Regional brokerage and investment bank Raymond James Financial on Wednesday said equity capital markets business in April continued to lag 2011 levels, and that markets in May so far remain challenging and volatile.

"The first three weeks of May were challenging for equity markets, allegedly a reaction to the uncertainty in European markets," Raymond James Chief Executive Paul Reilly said in the firm's monthly operations update. Looking ahead, "we may experience more volatility in the equity markets."

The fixed-income business, on the other hand, is tripling in size as Raymond James integrates Morgan Keegan's much-larger operations.

The firms' private client revenue in April rose 1.4 percent from March, reflecting the growth of fee-based assets in the first quarter. Morgan Keegan's private client group revenues were in line with the firm's expectations.

The April results are the first to reflect the April 2 takeover of Morgan Keegan. Total client assets rose to $376 billion from $292 billion in March, while securities commissions and fees rose to $253 million from $186.3 million.

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