Jefferies pivots to more actionable investment banking solutions while waiting for improved market conditions

Maria Nikolova

The company is turning to rescue financings, rights offerings, restructurings and alternative methods of getting much needed liquidity to its clients.

Jefferies Financial Group Inc (NYSE:JEF) has posted its results for the quarter to end-February 2020, with the report providing an update on the latest market developments.

Let’s take a look at the key results first. During the quarter to February 29, 2020, net income attributable to Jefferies Financial Group common shareholders amounted to $113 million, or $0.37 per diluted share. Pre-tax income was $158 million.

Jefferies Group posted quarterly record total net revenues of $1,171 million, pre-tax income of $235 million, net earnings of $171 million and return on tangible equity of 16.1%.

Jefferies Financial Group had parent company liquidity of $1.9 billion at February 29, 2020. Jefferies Group continues to maintain a large liquidity buffer of $6.4 billion of cash and unencumbered liquid collateral at February 29, 2020, which represents 14% of its total balance sheet.

Rich Handler, CEO, and Brian Friedman, President, said that the first quarter reflects record performance in mergers, acquisitions and advisory, solid results in equity underwriting and better performance in debt underwriting, with broad contribution from sector teams and regional presence.

Mr Handler and Mr Friedman noted the recent lightspeed change in the economy and financial markets.

“While waiting for conditions to improve for more traditional transactions, we are pivoting to more actionable investment banking solutions that are possible due to our full service capabilities, such as rescue financings, rights offerings, restructurings and alternative methods of getting much needed liquidity to our clients”, Mr Handler and Mr Friedman said.

“The three week initial shock of the economic shutdown has adversely affected our Equities, Fixed Income and Asset Management businesses. More recently, those businesses have begun to stabilize”, Mr Handler and Mr Friedman added.

Jefferies Group’s securities inventory and asset management investments remain diversified and the aggregate of all mark-to-market losses recognized to date have been reasonable, according to the Group’s CEO and President.

“We have already experienced some rebound from the lowest levels last week”, they said.

Separately, Jefferies announced that having completed the repurchase of shares under the previous authorization, the Board of Directors has approved a share repurchase authorization of $100 million. Shares may be repurchased by Jefferies from time to time in the open market, through block trades or otherwise.

In addition, the Jefferies Board of Directors declared a quarterly cash dividend equal to $0.15 per Jefferies common share payable on May 29, 2020 to record holders of Jefferies common shares on May 18, 2020.

Read this next

Digital Assets

BlackRock digs further into crypto with metaverse ETF

BlackRock, the world’s largest asset manager with almost $10 trillion in AUM, is set to launch a new metaverse ETF to help investors securely monetize on the booming immersive version of the internet.

Digital Assets

Binance wins license in New Zealand as rival Huobi shutters derivatives

Binance, the world’s largest crypto exchange by traded volume, has obtained licenses to operate in New Zealand, even after rival Huobi shutdown derivatives trading last month due to concerns about regulations.

Retail FX

Hong Kong busts perpetrators of ‘ramp and dump’ scam

Hong Kong’s financial watchdog, the Securities and Futures Commission (SFC), has charged thirteen suspects of market manipulation in a joint operation with the local police.

Institutional FX

TradingView integrates market data from German Tradegate exchange

TradingView announced that it ‎has increased data coverage to allow its users to receive information from ‎and get free access to the intra-day and tick data from Tradegate Exchange.

Retail FX

Spotware Systems introduces Custom Push Notifications for cTrader mobile apps

Spotware Systems, a technology provider for the electronic trading industry, is introducing a new push notification feature to alert mobile users of price swings and market fluctuations through their cTrader app.

Market News

The Week Ahead: 30 September from David Madden, Market Analyst at Equiti Group

Sterling dominated the headlines last week, as there were concerns the UK government might struggle to service its debt.

Inside View

How does the quality of signal providers affect your business?

A must-have onboarding process for brokers with investment services like PAMM, MAM, or copy trading

Technology

DBS deploys Nasdaq Trade Surveillance

“The confidence that markets and our clients have in DBS as a safe and trusted banking group is anchored on our ability to detect and respond to anomalous activity, which in turn calls for a robust surveillance and prevention infrastructure.”

Industry News

SEC charges Justin Costello and David Ferraro for securities fraud and posing as billionaire veteran

The Securities and Exchange Commission charged Cannabis executive Justin Costello and David Ferraro, an associate of Costello’s, for promoting the stock of several microcap companies on social media without disclosing their own simultaneous stock sales as market prices rose.

<