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(Bloomberg) — Macquarie Group Ltd.’s profit fell short of expectations as tepid activity at its key commodities and global markets division offset a rebound in investment banking at the Australian finance giant.
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Net income rose 3% to A$1.66 billion ($1.1 billion) in the six months through Sept. 30 from a year earlier, according to a statement on Friday. That compared with the A$1.8 billion average estimate of analysts surveyed by Bloomberg.
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The contribution from commodities and global markets sank 15% on higher operating expenses due to increased investment in its platform and remediation-related spending, the bank said. Merger activity buoyed a strong performance for Macquarie Capital.
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Chief Executive Officer Shemara Wikramanayake has previously flagged caution over its commodities unit, and Bloomberg has reported that investors were bracing for a further slowdown as a slew of traders exited amid a decline in its US energy business. Still, the pickup in investment banking activity chimed with the recent strength seen in US bank earnings, where deals and rising trading revenue buoyed firms including JPMorgan Chase & Co. and Bank of America Corp.
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Macquarie this year faced investor criticism after a series of lapses in risk management, and over its compensation plan for senior executives.
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Macquarie Asset Management delivered a 43% increase in net profit contribution, driven by higher performance fees. Growth in its home loan portfolio and deposits lifted profit within its banking and financial services wing.
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Meantime, the firm is extending its current buyback of up to A$2 billion in stock for a further 12 months. Macquarie is about half way through purchasing the shares and this gives it more flexibility to manage its capital position, the bank said.
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The firm employed 19,821 people at the end of September, in line with its headcount six months prior.
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(Adds detail from third paragraph on drivers of profit)
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English (US)