(Reuters) - Lazard Ltd (LAZ.N) reported a higher-than-expected quarterly profit, mainly driven by growth in its financial advisory business as cross-border mergers and acquisitions got off to the strongest start in a decade.
Lazard was involved in several big cross-border deals in 2017, including Johnson & Johnson's $30 billion acquisition of Swiss biotechnology company Actelion and Harman's $8.7 billion buyout by Samsung.
Optimism over U.S. President Donald Trump's economic agenda buoyed the stock market and the dollar, making foreign acquisitions cheaper than some U.S. targets.
Cross-border M&As totaled $323.1 billion as of March end this year, the highest level since 2007, accounting for 45 percent of total M&A activity, according to preliminary Thomson Reuters data.
"We've increased our market share in M&A globally, with especially high levels of activity in Europe," Chief Executive Kenneth Jacobs said on a post-earnings call with analysts.
The first half of 2017 continues to look strong relative to last year, he said.
Lazard, often seen as a bellwether for the M&A advisory industry, said earnings from its financial advisory business surged 26.2 percent to $335.8 million in the first quarter ended March 31.
The company's shares fell 2.9 percent to $43 late Thursday afternoon.
Lazard also benefited from a strong performance in its asset management business, which the company has been building up to diversify its revenue stream.
Revenue from the asset management business rose 16.2 percent to $278.4 million, accounting for about 40 percent of the total revenue.
Global investment banking fees reached a 10-year high in the first quarter of 2017 with more than half of the $24 billion in total takings coming from North America, according to Thomson Reuters data.
Net income attributable to Lazard rose to $107.6 million, or 81 cents per share, in the quarter, from $66.8 million, or 50 cents per share, a year earlier.
On an adjusted basis, the company earned 83 cents per share, beating the average analyst estimate of 79 cents, according to Thomson Reuters I/B/E/S.
Total revenue rose nearly 25 percent to $637.4 million.
Reporting by Nikhil Subba in Bengaluru; Editing by Saumyadeb Chakrabarty and Sriraj Kalluvila