Raymond James first-quarter profit falls on weak capital markets business, high costs

Jan 28 (Reuters) - Raymond James Financial RJF.N reported a fall in first-quarter profit on Wednesday as weakness in its capital markets business outweighed growth in its asset management division.

The company said it generated lower mergers and acquisitions and advisory revenue, even as other investment banks benefited from a strong dealmaking pipeline in the reported quarter.

"While investment banking revenues were lower in the fiscal first quarter largely due to the timing of closings, the pipeline remains strong," Raymond James said in a statement.

Quarterly net revenue from capital markets fell 21% from the year earlier to $380 million.

Shares of the company, which have gained about 3.4% in 2025, were down marginally in trading after the bell.

Optimism around artificial intelligence-linked stocks and rate cuts from the U.S. Federal Reserve have fueled a record market rally, bringing in more fees for asset managers such as Raymond James.

A rallying stock market helps asset managers as higher stock prices lift assets under management, raking in more in fees without inflows.

Total non‑interest expenses rose 8% from a year earlier to $3.01  billion, driven by higher compensation costs.

The company's asset management revenue rose 11% to $326 million from the year-ago period.

Revenue from its private client group - the company's biggest source of revenue - rose 9% to $2.77 billion. The unit provides specialized financial services such as wealth management to high-net-worth individuals, families and businesses.

Profit in the quarter was $562 million, or $2.79 per share, compared with $599 million, or $2.86 per share, a year earlier.