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Written by Lanan Nguyen and Menaz Yasmin
(Reuters) – Jefferies Financial’s first-quarter profit rose as the investment banker benefited from improved activity and the asset manager nearly quadrupled its revenue.
Jefferies’ net income attributable to common stockholders rose 12% from a year earlier to $149.6 million, or 66 cents per share, for the three months ended Feb. 29.
Jefferies’ first-quarter investment banking revenue rose 31% from a year earlier to $739.7 million, driven by a sharp increase in activity across its advisory and equity and debt underwriting businesses.
“Our investment banking pipeline continues to strengthen,” company president Brian Friedman told Reuters. “We’re optimistic for the rest of this year and into next year.”
Big investment banks are hopeful of a recovery after nearly two years of disastrous merger and acquisition activity as rising interest rates discouraged companies from doing business.
“These announcements are starting to come in, momentum is starting to build, and the pipeline is filling up,” Friedman said.
Revenue from Jefferies’ asset management division jumped 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 increased 9% to $711.6 million, the sector’s third-best quarterly result.
Investors and analysts are watching Jefferies’ financial results as a precursor to the results of major U.S. banks, which are scheduled to be announced in mid-April.
(Reporting by Ranan Nguyen in New York and Menaz Yasmin in Bengaluru; Editing by Krishna Chandra Eluri)
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