Raymond James Q4 earnings rise despite subdued investment banking performance

Raymond James Financial, Inc. (NYSE:) posted its Q4 fiscal 2023 earnings, revealing a mixed financial picture. The firm reported earnings of $2.13 per share, a 2% year-on-year (YoY) increase, albeit falling short of the consensus estimate. This growth was primarily driven by higher interest rates and an uptick in loan demand.

Net revenues for the quarter were $3.05 billion, exceeding estimate and marking an 8% YoY growth. For fiscal 2023 as a whole, net revenues climbed 6% to reach $11.62 billion, surpassing consensus estimates.

The firm’s assets under management also saw substantial growth during this period. Client assets under administration jumped by 15%, while financial assets under management increased by 13%. RJ Bank’s net revenues experienced a modest 5% growth, while the Private Client Group reported a robust 14% rise in revenues.

However, not all areas of the company’s operations fared as well. Capital Markets witnessed a significant 15% decline in revenues, reflecting a subdued investment banking performance. Moreover, non-interest expenses escalated to $2.47 billion during the fiscal year.

The company also set aside $36 million as a provision for credit losses. Despite these challenges, Raymond James repurchased 8.35 million shares during fiscal 2023 and still has nearly $750 million remaining under its buyback authorization.

In terms of key financial metrics for fiscal 2023, total assets stood at $78.36 billion, book value per share was pegged at $48.54, return on common equity reached 17.3%, total equity amounted to $10.14 billion, and the total capital ratio was recorded at 22.8%.

Despite some headwinds in its investment banking segment and rising expenses, Raymond James’ growth in net revenues and the successful expansion of its client and financial assets under management demonstrate its resilience amid changing market conditions.

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