This is shaping up to be the year of the mega deal for Wall Street bankers.

Thus far, companies have announced 49 global M&A transactions valued at more than $10 billion, according to Mergermarket, the highest such count for so-called mega deals through the first nine months of any year ever.

These transactions include the $55 billion leveraged buyout of Electronic Arts (EA) announced Monday, Union Pacific's (UNP) $85 billion merger with rival railroad Norfolk Southern (NSC) in July, and Google's (GOOG) $32 billion acquisition of cloud security firm Wiz unveiled in March.

Some of the biggest investment banks on Wall Street are benefiting from the frenzy.

The latest example came Monday when Jefferies Financial Group (JEF) said it pulled in a record level of revenue — $655.6 million — from advising clients on mergers and acquisitions during a three-month period ending in August.

That was a 10% jump compared with the firm's M&A business during the same period last year.

Jefferies CEO Richard Handler described the mood at the bank as "increasingly optimistic" in a statement on the firm's quarterly results.

"We are encouraged by the rebound in global market sentiment," Handler added.

The results are a good sign for bigger banks such as Goldman Sachs (GS), JPMorgan Chase (JPM), Morgan Stanley (MS), Bank of America (BAC), and Citigroup (C), which plan to release their own third quarter earnings in the coming weeks.

The stocks of these banks have rallied for most of this year, thanks largely to trading, dealmaking, and brokerage services. Many major banks expect their dealmaking fees to climb higher due to increased activity during the third quarter.

Global announcements for M&A deals measured in dollars surged to $1.22 trillion since the beginning of July, according to Dealogic data.

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That's $345 billion more deal volume compared to the third quarter of last year and the highest third quarter for M&A since 2021.

"We're not finished yet with September, but I would think we're gonna have a good investment banking quarter," Bank of America CFO Alastair Borthwick said at a financial services conference earlier this month.

In both its investment and trading divisions, "the teams are quite busy, and we feel great," Doug Petno, co-head of JPMorgan's commercial and investment bank, said at the same conference.

At Jefferies, total investment banking revenue for the company's third quarter climbed to $1.1 billion, a 20% increase from the third quarter of last year. Its profits for the same period climbed 38% to $242 million.

The company saw its biggest increase in investment banking revenue come from its bond underwriting division, which jumped 36% from the year-ago period to $249 million.

Jefferies' earnings also reminded investors that a better quarter for dealmaking also means heftier compensation expenses. The bank's expenses from compensation and benefits rose by $228 million from the previous quarter to $1.08 billion.

Its firm-wide compensation ratio also ticked higher, from 52.3% to 52.9%, over the period.

JPMorgan's Petno also pointed out weeks ago that its compensation expenses should also rise.

"You're going to see higher performance-related expenses, as we call them good expenses," he added.

David Hollerith covers the financial sector, ranging from the country's biggest banks to regional lenders, private equity firms, and the cryptocurrency space.

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