Handler with care

20 June 2017 By Antony Currie Follow @AntonyMCurrie

Like its bulge-bracket rival, Richard Handler’s investment bank seems to have steadied its bond-trading business. An underwriting boost in the quarter to May bodes well for the rest of Wall Street. But Morgan Stanley’s James Gorman has so far turned more progress into profit.

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Jefferies on June 20 reported net income of $70 million for its second quarter to May, 29 percent higher than in the same period last year. Revenue of $779 million was up 8 percent.

The net income figure was 39 percent lower than in the prior quarter, when the Leucadia subsidiary's effective tax rate was just 8 percent. In the second quarter the effective tax rate was 40 percent.

Fixed-income trading revenue of $159 million was 33 percent lower than last year’s second quarter and 28 percent lower than the fourth quarter. Equity trading revenue was $176 million, excluding a $96 million gain on the carrying value of its 24 percent stake in trading firm KCG. That compares to $168 million of trading revenue, excluding KCG, in last year’s second quarter.

Revenue from selling new stocks and bonds increased 87 percent from the same period last year. Of that, debt underwriting revenue represented $126 million, nearly triple the year-earlier figure, while equity underwriting grew its top line by 23 percent to $75 million.

Advisory revenue of $151 million was 3 percent higher than last year’s second quarter.

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