(Reuters) – Jefferies Financial reported an over three-fold rise in fourth-quarter profit on Wednesday as the investment bank earned higher fees from deal advisory and underwriting activity remained strong.
An ebullient market, falling interest rates and hopes for an easier regulatory environment under the incoming Trump administration have boosted corporate sentiment toward mergers and acquisitions.
Initial public offerings and debt offerings also saw a significant improvement in 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, according to data from Dealogic. Jefferies earned the seventh highest fees across banks over the same period.
In the fourth quarter, the company’s investment banking revenue soared nearly 73% to $986.8 million, while capital markets revenue rose 34% to $651.7 million.
“Jefferies begins 2025 in the best position ever in our firm’s sixty-two-year history,” the bank said in a letter to shareholders.
Bankers expect global deal volumes to surpass $4 trillion in 2025, the highest in four 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 (EPA:TTEF) revenue at Jefferies came in at $1.96 billion, up from $1.2 billion in the year-ago period.
The New 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 year earlier.
Jefferies’ shares gained 94% in 2024, outperforming larger rivals Goldman Sachs and Morgan Stanley (NYSE:MS) as well as broader equity markets.
Jefferies’ earnings are followed closely by analysts and investors as a precursor to big bank earnings, which kick off next week.