Macquarie Group’s profit was flat for the first three quarters of the fiscal year as business in its commodities trading arm continued to slip even as its asset management unit jumped “substantially”.
Net profit after tax for the nine months ended Dec 31 was “broadly in line” with the same period a year earlier, the Sydney-based firm said on Tuesday (Feb 11).
Earnings from its asset management arm rose due to higher performance fees and investment income, the firm said. Meanwhile, the earnings contribution from the market facing businesses was significantly down, mainly due to subdued conditions in certain commodity markets, Macquarie said, without providing hard numbers.
Shares in the bank rose as much as 2 per cent.
Macquarie’s shares have lagged behind global banking peers over the past year amid a more tepid performance in its commodities trading arm and a lack of sales from its asset management wing. The bank’s US peers recently notched blowout profits as a group, in part due to volatility surrounding the US election that boosted trading businesses as well as a rebound in mergers and acquisitions work.
The bank’s profit may still rise as much as 15 per cent this fiscal year, Bloomberg Intelligence analyst Matt Ingram wrote following the firm’s update. Longer term growth is in focus given Macquarie recently repurchased A$1 billion (S$851 million) of shares recently at a price close to the level it raised A$2.8 billion in 2021, Ingram said.
The 2021 raise was done to “provide flexibility to grow”, yet the bank has been sitting on A$8 billion to A$10 billion of excess capital ever since without making a material acquisition, Ingram wrote. BLOOMBERG
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