Wall St. Bellwether Jefferies Sets Second Quarter Record Led by Investment Bank


The Jefferies Banking Barometer (JEF) on Monday posted record results for the second quarter after the closing bell, thanks to continued strength in investment banking.

For the second quarter ended May 31, Jefferies Group reported total revenues of nearly $ 1.62 billion, up 56% from the $ 1.03 billion reported a year ago, a record high at the time. Net income for the quarter was $ 318 million, up 147% from the same period a year earlier.

Bulge-bracket banks will publish their results next month. Overall, banks at all levels performed spectacularly in the first quarter, with trading revenues boosted by high trading volumes across asset classes and the investment bank reaping the benefits of the boom. PSPC, which has since abated.

At Jefferies, second-quarter investment banking revenues, driven by strength in advisory and debt underwriting, hit a record $ 1.03 billion, up 227% from $ 316 million of dollars from last year.

“We are particularly pleased that our investment banking momentum continues to grow and gain market share. It is the result of many years of hard work and commitment to invest in human capital, build long-term relationships, maintain and improve our brand, and build a full-service global business, ”said CEO Rich Handler at Yahoo Finance.

Handler added that although the “PSPC market was particularly sluggish this quarter”, “Jefferies’ global capabilities in mergers and acquisitions, traditional IPOs and leveraged finance have remained strong.”

UKRAINE – 2021/05/27: In this photo illustration, a Jefferies group logo of an investment banking company seen on a smartphone and PC screen. (Photo Illustration by Pavlo Gonchar / SOPA Images / LightRocket via Getty Images)

“More normalized” trading

In recent weeks, big bank executives have suggested more normalized trading, with JPMorgan Chase (JPM) CEO Jamie Dimon estimating a “more normal” quarter with income from fixed income and equity trading “A little north of $ 6 billion”. while Citigroup (C) CFO Mark Mason expects trading income to fall into the “low 30% range,” with strong performance from equities offset by fixed income.

Jefferies’ business operations are also showing a return to normal, albeit at higher levels than before the pandemic, as the company gained market share. In the second quarter, the company’s trading activity, classified as combined capital markets income, fell 31.5% from $ 730 million last year. at $ 500 million, but still higher than 2019 revenue of $ 379.3 million during the same period. Net income from equities hit a record $ 243 million in the second quarter from $ 237 million last year, while net income from fixed income reached $ 257 million from $ 493 million a year ago. is one year old.

“While we expect everyone’s capital markets trading activities to return to more normalized levels, we are satisfied with our results which we believe show that we have not only gained market share in these activities. , but that we kept them, ”added Handler.

Elsewhere, with many Wall Street firms putting a hard line on their return to the office, Handler, who has been CEO since January 2001, making him the longest-serving investment banking director, touted a flexible working model. for the 4,000 employees of the company.

“Our employees all want to come back to the office. We are in transition during the summer with many events for employees and customers. Our expectation and hope is that there will be a much more standardized office work experience after Labor Day, but we believe our employees want and deserve the flexibility than a smart hybrid. [work from home] the policy will allow, ”added the CEO.

Julia La Roche is a correspondent for Yahoo Finance. Follow her on Twitter.

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