FINANCIALS: JEF Results: Good For Equity Houses, Less For FICC

Jefferies (JEF: Baa2/BBB/BBB+) 2Q24 results were out last night (3M to May-24) which were marginally ahead of consensus. The laterals look more positive for equity-linked businesses (MS, UBS) vs. the FICC flow businesses (DB, C, BACR)

• Not a EUR issuer but always a good forward indicator for global investment bank (IB) reporting. That said, revenues came in 4% ahead of consensus, costs were 8% weaker but that still meant pre-tax was 9% ahead of expectations – so, good.
• Key IB lines: the clear highlights were in the equities business. ECM and equity trading were both well ahead of consensus (21% and 31%, respectively). FICC was also ahead but DCM and M&A advisory both missed. 
• Obvious laterals: growth by product nominal (y/y) are below which lean very much towards positive for the equity houses (Morgan Stanley, UBS) with a much more muted performance for the FICC flow houses (Deutsche, Citigroup, Barclays):
     FICC:                      +2%
     Equity trading         +46%
     M&A                       +12%
     DCM                      +129%
     ECM                       +68%