Return to returns

19 December 2017 By Antony Currie Follow @AntonyMCurrie

The Wall Street firm grew investment-banking revenue 48 pct this year, which should outpace larger rivals. Fixed-income trading languished and U.S. tax cuts won’t get its ROE out of the doldrums. But favoring advisory and underwriting is a smart way to bolster performance.

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Jefferies on Dec. 19 reported fourth-quarter net income of $90 million and revenue of $823 million for the three months to November 30.

Results included record investment-banking revenue of $529 million.

Equities trading revenue of $194 million increased 10 percent from both the same period last year and 2017’s third quarter.

Fixed-income trading revenue fell 36 percent from last year’s fourth quarter to $95 million. That equates to a 34 percent drop from this year’s third quarter.

Annualized return on tangible equity was 9.2 percent.

For the full financial year, revenue rose 32 percent to $3.2 billion and net income rose 23-fold to $357 million. The effective tax rate was 29 percent and return on tangible common equity was 9.2 percent.

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