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Jefferies just reported a big jump in profits

Sep 20, 2016, 20:58 IST

Rich Handler, Jefferies CEOGetty Images/ Rob Kim

Investment bank Jefferies Group LLC just reported a jump in third-quarter profit, driven by strong revenue in its fixed income trading business.

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Net earnings rose to $41.2 million in the three months ended Aug. 31, from $2.1 million a year earlier.

The bank posted fixed-income trading revenue of $195.3 million, compared with a negative $18.2 million a year earlier.

Jefferies, a unit of Leucadia National Corp, kicks off the reporting season for investment banks and is often viewed as an indicator of the performance of Wall Street banks.

"Aside from a volatile two week period following the unexpected outcome of the UK 'Brexit' referendum in June, fixed income and equity secondary market conditions remained reasonably steady for much of the third quarter," Chief Executive Officer Rich Handler said in a statement.

Overall trading revenue soared about 86 percent to $343.6 million.

However, revenue from investment banking fell 24.3 percent to $294.9 million, down for the third straight quarter hurt by fewer initial public offerings.

There were 55 IPOs in the United States this year as of Sept. 15, down 64 percent from a year earlier, according to Thomson Reuters data.

Jefferies said revenue from advising on mergers and acquisitions was "solid" and that its backlog for the four quarter was the highest it has been all year. (Reporting by Sudarshan Varadhan in Bengaluru and Olivia Oran in New York; Editing by Saumyadeb Chakrabarty and Jeffrey Benkoe)

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