Macquarie says June quarter profit lower

Macquarie Group says contribution from its group businesses fell slightly in the June quarter from a year ago due to the impact of coronavirus pandemic.

Macquarie also said it is unable to provide meaningful earnings guidance for the year ahead, given that market conditions will continue to remain challenging.

The financial servics giant did not specify the extent of the decline in its first quarter profitability, but said lower investment income at its market-facing operations hurt performance.

Ahead of its annual general meeting on Thursday, Managing Director Shemara Wikramanayake said the group saw lower income in the Banking and Financial Services business due to higher provisions. 

Foreign exchange movements also weighed on its asset management business – Macquarie’s biggest contributor to earnings, although this was offset by the sale of its rail operating lease business. 

However, clients seeking to rebalance portfolios to manage risk in the volatile environment helped boost its commodities and global markets division.

Macquarie halved its dividend in May after net profit for the full year ended March 31 dropped eight per cent due to higher credit impairment.

The group expects market conditions are likely to remain challenging, especially given the significant and unprecedented uncertainty caused by the global impact of COVID-19 and the uncertain speed of the global economic recovery. 

Macquarie said this made short-term forecasting extremely difficult and accordingly, it would not be able to provide meaningful earnings guidance for FY21.

By 1035 AEST, Macquarie shares were up 2.3 per cent to $127.81 in a firm Australian market.

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