Morgan Stanley posted a better-than-expected surge in quarterly profit on Thursday, driven by strong trading gains as the coronavirus pandemic drove record swings in global financial markets, while its major competitor Bank of America Corp saw its profit more than halve in the second quarter.

Morgan Stanley's trading unit recorded a 68 percent jump in revenue, led by a nearly 168 percent surge in bond trading. Equities trading revenue rose 23 percent. The results mirrored those of rival Goldman Sachs Holdings Inc, which posted its best trading revenue in a decade.

Investment banking was another bright spot for Morgan Stanley, where revenue jumped 39 percent as businesses continued to access the market to benefit from the lower-rate environment and to raise liquidity.

Morgan Stanley set aside 239 million U.S. dollars as provisions for credit losses, down from 407 million U.S. dollars in the previous quarter.

However, on the Bank of America's side, things were not that lucky. The falls in revenue and profits were broadly similar to those for other major U.S. banks this week that have suffered from a combination of the need to brace for a deep recession and profiting from the surge in financial market volatility and trading since February.

That in part was due to the bank having set aside more than some in the first quarter, but its provision expense rose just 7 percent in the second, compared to a 26 percent increase at JPMorgan Chase & Co, a 12 percent jump at Citigroup Inc and more than double at Wells Fargo.

Revenue, net of interest expense, fell 3 percent to 22.3 billion U.S. dollars.

(With input from Reuters)