(6 May 2013 – Australia) Macquarie Group beat market expectation on Friday, posting full-year profits of A$851 million – a 17 percent increase.
Analysts had estimated Macquarie would make cash earnings of A$820 million, however a sharp rise in second half profits helped the investment bank exceed the line.
Expenses were down 10 percent compared with a year earlier, mainly because of an 8 percent fall in employment costs.
Over the year to March, the Australian share market jumped 15 percent, boosting Macquarie's suite of businesses that face the capital markets and helping its earnings to jump by 36 percent in the latest half.
Macquarie remained cautious on the outlook for profits, saying the group expected an improvement over the year ahead, provided conditions did not worsen.
Key reasons for Macquarie’s bounce in profits included a 19 percent jump in trading income to A$1.23 billion, which occurred mainly in its fixed income, currency and commodities businesses.
With the group seeking to cut its reliance on volatile market-facing businesses, earnings from its annuity-style funds management rose 17 percent, to A$755 million.
The corporate and asset finance arm made broadly flat profits of A$694 million, while its banking arm saw earnings rise 22 percent to A$335 million.
Macquarie Capital, its flagship investment banking arm, posted a 76 percent rise in earnings to A$150 million, but continued to be challenged by low levels of merger and acquisition activity.
Stockbroking arm Macquarie Securities made a loss of A$50 million, compared with A$194 million a year earlier.
The retirement of Group Head of Banking and Financial Services; Peter Maher, was also announced. He will be replaced by Greg Ward, the executive credited with driving Macquarie’s push into the mortgage sector with Yellow Brick Road.