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US investment bank Jefferies reported lower revenues for the start of 2025 than forecast, the latest sign that a much-anticipated surge in dealmaking under Donald Trump’s new administration has failed to materialise.
Jefferies on Wednesday said its revenues in the quarter to February 28 dropped 8 per cent from a year earlier to $1.6bn, missing Wall Street expectations in a Visible Alpha poll of $1.9bn. Net income of $128mn was also shy of forecasts of $213mn.
The disappointing results stemmed partly from lower investment returns in its asset management division, but also revenues from deal advisory work and equity underwriting lagging behind estimates.
Jefferies’ investment banking revenues fell 4 per cent to $701mn.
The decline highlights how Wall Street’s hopes that Trump would unleash “animal spirits” have been dashed in his presidency’s early months. Dealmakers are blaming the economic uncertainty from the US policy of aggressive trade tariffs and Elon Musk’s initiative to cut government spending.
The antitrust environment, which investment bankers criticised as overly strict under ex-president Joe Biden, has also been less deal friendly than anticipated under Trump.
Jefferies’ earnings figures, which in 2024 generated the tenth-highest share of global investment banking revenues, provide an insight into the health of the broader industry. Wall Street behemoths Goldman Sachs, JPMorgan Chase and Morgan Stanley disclose quarterly numbers in April.
Jefferies president Brian Friedman told the Financial Times there remained a large number of companies looking to go public, be sold or make acquisitions, and the question was how long the uncertainty would keep these deals from happening.
“It’s very early,” he said. “We see some improvement in recent days. It’s not unusual for business leaders and markets to go through a period of adjustment when there’s a need for adjustment, and this is a period of adjustment.”
Friedman added: “As people observe a longer pattern of statements and actions, they are able to form at least a preliminary perspective of likely direction and impact. So to that end, there perhaps is a bit more confidence and visibility today than a few weeks ago.”
Investment bankers suffered a dramatic feast to famine swing from 2021 to 2022, when the Federal Reserve’s decision to swiftly lift interest rates weighed on dealmaking in the US, by far the world’s largest investment banking market.
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