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By Pritam Biswas and Lananh Nguyen
(Reuters) -Jefferies Financial's profit more than tripled in the fourth quarter as the investment bank earned higher fees from advising on deals and underwriting activity remained strong, it reported on Wednesday.
Ebullient markets, falling interest rates and prospects for lighter regulation under the incoming Trump administration have boosted corporate sentiment toward mergers and acquisitions. Equity and debt offerings also jumped in the second half of 2024.
Global investment banking revenue surged 26% to $86.8 billion in 2024, led by North America, which recorded a 33% increase, according to data from Dealogic. Jefferies earned the seventh highest fees across banks over the same period.
"What will drive corporate activity, private equity activity and overall investment banking and capital markets activity will be M&A and IPOs," Brian Friedman, president of Jefferies, told Reuters in an interview.
"We are in a positive and increasingly attractive period."
In the fourth quarter, the company's investment banking revenue soared nearly 73% to $986.8 million, while capital markets revenue rose 34% to $651.7 million.
Bankers expect global deal volumes to surpass $4 trillion in 2025, the highest in four years, buoyed by U.S. President-elect Donald Trump's pledge of less regulation, lower corporate taxes and a broadly pro-business stance.
Last month, Goldman Sachs CEO David Solomon said at a Reuters industry conference that dealmaking in equities and M&A could exceed 10-year averages in 2025.
Total revenue at Jefferies came in at $1.96 billion, up from $1.2 billion in the year-ago period.
The New York-based bank's net profit attributable to common shareholders was $205.7 million, or 91 cents per share, for the three months ended Nov. 30. That compares with $65.6 million, or 29 cents per share, a year earlier.
Jefferies' shares, which were up about 1% in trading after the bell, gained 94% in 2024, outperforming larger rivals Goldman Sachs and Morgan Stanley as well as broader equity markets.
Jefferies' earnings are followed closely by analysts and investors as a precursor to big bank earnings, which kick off next week.
(Reporting by Pritam Biswas in Bengaluru and Lananh Nguyen in New York; Editing by Alan Barona)