Macquarie on track as fee strength eyed buoying first-half profit

Australia’s biggest investment bank has flagged a lift in first-half profit on the back of stronger performance fees.

Macquarie Group chief executive Nicholas Moore and Chairman Peter Warne at the Macquarie Group Annual General Meeting, in Melbourne. (Stuart McEvoy/The Australian)

Macquarie Group, Australia’s biggest investment bank, has flagged a rise in profit for the first half of the fiscal year on the back of stronger performance fees.

Macquarie said it continued to expect its net profit for the full-year will be broadly in line with the prior year, but the strength in fees meant its first-half profit was set to be up year-over-year and in line with the final six months of the previous fiscal year.

The bank reiterated its balance sheet was strong and conservative and it was seeing the ongoing benefits of continued cost cutting.

In the year through March, Macquarie (MQG) recorded a 7.5 per cent rise in profit to $2.22 billion. For the first half of that year, profit was down 2 per cent on-year at $1.05bn.

Macquarie, which began as a subsidiary of London merchant bank Hill Samuel & Co. and opened its first office in Sydney in 1970, has in recent years shifted toward more reliable asset-management, financing and commercial-banking operations to cushion volatility in investment banking and trading. These annuity-style operations now contribute the bulk of the bank’s earnings.

At 11am (AEST), shares in Macquarie Group were up 2.5 per cent at $84.73.

Dow Jones Newswires