Jefferies Group Q3 total net revenues $654 million
Staff Writer |
Jefferies Group announced financial results for its fiscal third quarter 2016. Total net revenues were $654 million and total sales and trading net revenues were $344 million.
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Rich Handler, chairman and CEO, and Brian Friedman, chairman of the executive committee, commented: "We are pleased to report quarterly revenues well above those for the same period last year and consistent with our recent second quarter, excluding the impact of the markup last quarter in two listed equity positions, which had no meaningful impact on our third quarter results.
"Aside from a volatile two week period following the unexpected outcome of the UK ‘Brexit’ referendum in June, fixed income and equity secondary market conditions remained reasonably steady for much of the third quarter. However, new issue activity continued to be slow industry-wide for most of the period.
"Our equity net revenues were $148 million, compared to $224 million for the second quarter and $203 million for the third quarter of last year. Two listed equity block positions, including KCG, that were marked up by $60 million in the second quarter, generated only about $2 million of further net total mark ups during the third quarter.
"The same two positions, as well as two additional securities positions that had an immaterial impact on the third quarter results, were marked up by a net total of $66 million in the third quarter of last year.
"Fixed Income net revenues were $195 million, compared to $238 million for the second quarter and up significantly from the poor year-ago quarter of negative $18 million. Our sales and trading credit businesses, including mortgages, corporates, leveraged credit and our recently enhanced emerging markets business, continued to perform well.
"Investment banking net revenues were $295 million and reflect solid advisory revenues, but a slower new issuance environment. Our backlog for the fourth quarter represents the highest level of backlog we have experienced this year. We have continued to expand into new sub-sectors and geographies, as well as enhance existing coverage.
"Our average daily VaR for the third quarter was $6.62 million, versus $8.25 million for the second quarter. The quarter-over-quarter decrease reflects both a reduction in risk, as well as lower asset price volatility. Average daily VaR for the third quarter was the lowest we have recorded since the fourth quarter of 2010." ■