Jefferies Group (NYSE:JEF) has reported a spike in fourth-quarter profit thanks to a bumper performance in its investment banking division.
Pre-tax earnings more than tripled to US$304.9 million over the quarter, as net revenue jumped 63% to US$1.96 billion, Jefferies reported on Wednesday.
A 73% jump in investment banking revenue to US$986.8 million drove the uptick, Jefferies said, as advisory and equity turnover climbed 91% and 49% respectively.
“More normalized market conditions and the maturation of our platform are beginning to show our earnings potential,” chief executive Richard Handler commented.
Anticipation has built around a looming rebound in initial public offering, merger and acquisition activity to bring an end to a multiyear dealmaking slump on high interest rates.
“The return of real interest rates is an underlying driver of a normalizing environment,” Handler added in a Bloomberg-cited interview.
“2023 was a transitional year, 2024 was a normalizing year, and perhaps 2025 will be a normal year.”
Over the full year, Jefferies’ net revenue climbed 50% to US$7 billion, aiding a 184% surge in pre-tax earnings to US$1 billion
Fourth-quarter diluted earnings per share of US$0.93 were also ahead of consensus estimates for US$0.91.