By Pritam Biswas and Lananh Nguyen
(Reuters) -Jefferies Financial’s profit greater than tripled within the fourth quarter because the investment bank earned higher fees from advising on deals and underwriting activity remained strong, it reported on Wednesday.
Ebullient markets, falling rates of interest and prospects for lighter regulation under the incoming Trump administration have boosted corporate sentiment toward mergers and acquisitions. Equity and debt offerings also jumped within the second half of 2024.
Global investment banking revenue surged 26% to $86.8 billion in 2024, led by North America, which recorded a 33% increase, in line with data from Dealogic. Jefferies earned the seventh highest fees across banks over the identical period.
“What’s going to drive corporate activity, private equity activity and overall investment banking and capital markets activity shall be M&A and IPOs,” Brian Friedman, president of Jefferies, told Reuters in an interview.
“We’re in a positive and increasingly attractive period.”
Within the fourth quarter, the corporate’s investment banking revenue soared nearly 73% to $986.8 million, while capital markets revenue rose 34% to $651.7 million.
Bankers expect global deal volumes to surpass $4 trillion in 2025, the best in 4 years, buoyed by U.S. President-elect Donald Trump’s pledge of less regulation, lower corporate taxes and a broadly pro-business stance.
Last month, Goldman Sachs CEO David Solomon said at a Reuters industry conference that dealmaking in equities and M&A could exceed 10-year averages in 2025.
Total revenue at Jefferies got here in at $1.96 billion, up from $1.2 billion within the year-ago period.
The Recent York-based bank’s net profit attributable to common shareholders was $205.7 million, or 91 cents per share, for the three months ended Nov. 30. That compares with $65.6 million, or 29 cents per share, a 12 months earlier.
Jefferies’ shares, which were up about 1% in trading after the bell, gained 94% in 2024, outperforming larger rivals Goldman Sachs and Morgan Stanley in addition to broader equity markets.
Jefferies’ earnings are followed closely by analysts and investors as a precursor to big bank earnings, which kick off next week.
(Reporting by Pritam Biswas in Bengaluru and Lananh Nguyen in Recent York; Editing by Alan Barona)