Jefferies reports record investment banking and equities quarter

Jefferies reported third-quarter net revenue of $2.22 billion and net earnings attributable to common shareholders of $261 million, according to results published by investor.wedbush.com. Diluted earnings per voting common share were $1.08, while return on adjusted tangible shareholders’ equity was 13.5%.

The investment bank said its strongest performances came from Investment Banking and Equities, which both produced record quarterly results. Those gains were partly offset by slower activity in Fixed Income and weaker performance from some Asset Management funds.

The board declared a quarterly cash dividend of $0.40 per common share. The payment is scheduled for November 25, 2026, to shareholders recorded as owners on November 16.

Investment banking leads growth

Investment Banking generated $1.33 billion in net revenue, a 17% increase from the same quarter a year earlier. Advisory revenue set a quarterly record, rising 25%, while Equity Underwriting revenue climbed 69%.

Jefferies attributed the performance to favorable market conditions and gains in market share. Merger and acquisition work expanded during the quarter, with sponsor-led activity particularly strong in healthcare, industrials and energy.

The company said its current backlog and newly developing business give it confidence about the remainder of 2026 and the transition into 2027. It also pointed to the breadth of its global operations and continued investment in its platform as contributors to the result.

Capital Markets revenue rose 11% year over year to $802 million. Equities accounted for $626 million, up 29%, supported by global cash and electronic trading and continued expansion in prime services.

Prime services provides support to hedge funds, and Jefferies said the business is strengthening its position with large, diversified clients. The firm also reported further expansion in equity options and structured derivatives, which it operates in cooperation with its investment banking business.

Fixed Income moved in the opposite direction. Revenue fell 26% to $176 million, reflecting what the company described as continued sluggishness in market activity.

Asset management and capital returns

Asset management fees and investment return revenue dropped to $34 million from $84 million in the comparable quarter. Jefferies said several fund strategies recorded weaker performance.

The firm is repositioning that business by reducing the capital committed to certain existing funds. That approach follows the strategy it outlined last autumn when it announced plans to acquire and finance a 50% interest in Hildene. Jefferies said it remained confident in the division’s longer-term prospects despite the latest quarter’s decline.

The company also continued returning capital to shareholders. It repurchased 1.3 million common shares during the quarter for $70 million, an average of $52.34 per share. Since the start of the year, buybacks have reached 8.3 million shares costing $441 million, at an average price of $53.25 per share.

The board restored the authorization for future share repurchases to $250 million. Combined with the dividend, the actions indicate that shareholder distributions remain part of Jefferies’ capital-allocation plans, although the company’s release did not provide a timetable for using the renewed authorization.

SMBC relationship expands

Jefferies is also deepening its relationship with Sumitomo Mitsui Banking Corporation. SMBC has increased its ownership of Jefferies to about 20%, making it the company’s largest shareholder.

A planned Japanese joint venture with SMBC and SMBC Nikko is expected to begin serving clients in January 2027. The proposed business will combine the Japanese partners’ domestic-market knowledge and balance-sheet resources with Jefferies’ international equities network, client relationships and trading technology.

Jefferies said the venture is intended to build a major wholesale equities and equity-capital-markets operation in Japan. The company also views the arrangement as a possible model for broader cooperation with SMBC in other markets.

The results remain preliminary for the period ending August 31, 2026. Jefferies expects to provide more detailed information in its quarterly Form 10-Q filing with the Securities and Exchange Commission, which it said should be submitted on or about October 9.

The company cautioned that its expectations for future earnings, margins, transactions, partnerships and business growth are forward-looking statements. Actual results could differ materially, and past performance may not predict future investment results.