(3 August 2010−Australia) Macquarie Group has warned of lower than expected earnings, as three of the group’s major businesses struggle in the current environment.The investment bank, who remained unscathed during the GFC, has said that in an effort to regain its competitive advantage it would use its large balance sheet to do more corporate lending.
At the end of last week the investment banks balance sheet received a boost after its A$29 billion cash management trust was transferred to the bank’s balance sheet in an effort to free up more working capital.
Macquarie Group’s chief executive officer, Nicholas Moore, said in an interview with The Australian newspaper that despite the earnings warning the bank was well positioned to expand its investment banking business in Australia and key markets offshore.
That doesn’t mean all of that cash is available, being a prudent organisation. But Macquarie has a strong balance sheet, Mr Moore said.
Looking at the medium-term outlook, the investment bank has been successful over 40 years, Mr Moore added.
History shows, when markets have pulled back, Macquarie Group stepped up and as a result we have also found that clients appreciate it when you are there for them when the times are difficult. This is a time of growing for us, Mr Moore commented.