Macquarie Profit Misses Estimates as Markets Unit Takes Hit
Macquarie Group Ltd.’s profit fell short of analyst estimates as subdued volatility weighed on its key commodities and global markets business.
by Harry Brumpton · Financial Post(Bloomberg) — Macquarie Group Ltd.’s profit fell short of analyst estimates as subdued volatility weighed on its key commodities and global markets business.
Net income for the six months to Sept. 30 rose to A$1.61 billion ($1.06 billion), from A$1.42 billion a year earlier, according to a statement Friday. That missed the A$1.74 billion average estimate of four analysts surveyed by Bloomberg.
The results were in part buoyed by green-energy investment sales at its asset management unit, though not enough to offset slowing advisory work at its investment-banking arm, Macquarie Capital.
Shares in the Sydney-based firm hit an all-time high last week. Investors have tempered profit expectations from the bank over the last year and Chief Executive Officer Shemara Wikramanayake has maintained that business would tick back up over time as energy trading grows and dealmaking recovers in line with US banks.
The major Wall Street banks posted strong earnings for the quarter ending in September, mostly on account of a rise in markets business activity and higher investment-banking fees.
Macquarie, meanwhile, has been losing the tailwinds that helped it reap record profit across a number of its flagship units. In recent years, it benefited from a unique combination of energy shocks that buoyed its commodities trading business and a spree of dealmaking that fed its investment-banking arm.
The firm’s recent windfalls in its commodities trading arm continued to slow as clients relied on the bank less for hedging in the absence of volatility in energy markets globally. However, the firm’s energy trading for its own book in the US performed well.
Macquarie’s board approved an extension of the up to A$2 billion buyback announced last year by a further 12 months.
(Adds detail from third paragraph on MAM, Macquarie Capital’s performance)