Jefferies Takes $30 Million Hit on First Brands as Profit Drops

Jefferies Financial Group Inc. posted a drop in quarterly profit as the bank took a $30 million pre-tax loss tied to the collapse of auto-parts supplier First Brands Group.

Net earnings for the fiscal fourth quarter declined 7.2% from a year earlier to $191 million, Jefferies said in a statement Wednesday.

While results were buoyed by a comeback in dealmaking and trading activity, the company’s asset-management operation incurred losses tied to First Brands, which filed for bankruptcy last year. Jefferies owns a 6% interest in a fund called Point Bonita, which had more than $700 million invested in receivables due ...