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Home / Business

Macquarie looks to crack $2b profit for first time on 'good tailwinds'

AAP
1 Nov, 2015 04:00 PM2 mins to read

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Macquarie Group is on track for a record annual profit above A$2 billion ($2.1 billion) due to a falling Australian dollar and improving market activity.

The investment manager's half-year profit soared 58 per cent to A$1.07 billion, and its second half profit is forecast to be higher than the previous year's A$926 million.

That puts Macquarie in line to comfortably beat its 2008 record profit of A$1.8 billion.

Its shares gained 2 per cent to an 8-year high of A$85.70.

Improved trading opportunities and a falling Australian dollar contributed, with 71 per cent of its income coming from overseas.

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"China is still growing at a strong rate, the US is continuing to grow and even Europe is growing around the world at the moment," chief executive Nicholas Moore said.

"So growth around the world is probably subdued, but still we expect growth to continue for the foreseeable future."

The Australian dollar fell more than 20 per cent in the year to September, and accounted for about a quarter of the company's half year profit increase.

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Macquarie said it also benefited from increased brokerage fees and commissions due to an increase in the number of deals taking place in volatile markets.

A rise in mergers and acquisitions also boosted advisory and underwriting fees for its Macquarie Capital unit.

Net profit in Macquarie's banking and financial services division was up 21 per cent on the prior corresponding period to A$170 million, largely from volume growth in Australian mortgages, business lending and deposits.

Macquarie's Australian mortgage portfolio rose 39 per cent on the 2014/15 first half to A$27.6 billion, representing about 1.8 per cent of the domestic mortgage market.

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Moore said Macquarie's view on the Australian economy was not pessimistic.

"Obviously growth is lower than it was during the peak of the resources boom, but we still think growth will continue as we've got good demographic tailwinds behind us and there's good investments that can be made in these cities around the country, and that's taking place," Moore said.

- AAP

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