On January 30 (Reuters) - Lazard, an investment bank, announced an increase in fourth-quarter profits on Thursday. This rise was driven by a strong performance in its advisory business, benefiting from a resurgence in dealmaking across the industry as borrowing costs eased after two years.
With shares that soared by 48% in 2024, the company saw nearly an 8% increase in trading just before the market opened.
Factors such as interest rate cuts by the Federal Reserve and the anticipation of a more favorable regulatory environment for deals and offerings under U.S. President Donald Trump's administration have positively impacted sentiment among bankers.
Lazard, reflecting the industry trend, noted a 6% rise in financial advisory revenue on an adjusted basis in the final quarter of 2024, totaling $508 million compared to the previous year.
CEO Peter Orszag mentioned during a conference call, We're in the midst of a lot of different discussions, suggesting that activity is really picking up.
Orszag, a former director of the Office of Management and Budget under the Obama administration, expressed optimism about Trump's economic policy changes and key appointments: 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 administration is sending to the business community is that they are open for business.
Lazard plans to recruit 10 to 15 managing directors annually through 2030, according to its earnings report. The bank currently has about 200 managing directors in its advisory unit.
The bank's asset management revenue also rose 5% on an adjusted basis, boosted by robust equity markets and a post-Trump election rally.
However, Lazard's asset management business experienced a setback in August when a client shifted to a passive investing strategy, as reported by Reuters in September 2024.
By the end of the quarter, the bank managed $234 billion in average assets under management, maintaining consistent levels from the previous year.
BlackRock, the world's largest asset manager, announced earlier in the month that its assets reached a record-high of $11.6 trillion.
Ending the year, Lazard reported a net income of $85 million, or 78 cents per share, on an adjusted basis for the three months ended December 31, contrasting with $65 million, or 66 cents per share, during the same period a year earlier.