Macquarie Group has dampened market expectations for its profit growth this year, saying conditions in its flagship investment banking business remain subdued despite the recent lift on global financial markets.
The bank’s chief executive, Nicholas Moore, today said he expected a 10 per cent increase on last years earnings of $730 million, on the back of better market conditions and ongoing growth in its wealth management arm.
While Mr Moore said the bank’s profits could be higher if the recent improvement on markets was sustained, the guidance points to profits of about $800 million, compared with market analyst expectations of near $840 million.
In early trade Macquarie shares had fallen as much as 4.5 per cent, a sharper drop than the broader market. They are currenty trading 3.1 per cent lower at $37.55.
Mr Moore said that despite the more positive market conditions, the improvement had come off a low base and merger and acquisitions activity remained soft in the Asia Pacific region.
‘‘Things are better but still are subdued,’’ Mr Moore told analysts at a briefing on Tuesday.
‘‘There’s the probability of a stronger result should the improvement in conditions that we are experiencing at the moment continues.
Macquarie's annuity-style businesses, such as banking and financial services, continued to post growing profits, he said.
The company also had continued to cut costs, with operating expenses in the December quarter down 10 per cent on the same period in the previous year.
with AAP
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