Investment banking firm Jefferies saw fixed income trading revenues jump 62% to US$590 million for the six months to May 2023, from US$364 million.
This boosted in its capital markets net revenues from US$896 million to US$1.18 billion, a 32% increase, over the same period. Jefferies CEO, Richard Handler, said, “The month of June has brought green shoots in our investment banking and capital markets business, and we are growing increasingly optimistic about the return to a more normal environment.”
The substantial increase in capital markets net revenues were primarily driven by fixed income, with the improvement attributable to more stable market conditions, the firm said. On a quarterly basis, the firms saw capital markets net revenues of US$543 million which were up 30% versus the same quarter last year, when revenues stood at US$416.2 million, however they were down 15% from the prior quarter.
Equities grew to US$592 million up 11% from US$532 million in the first half of 2022. This is despite the bank seeing its proportional liquidity pool, measured by dividing total assets by cash and cash equivalents plus other liquidity sources, fall below 20% in Q1 2023 for the first time in four years, according to the Jefferies Creditor and Counterparty Overview, published in April 2023.
This is despite the bank seeing its proportional liquidity pool, measured by dividing total assets by cash and cash equivalents plus other liquidity sources, fall below 20% in Q1 2023 for the first time in four years, according to the Jefferies Creditor and Counterparty Overview, published in April 2023, and compensation / benefits costs fall 6% in the six month to May 2023 relative to the same period in 2022.
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