By Pritam Biswas and Lananh Nguyen
(Reuters) -Investment bank Lazard reported a rise in fourth-quarter profit on Thursday owing to a strong performance in its advisory business, which benefited from an industry-wide resurgence in dealmaking as borrowing costs eased after two years.
Its shares, which jumped 48% in 2024, were up nearly 8% in thin trading before the bell.
Interest-rate cuts by the Federal Reserve and expectations of a friendlier regulatory environment for deals and offerings under U.S. President Donald Trump’s administration have improved sentiment among bankers.
Results for Wall Street’s leading banks in the second half of 2024 were improved by a rebound in mergers and acquisitions and renewed activity in the equity and debt markets.
Mirroring the trend, Lazard also reported a 6% rise in financial advisory revenue on an adjusted basis in the last three months of 2024, to $508 million over the previous year.
“We’re in the midst of a lot of different discussions, suggesting that activity is really picking up,” CEO Peter Orszag said in a conference call.
Orszag, who previously served as director, Office of Management and Budget, in the Obama administration, said he was encouraged by Trump’s moves on economic policy and personnel so far.
“We anticipate the M&A cycle will continue to develop with tailwinds that remain strong and a potentially much more favorable regulatory antitrust environment… The overall message that the (Trump) administration is trying to send to the business community is that they’re open for business,” he said.
Robust performance in their investment banking units also helped larger Wall Street rivals beat fourth-quarter profit estimates.
Goldman Sachs earned its biggest quarterly profit in more than three years, while JPMorgan Chase posted record annual profit.
Lazard aims to add 10 to 15 managing directors each year through 2030, according to its earnings presentation. Its advisory unit already has about 200 managing directors.
The bank’s asset management revenue also climbed 5% on an adjusted basis, helped by strong equity markets and a rally following Trump’s election win.
However, its asset management business saw net outflows of $7.5 billion in August, after one of its clients switched to a passive investing strategy, Reuters reported in September 2024.
The bank closed the reported quarter with $234 billion in assets under management on average, the same levels as the previous year.
BlackRock, the world’s largest money manager, posted a jump in quarterly profit earlier in the month, with its assets touching a record high of $11.6 trillion.
