Jefferies Q1 profit climbs on investment banking, asset management revenue jump

By Lananh Nguyen and Mehnaz Yasmin

(Reuters) -Jefferies Financial’s first-quarter profit rose as its investment bankers benefited from improving activity and its asset managers almost quadrupled their revenue.

Net earnings attributable to Jefferies’ common shareholders rose 12% compared with a year earlier to $149.6 million, or 66 cents per share, in the three months ended Feb. 29.

Jefferies’ investment banking revenue in the first quarter jumped 31% from a year earlier to $739.7 million, amid surging activity across its advisory as well as equity and debt underwriting businesses.

“Our investment banking pipeline continues to strengthen,” Brian Friedman, the company’s president, told Reuters. “We are optimistic about the rest of this year into next year.”

Investment banking giants have been hoping for a recovery after almost two years of dismal activity in mergers and acquisitions, as rising interest rates deterred companies from striking deals.

“You are starting to get those announcements, you are starting to get momentum, the pipeline is filling,” Friedman said.

Revenue from Jefferies’ asset management unit surged to $273.4 million in the first quarter from $68.5 million a year earlier, the bank said, citing strong performance across its investment strategies and funds.

Capital markets revenue rose 9% to $711.6 million, the third-best quarterly performance for the division.

Jefferies’ earnings are closely watched by investors and analysts as a precursor to results from the biggest U.S. banks, which will begin to be released from mid-April.

(Reporting by Lananh Nguyen in New York and Mehnaz Yasmin in Bengaluru; Editing by Krishna Chandra Eluri)


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