By Robb M. Stewart
MELBOURNE, Australia--Macquarie Group Ltd. (MQG.AU) flagged it remains on track for a seventh straight year of earnings growth as its markets-facing operations continue to contribute strong growth.
Australia's biggest investment bank and asset manager on Tuesday reaffirmed a forecast for profit growth of up to 15% this financial year following what it said were satisfactory trading conditions in the recent quarter, including a slight rise in the earnings contributed from its annuity-style businesses and significant growth in earnings from markets-facing businesses on the previous three months.
The bank in mid-November lifted its guidance for the financial year through March, boosted by the US$2.15 billion sale of Quadrant Energy, an oil-and-gas business that was almost 22% owned by Macquarie.
Chief Executive Shemara Wikramanayake, who took over from veteran Nicholas Moore in December and was for the decade before that head of Macquarie Asset Management, said the company remained well positioned to deliver a superior performance over the medium term.
Macquarie, which began as a subsidiary of London merchant bank Hill Samuel & Co. and opened its first office in Sydney in 1969, has shifted since the financial crisis toward more reliable asset-management, financing and commercial-banking operations to cushion volatility in investment banking and trading. Its annuity-style operations now contribute the bulk of earnings, while international income in the financial first half accounted for 67% of the total.
Over the first nine months of the financial year, Macquarie said the net profit contributed by its annuity-style operations was down on the same period the year before due to lower performance fees in Macquarie Asset Management that was offset by the timing of transactions in its corporate and asset finance arm and ongoing growth in banking.
Still, the financial-year-to-date profit contribution from the markets-facing side of the company was up significantly up thanks to higher principal revenue in its Macquarie Capital unit and a strong performance from its commodities platform.
Macquarie Asset Management's assets under management stood at 532.1 billion Australian dollars (US$377 billion) at the end of June, down by 2% on the fiscal second quarter, while Macquarie's asset finance and principal finance portfolio was broadly steady at A$21.6 billion, the bank said.
The company said its financial position continued to exceed regulatory requirements in Australia, with a capital surplus of A$4 billion.
Write to Robb M. Stewart at email@example.com
Corrections & Amplifications
This article was corrected at 0026 GMT to reflect that Macquarie's predecessor organization first opened in Sydney in December 1969. The original version of this article misstated when Hill Samuel Australia opened its first office in the fifth paragraph.