- Spain to Go to Market to Fund Banks, Regions
- Home Prices Hit Fresh Lows, But 'We See Signs of Hope'
- Cramer's Top Dividend Plays
- Why June Could Be a Turning Point for Markets
- Facebook Faces Extended US Review of Instagram Deal
- Shares of Facebook Fall Below $29 for First Time
- High-Tech Worker Shortage: Has Anything Changed?
- The Manic Incomes of the New York Rich
- Why the Global Rich Keep Relocating
- PB&J, Mac & Cheese Step Out From Kids-Fare Shadow
- Ackman: JCPenney Sales Have Hit 'Bottom'
- Goldman Investment Shines Light on Solar Power
- Facebook Options Soar on First Day
- Home Prices Hit Lows, But 'We See Signs of Hope'
- Auto Sales to Really Take Off This Summer?
- JPMorgan Debacle Points to Regulatory Incompetence, Corruption
- Are You Ready for Facebook Options?
- Option Bulls Dig Into Ivanhoe Near Lows
MOST SHARED
- BlackBerry Maker RIM Hires Advisers to Review Business
- Stocks to Watch: RIMM, LULU, DAL & More
- Facebook Stock Falls Below $29 for First Time
- Metals ETFs Attracting Safe Haven Crowd
- Social Responsibility Builds Long-Term Success: Opinion
- Spreading Around Your Retirement Wealth Tax Free
- See Fast Money Live from Chicago - Thursday June 7th
- Home Prices Hit Lows, But 'We See Signs of Hope'
- Consumer Confidence Has Biggest Drop in Eight Months
- High Tech Worker Shortage: Has Anything Changed?
MOST POPULAR
HOT ON FACEBOOK
Macquarie Warns of 25% Profit Tumble, Shares Fall
Text Size 
Macquarie Group, Australia's top investment bank, tipped a 25 percent drop in net profit for the year, double the fall analysts were expecting, as weak markets hit its trading and investment banking businesses. Its shares sank as much as 5 percent after it warned that its full year profit would slide.
 |
Getty Images |
Macquarie said its lending, leasing and funds business operating income would rise by a fifth in the year to March but would not be able to offset a more than 30 percent fall for its markets-facing business.
"Global economic uncertainty has deepened since October 2011, with substantially lower levels of client activity in many markets" said Chief Executive Nicholas Moore, who is trying to engineer a turnaround for the bank which a few years ago consistently beat market expectations.
A 2012 profit fall would mark the third profit drop for Macquarie in four years.
With its key trading and investment banking business struggling, Macquarie had previously said it expected earnings in the year to March to be lower than last year's net profit of A$956 million ($1 billion).
Thomson Reuters I/B/E/S estimates showed a consensus net profit forecast of A$840 million or a fall of 12 percent for 2011/12, half the decline Macquarie flagged on Tuesday.
Macquarie's full-year results are due on April 27.
Macquarie has been under pressure to reshape its business after a sharp fall in its share price in 2011, when it moved away from riskier banking products and towards unlisted funds, retail banking, leasing and lending businesses.
Macquarie is not alone in struggling with tough conditions.
Even though global peers such as Goldman Sachs [GS
Loading...
()
] and Morgan Stanley [MS
Loading...
()
] managed to beat market expectations with heavy cost-cutting, revenue was lackluster as tighter regulation hits profitability and market volatility continues amid the European debt crisis.
In Asia, Nomura Holdings [NMR
Loading...
()
], Japan's largest investment bank, posted a unexpected return to quarterly profit, after the sale of restaurant chain Skylark helped to offset the downturn in global equity markets. Nomura posted a 46.1 billion yen ($602 million) loss in the July to September quarter.
Macquarie said it was focussing on cost cuts as well with operating expense for the markets business seen down 10 percent and for the others lower by 5 percent.
In October last year, Macquarie announced a share buyback worth almost $900 million helping to douse concerns about a 24 percent fall in first-half profits.
Macquarie said it had surplus capital of A$3.5 billion and expected to start the buyback in the first of 2012/13.
Macquarie shares, which have shed almost 75 percent since 2007, have risen about 9.7 percent so far this year compared with a 5.9 percent rise for the benchmark index [AU;XJO Loading... ()] as investors found some value in the battered stock.
- Companies that establish sustainable principles are positioned for long-term success, says this blogger.
- Advanced manufacturing is about customization, high-precision and performance. And it’s everywhere.
- Many veterans are turning to franchising as a way to make a living once they are out of the military.
- Have you ever wished you could just quit your job and follow your dream? These people have.
- Emerging-market bulls should look to Brazil, South Africa and Russia, as well as Thailand and South Korea.
- Some beers are better than others. An annual competition chose the ones that are the best.
Data is a real-time snapshot *Data is delayed at least 15 minutes
