(Bloomberg) — Jefferies Financial Group Inc. said investment-banking revenue rose in the fourth quarter, and it plans to keep expanding that business while winding down the merchant bank.
Revenue from investment banking and capital markets clocked in at $1.61 billion, a 5% increase from the prior-year quarter, the New York-based firm said Wednesday in a statement. Total net revenue fell 3% from a year earlier to $1.81 billion, dragged down by declines in asset management, merchant banking and the corporate business.
“We believe Jefferies’ future growth will be fueled by the continued build-out of our investment banking effort, enhancing our capital markets businesses, and further developing our Leucadia Asset Management alternative asset management platform,” Chief Executive Officer Rich Handler and President Brian Friedman said in the statement.
The company will keep working to wind down its merchant-banking portfolio “prudently and patiently,” they said. The executives also highlighted the increased headcount at the firm, with the investment bank upping the number of managing directors 24% to 278 and overall headcount growing by 15% in 2021.
The results cap off a fervent year of mergers and acquisitions that set off an investment banking boom across Wall Street. The firm’s performance is closely watched as a leading indicator for results from larger rivals such as JPMorgan Chase & Co. and Bank of America Corp., which report earnings later.
The Jefferies executives said the bank’s investment banking backlog is “robust” and similar to levels from the prior year.
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