Macquarie profit cut in half
(4 May 2009 – Australia) Macquarie group has announced a 52 percent drop in full year net profit, to A$871 million.
Australia’s biggest investment bank, Macquarie Group, just like the big Australian banks, saw profits hit by significant write-downs, due to continued market deterioration.
Macquarie said that write-downs of A$2.5 billion were recorded for the year due to continued deterioration of markets and provisions on long-term investments.
Macquarie Group managing director and chief executive officer, Nicholas Moore said that Macquarie’s substantial write-downs were provisions related to strategic long-term investments in Macquarie-managed funds which align Macquarie’s interests with those of other fund investors.
Moore said that the group’s strong funding and balance sheet position was further strengthened in the second half, with an increase in cash and liquid assets, term funding and strong growth in deposits.
Cash and liquid assets for the group reached A$30.3 billion at 31 March 2009, up by nearly 50 percent from the level of A$20.8 billion from one year ago. Also, Macquarie’s capital of A$10.2 billion is A$3.1 billion in excess of its minimum capital regulatory requirement.
The bank reported that total operating income from ordinary activities for the year decreased 33 percent to $A5.5b compared with last year. Before provisions, operating income declined by a lesser 14 percent to A$7.6 billion.
While all of Macquarie’s operating groups were down on prior year results, the two banking specific units recorded losses for the year. The Real Estate Banking Division made a loss of A$356 million due to write-downs, equity losses and provisions, including real estate equity investments and real estate loans.
Also, the Banking and Financial Services Group recorded a loss of A$99 million driven by the sale of Italian mortgages. With a cash focus for this group, retail deposits jumped 103 percent on last year, on the back of cash management and internet banking product launches.
Macquarie said that write-downs of A$2.5 billion were recorded for the year due to continued deterioration of markets and provisions on long-term investments.
Macquarie Group managing director and chief executive officer, Nicholas Moore said that Macquarie’s substantial write-downs were provisions related to strategic long-term investments in Macquarie-managed funds which align Macquarie’s interests with those of other fund investors.
Moore said that the group’s strong funding and balance sheet position was further strengthened in the second half, with an increase in cash and liquid assets, term funding and strong growth in deposits.
Cash and liquid assets for the group reached A$30.3 billion at 31 March 2009, up by nearly 50 percent from the level of A$20.8 billion from one year ago. Also, Macquarie’s capital of A$10.2 billion is A$3.1 billion in excess of its minimum capital regulatory requirement.
The bank reported that total operating income from ordinary activities for the year decreased 33 percent to $A5.5b compared with last year. Before provisions, operating income declined by a lesser 14 percent to A$7.6 billion.
While all of Macquarie’s operating groups were down on prior year results, the two banking specific units recorded losses for the year. The Real Estate Banking Division made a loss of A$356 million due to write-downs, equity losses and provisions, including real estate equity investments and real estate loans.
Also, the Banking and Financial Services Group recorded a loss of A$99 million driven by the sale of Italian mortgages. With a cash focus for this group, retail deposits jumped 103 percent on last year, on the back of cash management and internet banking product launches.
Subscribe