Investment banking helps Jefferies

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Jefferies, like its Wall Street competitors, is leaning on investment banking to weather a trading slump.

Bloomberg News reports that the firm’s revenue from trading dropped in the three months through August to the lowest in six quarters, a sign that an industrywide decline in transactions is worsening. The quarter was saved by investment banking, where fees surged 61% to a record $475.7 million.

That matches what’s been happening on the rest of Wall Street. In the first six months of 2017, the five largest U.S. investment banks - JPMorgan, Bank of America, Citigroup, Goldman Sachs and Morgan Stanley - posted combined investment-banking revenue of $15.3 billion, a 20% increase from the same period a year earlier. Trading revenue of $39.5 billion was little changed.

“You’re getting more deals and bigger deals getting announced and banks are doing the underwriting for those,” Charles Peabody, a banking analyst at Compass Point Research & Trading, said Tuesday in a telephone interview. Also, with investors continuing to search for yield, corporations are tapping public debt markets rather than relying on loans, he said.

Hit the link below to access the complete Bloomberg News article:

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