Jan 8 Reuters Jefferies Financial Group reported a smallerthanexpected fourthquarter profit on Monday, as lingering economic uncertainty kept dealmaking in check, sending its shares down more than 3 in extended trading.

Investment banks struggled last year as rising interest rates and economic gloom weighed on companies39; confidence. The uncertainty stalled global mergers and acquisitions, which hit a decadelow.

Still, Jefferies posted investment banking revenue of 2.29 billion for 2023, above levels in 2019, the last normal year for investment banking, CEO Richard Handler and President Brian Friedman said in a statement.

You39;ve got building momentum, Jefferies President Brian Friedman said in an interview.

There39;s a lot of reason to believe that MA activity will pick up this year from low levels in 2023, along with initial public offerings, he said.

In the fourth quarter, the company39;s investment banking revenue rose 2.5 to 576.7 million, driven by strong performance in equity and debt underwriting, while capital markets revenue fell 1.8 to 481.3 million due to weaker fixed income performance.

Total quarterly net revenue tumbled nearly 17 to 1.20 billion, missing expectations of 1.24 billion, according to LSEG data.

Profit fell 53 to 65.6 million, or 29 cents per share, in the three months ended Nov. 30, compared with analysts39; average estimate of 34 cents per share.

The biggest decline came from asset management, where revenue plunged nearly 64 from…