Macquarie outlines share buyback, trims dividend after first-half profit drop

The news: Diversified financial giant Macquarie Group has posted a sharp drop in first-half profit amid weaker trading conditions across its annuity and market-facing businesses.

The numbers: Net profit for the half year ended 30 September was down 39% from a year ago to $1.42 billion, missing analyst expectations by a wide margin. Revenue was down 8.3% to $7.9 billion and the company trimmed its interim dividend to $2.55 a share, down from $3 a share a year ago. Macquarie said its board had approved a share buy-back of up to $2 billion.

The context: The financial conglomerate’s top profit generating arm, the Commodities and Global Markets division, posted a 31% drop in interim earnings on the back of volatility across commodities markets. Earnings at annuity-style businesses Macquarie Asset Management (MAM) and Banking and Financial Services operating income at MAM were down 71% and up 10% respectively amid lower investment-related income from green energy investments. Macquarie Capital earnings were also down 28% from a year ago.