- Jefferies posted a sharp fourth-quarter investment-banking rebound, with net revenue up about 20% to $1.19 billion on strong equity and debt underwriting and improved advisory activity.
- The quarter included a $30 million pre-tax loss tied to its Point Bonita fund’s exposure to bankrupt First Brands, which Jefferies says is manageable.
- Industrywide, 2025 investment-banking fees rose roughly 15% to nearly $103 billion, led by mega-deals and dominated by Goldman Sachs and JPMorgan in the rankings.
- Rate-cut and easing-regulation expectations are supporting dealmaking momentum, though private-credit and receivables-financing risks remain a notable fault line.
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Jefferies’ fourth-quarter results reflect a broader recovery in Wall Street’s investment banking business. The bank’s investment banking net revenue jumped 20.4% year-over-year to $1.19 billion, with advisory fees rising about 6.3%, and underwriting revenues particularly strong—equity underwriting up nearly 78% and debt underwriting up about 26%. This suggests clients are returning to capital markets not just to raise funds but to execute more complex transactions, likely reflecting improved financing conditions and more favorable regulatory signals.
Globally, 2025 approached pre-pandemic heights in fee-earning activity: nearly $103 billion in investment banking revenue was recorded via Dealogic—a second-best year after 2021—with Goldman Sachs leading in both M&A fee revenue and advisory deal volumes. Goldman advised on $1.48 trillion of deal volume, while JPMorgan generated over $10 billion in total investment banking fees, aided by its strength in both advisory and capital markets activity.
Nevertheless, Jefferies’ exposure to the First Brands Group through its private credit fund Point Bonita remains a drag. The $30 million pre-tax loss in the quarter reflects the fallout from First Brands’ bankruptcy and fraud allegations. While Jefferies emphasizes that its direct loss and equity investment exposure are modest—in particular, a $43 million stake in invoices and receivables, plus a minor bank-loan interest—this event highlights growing risks in receivables-factoring, private credit, and off-balance-sheet financing structures.
From a strategic perspective, Jefferies and peer institutions benefit from three converging themes: higher deal volume and underwriting activity, improving regulatory environment, and interest rate expectations. However, maintaining margin for underwriting and advisory businesses, managing credit risk, and navigating potential regulatory or macroeconomic headwinds remain key to sustaining momentum. 2026 will test whether these gains are durable or subject to reversal under stress.
Open questions include: how the regulatory environment will evolve in response to pressure over antitrust and financial system risk; how resilient the market for IPOs and equity underwriting will be if interest rates stay elevated; and whether private credit/factoring sectors will face broader scrutiny or fallout from high-profile failures like First Brands.
Supporting Notes
- Jefferies’ investment banking net revenues increased by 20.4% to $1.19 billion in Q4 year-over-year.
- Equity underwriting revenues rose 77.7%; debt underwriting rose 25.8%.
- Advisory revenue was $634.2 million in Q4, marking its second-best quarter ever.
- Pre-tax loss of $30 million came from exposure to First Brands via Point Bonita fund.
- Jefferies’ adjusted net earnings per common share were $0.96 in Q4 vs. $0.91 a year earlier.
- Global investment banking fee revenue in 2025 reached nearly $103 billion, up 15% vs. 2024; second highest after 2021.
- Goldman Sachs advised on $1.48 trillion in deals in 2025, led all banks in M&A deal volume and fee revenue; JPMorgan posted approximately $10.1 billion in total banking fees.
- Jefferies disclosed about $715 million in receivables exposure via Point Bonita to First Brands customers such as Walmart and AutoZone; direct equity investment around $43 million.