NEW YORK: Jefferies Financial Group Inc posted its best fiscal third-quarter revenue ever, buoyed by what the firm said is a strengthening environment for dealmaking and trading activity across the globe.
Total revenue for the three months through August jumped almost 22% to US$2.05bil, the firm said in a statement Monday.
That’s the highest third quarter in the investment bank’s history, and the most revenue for any quarter since the first three months of 2021, when dealmaking surged coming out of the pandemic.
Jefferies said the last quarter was its best period ever for advisory revenue, as deal activity picked up and market conditions improved.
Trading activity also came in higher than a year ago, as volatility in the equity market continued to push results higher.
“We have been experiencing a strengthening of corporate mergers and acquisitions,” Jefferies president Brian Friedman said in an interview.
“We don’t think this is a one-off, we think this is a trend that continues into next quarter, and into the foreseeable future.”
The results offer an early look into how Wall Street has navigated the period amid President Donald Trump’s trade war and ongoing geopolitical tensions.
Jefferies’ numbers signalled that the nation’s biggest banks, scheduled to report their third-quarter results next month, may also report improvements in their investment-banking revenue.
“There was a delay in momentum, and since May and June that momentum is back in force,” Friedman said.
The biggest US banks have benefited from volatile markets, fuelled by changing policies under the Trump administration, which has roiled the market for most of the year.
That’s been good news for trading desks that have seen their revenue rise to records, while dealmaking has also begun to make a comeback.
Jefferies capital-markets unit generated US$723mil in revenue, up 6.9% from a year earlier.
The bank touted strength in equities, as higher volumes drove “stronger results” particularly in the United States and European equity cash business.
Equity options, corporate derivatives and electronic trading also delivered strong results, Jefferies said.
The bank struck an exuberant tone about the remaining half of the year, citing a rebound in market sentiment across the globe.
“While the world will remain volatile and full of challenges, we are increasingly optimistic about the near- and long-term outlook for Jefferies,” chief executive officer Rich Handler and Friedman said in the statement.
Overall, investment banking revenue grew 17% to US$1.09bil, Jefferies said, calling out strength in advisory revenue which climbed to almost US$656mil, the business’s best quarter ever, fuelled by increased deal values in mergers and acquisitions across sectors.
Debt and equity underwriting revenue also increased, to almost US$431mil, due to improving market conditions, it said.
“Despite whatever uncertainties and worries, businesses, corporates and sponsors are forging ahead,” Friedman said, adding that dialogue around initial public offerings and mergers and acquisitions is increasing.
“Everything that we’re seeing would portend greater activity in the future.”
Asset-management net revenue nearly tripled, to almost US$177mil from US$59mil a year earlier, driven by improved performance across fund strategies, the firm said. — Bloomberg
