Fixed-income, currency and commodities drove most of the global investment banks to their best quarterly revenue results in three years, sparked by strong customer flows and recovering US credit markets, the Financial Times reads.

These "FICC" operations focus on the sales and trading of highly liquid securities and other products on behalf of banks' clients, rather than for their own accounts.

Defying some analysts' predictions of a year-on-year decline in so-called "flow" business following the exceptional market conditions that prevailed in the first quarter of 2009, the top 14 investment banks recorded more than $49bn in FICC revenues in the first quarter of 2010, up from $46bn in the same quarter in 2009. Bid-offer spreads remain high in historical terms, boosting profit margins.

Fixed-income now dominates the revenue stream providing 61 per cent of all revenue, up from half in 2007, according to research by Morgan Stanley.

"The first quarter was unusually strong as corporates sought to take advantage of receptive debt markets whilst investors had to rebalance their portfolios in very volatile markets," said Huw van Steenis, the analyst who heads the Morgan Stanley banking team that compiled the global totals.

The quarter also brought resurgent performances from some banks that were hit hard by the financial crisis, most notably UBS. The Swiss bank, which recorded a near-fatal SFr32bn ($30bn) loss from FICC in 2008 and lost another SFr547m in 2009, generated revenues of nearly $2.1bn in the first quarter of 2010. UBS has already hit the target it set for FICC revenues in 2013.

While a big fillip for the Swiss bank's still-recovering investment banking business, it's still a far cry from the $7.4bn in quarterly FICC revenues recorded by Goldman Sachs.

Bank of America Merrill Lynch also prospered, leap-frogging JPMorgan and Citi to take second place overall with $5.5bn in FICC revenue.

Other parts of the investment banks did not fare as well. Equities improved 21 per cent year-on-year to provide $17.6bn in revenue, but were still down sharply from $25bn at the 2007 peak.

"I don't think many people were 100 per cent pleased with their equities results," said Dan Davies, Credit Suisse banking analyst. Other analysts said the business was unlikely to grow quickly until the sovereign debt crisis is fully resolved.

Similarly, the investment banking side of the banks were down 19 per cent quarter-on-quarter to $11bn and well short of the $15bn at the peak.

The first quarter is traditionally the strongest of the year, providing roughly 30 per cent of profits. The second quarter started off well, analysts said.

"The business has continued to be quite strong in the second quarter, considering season adjustments, especially in fixed-income yet again. So far so good," said Kian Abouhossein, JPMorgan banking analyst.

Banking analysts cautioned, however, that continuing turmoil from the Greek crisis could weigh heavily on equities revenues and might well prompt many investment banking clients to postpone initial public offerings or acquisitions. "The crisis has been very strong for volumes. Customer business flows should be good. But there has also been huge volatility and in those kinds of markets there are the opportunities to lose money," said Mr Davies, of Credit Suisse.