Macquarie six month profit drops
(31 October 2011 – Australia) Macquarie Group issued another downbeat profit outlook with a 24 percent drop in first-half earnings, posting A$305 million in the six months to 30 September.
Three of Macquarie's traditional powerhouse businesses - including investment banking and securities trading - reported either a loss for the September half or were barely profitable.
Net operating income dropped 11 percent from the previous corresponding period to $3.24 billion. Much of this was due to a 38 percent slide in trading income during the half.
Even with signs that Europe is coming to a resolution on its deep financial problems, Macquarie chief executive Nicholas Moore holds little hope for a turnaround in performance in the near term.
''Market conditions continue to be really challenging. Should those market conditions continue like that for the remainder of the year, our full-year result will be down on where we were last year,'' Mr Moore said.
If markets and global confidence were to improve, Macquarie's profit would at best be flat on last year's A$956 million, he said.
Nevertheless, Macquarie shares rallied on the bank's announcement that it would undertake an on-market buyback of as much as 10 percent of its shares, its first return of capital since 2004.
This means it will buy back as much as A$880 million of its shares to help keep investors onside.
Since the financial crisis, Macquarie has shed its infrastructure management business to focus on bulking up its annuity-style businesses such as wealth management, corporate and asset finance.
Net operating income dropped 11 percent from the previous corresponding period to $3.24 billion. Much of this was due to a 38 percent slide in trading income during the half.
Even with signs that Europe is coming to a resolution on its deep financial problems, Macquarie chief executive Nicholas Moore holds little hope for a turnaround in performance in the near term.
''Market conditions continue to be really challenging. Should those market conditions continue like that for the remainder of the year, our full-year result will be down on where we were last year,'' Mr Moore said.
If markets and global confidence were to improve, Macquarie's profit would at best be flat on last year's A$956 million, he said.
Nevertheless, Macquarie shares rallied on the bank's announcement that it would undertake an on-market buyback of as much as 10 percent of its shares, its first return of capital since 2004.
This means it will buy back as much as A$880 million of its shares to help keep investors onside.
Since the financial crisis, Macquarie has shed its infrastructure management business to focus on bulking up its annuity-style businesses such as wealth management, corporate and asset finance.
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