June 24 (Reuters) - Jefferies Financial Group said on Wednesday its profit more than doubled in the second quarter, as the investment bank earned higher fees from advising on deals and underwriting share sales.
The results give investors an early glimpse into second-quarter investment banking trends on Wall Street, with large U.S. banks poised to provide a broader picture in coming weeks.
Dealmaking on Wall Street has remained strong in 2026 despite geopolitical headwinds, as confidence holds steady
and boardrooms take a long-term view, striking acquisitions in the chase for scale.
Global mergers and acquisitions volumes have exceeded $2.8 trillion this year, Dealogic data showed, driven by technology, healthcare, and utility and energy sectors.
"We continue to make progress in building our corporate M&A business, while staying focused on our historical areas of strength in sponsor-led activity," Jefferies CEO Richard Handler and President Brian Friedman said in a statement.
"The new issue market remains resilient. We continue to be optimistic about the second half of 2026, given the strength of our current backlog and new business bookings."
Advisory revenue surged 47% to a record $674.1 million in the quarter, while investment banking net revenues jumped 57.5% year-over-year to a record $1.21 billion.
Among notable deals announced during the quarter, Jefferies advised India's Sun Pharmaceutical on its $11.75 billion acquisition of U.S. drugmaker Organon. It also advised Kelonia Therapeutics on its sale to U.S. drugmaker Eli Lilly for up to $7 billion.
Profit attributable to common shareholders was $226.2 million, or $1.02 per share, in the three months ended May 31, compared with $88 million, or 40 cents per share, a year ago.
EQUITIES BUSINESSES SHINE
Equity capital markets activity also accelerated in the quarter as the new issuance held up well, while private equity firms cashed out of portfolio companies through secondary offerings.
Revenue from equity underwriting more than tripled to $370.7 million in the quarter, buoyed by strong activity across sectors.
Jefferies served as joint global coordinator on the $6.3 billion share sale in Swiss skincare company Galderma by a group of shareholders in March, the largest sponsor-backed block trade ever.
It also served as bookrunner on large U.S. IPOs during the quarter, including nuclear reactor developer X-Energy and aerospace parts maker Arxis.
Persistent volatility has also lifted trading revenue at Wall Street banks as investors rejig portfolios to hedge against risks.
Jefferies' capital markets business, which houses its trading desks, posted $799.3 million in revenue, up 13.5% from a year earlier.
Equities trading led the way with a 14% jump to a record $600.8 million for the quarter, while fixed income revenue grew 12%.
The results come as Jefferies looks to move past a rough period, after its exposure to the high-profile collapses of British lender Market Financial Solutions and U.S. auto-parts supplier First Brands raised scrutiny about its lending standards.
The stock has rallied in recent months and recouped most of its losses for the year as focus shifted to capital markets momentum.
(Reporting by Pragyan Kalita and Arasu Kannagi Basil in Bengaluru; Editing by Vijay Kishore)
