(Reuters) -Investment bank Jefferies Financial Group Inc reported a 59% decline in first-quarter profit on Tuesday, hurt by lower underwriting fees as turbulent markets crushed appetite for deals.
After a stellar run in 2021, U.S. investment banking giants struggled for most of last year as the Russia-Ukraine war worsened volatility and the U.S. Federal Reserve’s monetary tightening raised borrowing costs.
Still, Jefferies CEO Richard Handler and President Brian Friedman expect capital markets to improve in the second half of 2023, according to a letter seen by Reuters earlier this month.
Net profit attributable to Jefferies came in at $133.6 million, or 54 cents a share, for the three months ended Feb. 28, compared with $327.4 million, or $1.23 a share, a year earlier.
Analysts were expecting 43 cents a share, according to Refinitiv. It was not immediately clear if the estimates were comparable.
The New York-based financial institution’s results are often viewed as a prelude to earnings at Wall Street titans such as JPMorgan Chase & Co, Goldman Sachs Group Inc and Morgan Stanley.
Jefferies’ total net revenue for the quarter was down 24% at $1.28 billion, hit by a 65% decline in its asset management unit.
(Reporting by Jaiveer Shekhawat in Bengaluru; Editing by Devika Syamnath)
