Macquarie Group first half profit $479m

MACQUARIE Group says its fiscal 2010 second half profit will be in line with the first half, which declined 21 per cent from the prior corresponding period. Net profit was $479 million for the six months to September 30, down from $604 million, Sydney-based Macquarie said in a statement today.

Australia's biggest investment bank said first half profit declined after it wrote down asset values and took charges for impairments.

Operating income fell 11 per cent to $3.5 billion.

Macquarie had forecast profit for the six months to to be equivalent to $435.5 million.

Macquarie chief executive Nicholas Moore said while market conditions were improving, it was still volatile, making it difficult to make short-term forecasts.

"We currently expect the profit for the second half of 2010 to be broadly in line with the first half but this remains subject to market conditions and significant swing factors and excludes the impact of one-off items," he said in a statement.

"While there have been some improving trends in a number of major markets, overall we continue to maintain a cautious stance with a conservative approach to funding and capital."

Mr Moore said there continued to be opportunities for medium term growth whether that was internally generated or through takeovers.

"Our strong balance sheet, strong team and market conditions provide opportunities for medium term growth, building upon the strength, diversification and global reach of our businesses," he said.

Macquarie declared a first half dividend of 86 cents per share unfranked, compared with the $1.45 payment the year before.

Earnings per share slumped 31 per cent from a year earlier to $1.45, following a $1.21 billion capital raising first announced in May.

Macquarie said it had capital of $11.5 billion, $4.5 billion more than its minimum regulatory requirement.

The bank said it had moved away from short-term wholesale issued paper, the value of which was $4.5 billion as of September 30 compared with $18.9 billion the year before.

"While we have deployed funding during the period, we have continued to maintain conservative and appropriate levels of capital and liquidity, which has had an impact on our earnings," Mr Moore said.

The bank took write downs of $414 million for the first half. Still, all its divisions except the real estate banking division were profitable.

"Our first half result reflects improved market conditions and the diversification and global reach of our businesses," Mr Moore said.

"However, the result was impacted by a number of one-off items and equity accounted gains and losses."

Assets under management declined by $27 billion to $217 billion, mainly because of the gain in the Australian dollar since March.

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