Macquarie's 1st Half Profit Falls, to Launch Up to A$2 Billion Buyback — Update

By Alice Uribe

SYDNEY--Macquarie Group's first-half net profit fell by 39%, but the company said its strong capital position means it could soon begin buying back shares worth up to 2.0 billion Australian dollars (US$1.29 billion).

Macquarie, Australia's biggest investment bank and asset manager, said its net profit for the six months through September fell to A$1.42 billion, from A$2.31 billion a year earlier.

Chief Executive Shemara Wikramanayake said Macquarie's underlying client franchises were resilient amid less certain market conditions.

"Our annuity-style businesses saw growth in loan books, deposits and assets under management, but the first-half result was substantially down compared to a strong period of realizations in the prior corresponding period," she said. "Our markets-facing businesses delivered solid performances despite lower market activity and volatility levels."

Macquarie said its group capital surplus was A$10.5 billion at the end of September, down from A$12.6 billion at end-March. Still, the company said its financial position comfortably exceeded regulatory minimum requirements, allowing it to buy back shares worth up to A$2 billion.

Macquarie's annuity-style activities contributed A$1.3 billion to first-half profit, although this down 43% on a year earlier. This reflected the timing of asset realizations in green investments in Macquarie Asset Management, which more than offset a positive result in Banking and Financial Services.

Markets-facing activities, which include most of its Commodities and Global Markets businesses, fell 32% on year to A$1.56 billion.

"The prior corresponding period featured a strong performance from commodities in CGM together with material asset realizations in Macquarie Capital," said the company.

Directors declared an interim dividend of A$2.55 per share, lower than a payout of A$3.00 a share a year ago. Still, that beat under consensus forecasts compiled by FactSet, which projected Macquaries's interim dividend would be A$2.42.

Macquarie's net operating income of A$7.91 billion was down 8% on year, while operating expenses of A$5.92 billion rose by 6% on year.

International income accounted for 65% of Macquarie's total income, the company said

Macquarie, which has a reputation among analysts for conservative forecasts, didn't provide specific guidance.

Write to Alice Uribe at alice.uribe@wsj.com

(END) Dow Jones Newswires

November 02, 2023 18:19 ET (22:19 GMT)

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