KCG Kcg Holdings Class A

Jefferies Group LLC posted profit and revenue increases in its third quarter as the impact of the Brexit vote was limited but new stock and bond issuance slowed.

The investment-bank unit of Leucadia National Corp. reported a profit of $41.2 million, up significantly from a profit of $2.1 million in the year-ago period, which was hit by turmoil in its oil and gas business. Net revenue, which factors out interest expenses, grew 13% to $654.5 million.

"Aside from a volatile two-week period following the unexpected outcome of the U.K. 'Brexit' referendum in June, fixed income and equity secondary market conditions remained reasonably steady for much of the third quarter," Chief Executive Brian Friedman said, referring to the June referendum where the U.K. voted to leave the European Union.

Trading revenue jumped 86% to $343.6 million, due to a gain in bond-trading revenue that was partially offset by declines in equity trading. Bond-trading revenue was accounted for as negative in the period last year because the company was selling off assets. Jefferies also was helped by additional markup on two large equity positions, including its stake in market maker KCG Holdings Inc. Still, the markup was only $2 million, compared with one of $60 million in the second quarter and a related loss of $66 million in the quarter last year.

Jefferies is viewed by some investors as a preview of results for the largest U.S. banks, even though its quarter ends a month earlier.

Investment banking net revenues declined 24% to $294.9 million on a "slower" environment for new stock and bond issuance.

Expenses rose 0.3% as a decrease in non-compensation expenses was offset by increased labor costs.

Write to Austen Hufford at austen.hufford@wsj.com

(END) Dow Jones Newswires

September 20, 2016 08:15 ET (12:15 GMT)

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