three months ended March 31. That compares with $3 billion, or $1.70 per share, a year earlier.

"As a result of strong net new asset growth, the firm has reached $7 trillion of client assets across wealth and investment management," said CEO Ted Pick in a statement.

"Institutional Securities also saw strength across the markets and underwriting businesses."

Shares of the investment bank rose 2.6% before the bell. They have lost nearly 7% so far this year and underperformed the benchmark S&P 500 index.

Investment banking activity has rebounded from a two-year dealmaking drought as large corporates issued near-record levels of debt and equity capital markets became more active.

Investment banking revenue climbed 16% in the quarter from a year ago. Fixed-income underwriting remained a bright spot for a second quarter in row, driven by higher bond issuance.

Though advisory revenue decreased nearly 28% in the first quarter, equity underwriting surged nearly 113% to $430 million.

At rival Goldman Sachs ( GS ), profit jumped 28% as investment banking bounced back and trading revenue surged, it reported on Monday.

Investment banking results also improved at JPMorgan Chase and Citigroup ( C/PN ), fueled by debt and equity capital markets.

The quarter was Morgan Stanley's ( MS ) first with Ted Pick at the helm.

Morgan Stanley's ( MS ) total revenue increased to $15.14 billion in the first quarter, compared with $14.5 billion, a year earlier.

Total revenue for the broader institutional securities division housing investment banking, equities and fixed income came in at $7 billion, compared with $6.8 billion a year earlier. Fixed income trading revenue slid 4%, while equities increased 4%.

Wealth management revenue was up $6.9 billion, from $6.6 billion a year earlier.

Morgan Stanley ( MS ) has built its wealth business into a powerhouse that generates more stable revenue and helps smooth out revenue from more volatile businesses such as trading and investment banking.

But as the competition for market share in wealth management increases, markets are focused on whether Morgan Stanley ( MS ) can grow assets.

The unit is also facing higher regulatory scrutiny, with multiple U.S. regulators probing whether Morgan Stanley ( MS ) is vetting its clients and knows the origin of their wealth. The Wall Street Journal reported the probes earlier this month.

Investment management revenue of $1.4 billion were higher than $1.3 billion posted last year.

The bank's asset management unit is aiming to double its private credit portfolio to $50 billion in the medium term, Reuters reported in January, as it gathers funds from large investors to loan out to companies.

(Reporting by Manya Saini in Bengaluru and Tatiana Bautzer in New York; Editing by Lananh Nguyen and Arun Koyyur)