Wall Street just got a new sign that a dealmaking rebound is chugging higher.
Investment bank Jefferies Financial Group (JEF) reported fourth quarter and full year results Wednesday afternoon that showed fees for its M&A advisory business soared 91% from the year ago quarter to $597 million.
For the full year, investment banking fees rose 51% from the year before to $3.44 billion, notching the investment bank’s second highest annual results on record.
Profits at Jefferies for the same period climbed 156% to $691 million, a hair below the $694 million analysts expected, according to data compiled by Bloomberg.
Jefferies stock moved slightly lower in aftermarket trading Wednesday. US markets won’t open again until Friday. The stock has doubled in the last 12 months.
At close: January 8 at 4:00:02 PM EST
Jefferies’ results give investors their first official look at how the investment banking rebound across Wall Street played out near the end of 2024, ending a two-year drought that began in 2022.
Wall Street banks had many reasons to cheer at the end of 2024. The US economy withstood elevated interest rates as stocks rallied. Companies issued record levels of debt, dealmaking rebounded, and trading revenues appeared poised to keep growing.
Since the election, bankers and other finance executives have been optimistic over how the new Trump administration could be more favorable to their businesses, by loosening regulations and making it easier for companies to merge.
Investors sent US financial stocks soaring in November in reaction to Donald Trump’s presidential election win. Those for the biggest Wall Street banks all gained more than an index tracking US banks (^BKX) thanks in part to their Wall Street operations, although many of these stocks have traded sideways since that initial surge.
Jefferies is up 24% since Trump became president elect.
“Jefferies begins 2025 in the best position ever in our firm’s sixty-two year history,” CEO Richard Handler said in the fourth quarter earnings release.
“After decades of hard work, we are in the front row of the pack,” Handler added.
Whether the rally in big bank stocks that raged through November chugs on or stalls will be put to the test starting Wednesday when JPMorgan Chase (JPM), Citigroup (C), Goldman Sachs (GS) and Wells Fargo (WFC) report fourth quarter and full year earnings results.
Like Jefferies, those firms are all expected to see sizable jumps in their investment banking fees from a year ago, with JPMorgan leading the pack. However, their M&A business is not anticipated by analysts to show uniform improvement from the fourth quarter of last year.
