Macquarie expecting 25% profit drop
(8 February 2012 – Australia) Australia’s biggest investment bank, Macquarie Group is expecting a 25 percent drop in net profit for the year as weak markets hit trading and investment banking businesses.
The bank said it had cut 460 staff since September 30, half of them in Australia, bringing the total job losses over the past year to about 1,000.
Separately, Macquarie Group said it would start a buy-back of 10 percent of its shares next financial year. The buyback will be subject to regulatory approval.
'Global economic uncertainty has deepened since October 2011, with substantially lower levels of client activity in many markets' Macquarie said in a trading update.
With its key trading and investment banking business struggling, Macquarie had previously said it expected earnings in the year to March to be lower than last year's net profit of A$956 million.
Macquarie missed estimates with a 24 percent fall in first-half profits to A$305 million, putting it on course for a third annual profit fall in four years.
In terms of the second half of fiscal 2012, which ends on March 31, Macquarie said net profit was expected to be about 25 percent lower than the prior corresponding period.
Second-half net profit was tipped to come in 35 percent higher than what was achieved in the first half, Macquarie said.
Macquarie chief executive Nicholas Moore said the global economic uncertainty had deepened and resulted in ‘‘substantially lower levels of client activity in many markets’’.
Moore said Macquarie’s annuity-style businesses - Macquarie Funds, Banking and Financial Services and Corporate and Asset Finance - continued to perform in line with expectations.
Separately, Macquarie Group said it would start a buy-back of 10 percent of its shares next financial year. The buyback will be subject to regulatory approval.
'Global economic uncertainty has deepened since October 2011, with substantially lower levels of client activity in many markets' Macquarie said in a trading update.
With its key trading and investment banking business struggling, Macquarie had previously said it expected earnings in the year to March to be lower than last year's net profit of A$956 million.
Macquarie missed estimates with a 24 percent fall in first-half profits to A$305 million, putting it on course for a third annual profit fall in four years.
In terms of the second half of fiscal 2012, which ends on March 31, Macquarie said net profit was expected to be about 25 percent lower than the prior corresponding period.
Second-half net profit was tipped to come in 35 percent higher than what was achieved in the first half, Macquarie said.
Macquarie chief executive Nicholas Moore said the global economic uncertainty had deepened and resulted in ‘‘substantially lower levels of client activity in many markets’’.
Moore said Macquarie’s annuity-style businesses - Macquarie Funds, Banking and Financial Services and Corporate and Asset Finance - continued to perform in line with expectations.
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