October 19, 2011 / 9:10 PM / 7 years ago

UPDATE 2-Raymond James profit flat, market volatility weighs

* Net revenue up 9 percent to $817.8 million

* Shares down 2 percent (Adds details on quarterly results, analyst’s comment)

By Ashley Lau

Oct 19 (Reuters) - Regional U.S. brokerage Raymond James Financial Inc (RJF.N) reported fiscal fourth-quarter net income that was roughly flat from a year earlier as market volatility weighed on its capital markets segment.

The investment bank and brokerage, based in St. Petersburg, Florida, reported a net income of $68.9 million, or 54 cents a share, in the quarter ended Sept. 30, compared with $69.1 million, or 55 cents, a year earlier.

Analysts, on average, expected Raymond James to earn 54 cents a share, according to Thomson Reuters I/B/E/S.

Net revenue rose 9 percent to $817.8 million.

Chief executive Paul Reilly cited a “challenging” environment for the company’s capital markets sector, which dropped 82 percent in pretax income from last year.

“Their business is very sensitive to the markets, and that will definitely weigh and play into the forward outlook,” said Devin Ryan, managing director at Sandler O’Neill & Partners L.P. in New York.

“But it’s encouraging to see them continue to post solid results in what was as tough an economic environment as it gets,” he said.

Raymond James’ private client group, its wealth advisory and retail brokerage business, posted a 34 percent increase in pretax income from last year.

Client assets rose 2.8 percent to $256 billion, and the ranks of financial advisers rose by 23 advisers to 5,113.

RJ Bank, the company’s bank subsidiary, reported a pretax income of $42,180 million, up 54 percent from a year ago. RJ Bank in June agreed to buy nearly all the assets of Allied Irish Bank’s ALBK.I Canadian operations, adding $650 million in loan commitments.

Last month Raymond James agreed to pay more than $2.1 million to resolve claims by the Financial Industry Regulatory Authority that it charged excessive commissions on stock trades to nearly 16,000 accounts.

Shares of Raymond James, down 13 percent this year, fell 2 percent to $27.87 in Wednesday trading on the New York Stock Exchange. (Reporting by Ashley Lau)

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