Investment banking business welcomes spring! Jefferies Financial Group Inc. (JEF.US) sees more than doubled profits in Q4, and a bumper harvest for Wall Street giants is on the horizon.

Jefferies Financial Group Inc.'s profit surged, mainly thanks to a rebound in mergers and acquisitions activity and a sharp increase in stock trading revenue, indicating that the years of slow trading conditions are coming to an end. Jefferies Financial Group Inc. announced on Wednesday that revenue for the fourth quarter ending November 30 increased by 63% year-on-year to $1.96 billion, surpassing market expectations; net profit was $206 million, more than double compared to the previous year; earnings per share were $0.91, lower than market expectations, compared to $0.29 in the same period last year. Revenue from the investment banking business in the fourth quarter increased by 73% year-on-year to $9.868 billion, with annual revenue for the business reaching $34.4 billion, the second highest in history. In the fourth quarter, revenue from the advisory business soared by 91% year-on-year to $5.967 billion, reaching a historical high, thanks to increasing market share and a rebound in global mergers and acquisitions activity. Driven by strong growth in the stock trading business, revenue from the capital markets division of Jefferies Financial Group Inc. in the fourth quarter was $6.517 billion, a 34% increase compared to the previous year. Due to "increased trading volumes and more favorable trading opportunities," revenue from the stock trading business increased by 49% to $4.108 billion. Debt capital markets business also grew, with revenue increasing by 15% to $2.409 billion, as credit trading performance improved. Jefferies Financial Group Inc. had previously stated that the challenging environment in 2023 had impacted its overall performance, labeling it as a "trough year." Since then, the company reported that profits had increased in all four quarters of 2024. The performance of Jefferies Financial Group Inc. may also indicate that several large Wall Street banks set to report their fourth quarter and full-year results next week will deliver strong performances. President of Jefferies Financial Group Inc., Brian Friedman, said: "The return of actual interest rates is the fundamental DRIVE for normalization. 2023 was a transition year, 2024 is a normalization year, perhaps 2025 will be a normal year." He mentioned initial public offerings and merger transactions. Even during difficult times, Jefferies Financial Group Inc. has hired hundreds of managing directors globally, expanding its team of senior bankers. Friedman stated that the pace of recruitment has slowed down, but the bank still has opportunities to selectively hire externally, although it is expected that most recruits will come from within the company. Jefferies Financial Group Inc. did not provide earnings guidance, but Friedman remains optimistic about the next year. Friedman said: "2024 is a year of increasing activity, and this trend will continue into 2025." He mentioned that with the large-scale return of private equity transactions, strategic mergers, and initial public offerings, "we expect growth in new issuances, new acquisitions, and leveraged finance markets." As of the time of writing, Jefferies Financial Group Inc.'s stock price fell by 0.8% after hours.