Raymond James reports quarterly profits of $ 2.5 billion

Raymond James Financial posted $ 2.5 billion in net revenues and $ 307 million in net profit in the second quarter of 2021. The company assigned these figures record-breaking asset management fees and investment banking revenues.

“Our strength in our complementary and diversified business enabled us to achieve record results in the first nine months of the fiscal year, including record net income and pre-tax income in our Private Client Group, Capital Markets and Asset Management segments,” says Chairman and CEO Paul Reilly in statement. “We are well positioned to enter fiscal fourth quarter with records for customer assets, number of financial advisors, financial assets under management and net lending at Raymond James Bank. Moreover, recruiting financial advisers and investment banking remain strong.

Raymond James ended the quarter with a record 8,430 financial advisers, a net increase of 258 compared to the prior year and 86 more than in the previous quarter, Reilly said in Thursday’s earnings report.

“The recruitment of consultants has been solid even in this very competitive market,” he said. “With a strong recruiting process, we are on track for a record fiscal recruiting year as our platform continues to attract potential advisers in all affiliation options, including technology-leading, our advisor and customer-centric culture. These recruiting results are above all good given the highly competitive market of experienced advisers. “

Raymond James’s group of private customers generated record quarterly net revenues of $ 1.7 billion, reflecting significant operating leverage over the past year, Reilly said. The Asset Management segment generated record net revenues of $ 225 million and record income before taxes of $ 105 million.

“These results are mainly due to an increase in financial assets under management driven by the appreciation of the stock market and net inflows to accounts payable in the private client group, partially offset by modest quarterly net outflows. [of] Carillon Towers, after a solid quarter of net revenues in the second fiscal quarter, Reilly said.

Financial assets under management ended at a record $ 191 billion and bank asset balances at a record $ 29 billion, Devin Ryan, a research analyst at JMP, said in a statement.

“The credit environment is also improving, with a credit loss benefit of $ 19 million, compared to our benefit estimate of $ 9 million. NIM (Net Interest Margin) has shrunk somewhat to 192 basis points (basis points), as expected, although we expect the higher balances to more than offset, ”says Ryan. “Ultimately, we are generally encouraged by major trends, and we would characterize the revenue impact as slightly better than previously modeled.”

Raymond James also announced on Thursday that he intends to bid $ 387 million to British company Charles Stanley Group PLC. The transaction is to be closed in the fourth calendar quarter of 2021.

“Charles Stanley is a long-standing company with an incredible reputation, 200 years of tradition, and a pool of talented asset managers and professionals. The two companies share a common and increasingly rare customer-centric approach, where the primary relationship with the customer is held by individual asset managers, ”Reilly told Revenue. “This merger with Charles Stanley would provide the opportunity for further accelerated growth in the UK, the second largest English-speaking wealth management market.”

According to the statement, nearly 200 Charles Stanley wealth managers will join Raymond James’s new UK employee ownership model.

“Raymond James does not expect the acquisition to result in significant restructuring or the need for staff reductions in any of the companies,” the company writes in a statement.

“Raymond James has been in the UK for over 20 years, but historically his contribution has been a small fraction of the overall private customer business,” says Ryan. With this in mind, Raymond James focused on developing his ‘undersized’ business in the UK. Charles Stanley fits the culture perfectly, and the deal should also accelerate growth for both companies on a stand-alone basis, especially given Raymond James’s newly introduced employee ownership model in the region. “

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