Macquarie shares drop after weak results
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More news: Shares in Macquarie Group were down more than 2% to $184.36 in early trading after the financial giant warned that net profit for the year-to date is down substantially across its annuity and market-facing businesses amid weaker trading conditions.
UBS analyst John Storey said the result was disappointing and the divisional commentary "reads poorly across the board". He also warned that the group now needs a sizeable Q4 result to meet analyst expectations.
Macquarie Group reports sharp profit drop
The news: Diversified financial giant Macquarie Group has warned that net profit for the the financial year to date is down substantially across its annuity and market-facing businesses amid weaker trading conditions.
The numbers: In its operational briefing announcement, the group did not elaborate on the extent of the profit decline in the current quarter, but said contribution from its top profit-generating arm, commodities and global markets (CGM), was down on the previous year. This was primarily due to decreased inventory management and trading revenues in North American gas, power and emissions.
Among the annuity-style businesses, Macquarie Asset Management (MAM) assets ticked up 1% over the prior quarter to $882.5 billion, while banking and financial services (BFS) deposits and its home loan portfolio were both up 3%.
The context: The group outlined a sharp profit drop in the first half after an exceptionally strong FY23. While the commodities and markets business has suffered lower fee and commission income, the annuity businesses were down mainly due to lower asset realisations and margin compression.
Macquarie also said the head of its commodities and global markets division, Nicholas O’Kane, would step down on 27 February after 28 years with the group. He will be replaced by Simon Wright, currently global head of CGM’s financial markets division.
What they said: On Tuesday, CEO Shemara Wikramanayake said “underlying client franchises were resilient in ongoing uncertain conditions with continued customer growth, fundraising and new business origination a feature across businesses".
The source: ASX announcement
