NEW YORK ( TheStreet) --Morgan Stanley analyst Betsy Graseck raised first-quarter estimates for the big banks on Sunday, citing upside to capital markets revenues. The return of the "risk on" trade is buoying fixed income trading revenues and investment banking fees are also up 14% quarter-to-date, according to the analyst. Improved consumer credit and higher refinancing fee income thanks to a better-than-expected response to the latest HARP changes also provide upside. Here's a quick look at the revised estimates. Bank of AmericaThe analyst raised Bank of America's ( BAC) earnings estimates for the first quarter to 3 cents from a penny previously. 2012 estimates rose to 47 cents from 40 cents previously. Graseck expects Bank of America to reach a 7.75% Basel 3 target by the fourth quarter of 2012 and 8.9% by the fourth quarter of 2013. The bank passed the Fed's 2012 capital stress test comfortably, although it erred on the side of caution and abstained from putting in a request to return capital to shareholders. Morgan Stanley expects the bank to hike dividend in 2013 to 4 cents per quarter and start buybacks in 2014. Shares of Bank of America were rising 1.5% to $9.94 after briefly cracking the $10 mark on Monday. Graseck has a price target of $9 per share on the bank. Citigroup Graseck's first quarter forecast for Citigroup ( C)jumped 34% to 88 cents, while the 2012 earnings estimate is up by 10% to $3.67. The analyst also raised her price target on the stock by 14% to $42. Citigroup suffered a setback last week after the Federal Reserve unexpectedly rejected the bank's plans to return capital on the grounds that it failed to meet the minimum Tier 1 Common Capital of 5% in a supervisory stress scenario assuming it went ahead with its plans. Graseck expects Citi to resubmit its plan and increase the amount of capital it returns to shareholders in the second half of 2012. The bank is likely to buy back shares worth $1.5 billion in the fourth quarter of 2012 and might raise its dividend only in 2013, according to the analyst. Shares of Citi were rising 2.6% to $37.61.