Investors ignored everything in yesterday’s sell-off, including Macquarie Group’s forecast of a higher than expected 2017-18 profit for the year to March 31.
The shares lost 5.3% to close at $97.88, despite the upgraded guidance.
Macquarie said higher performance fees in its funds management arm will boost earnings by around 10% to a record $2.2 billion by the end of the financial year on March 31.
But the final six months to March 31 will see a lower result than the half year to the end of last September.
“Given substantial performance fees were recognised in the half-year ended 30 September 2017, Macquarie expects the half-year ended 31 March 2018 net profit contribution from operating groups to be down on 1H18 and broadly in line with the half-year ended 31 March 2017,” Macquarie said yesterday.
The investment bank said trading conditions had been “satisfactory" across the group in the December quarter, as it raked in higher performance fees in its asset management business.
It said earnings were higher over the first nine months in its fund management arm, its asset financing business, and its banking and financial services business.
December-quarter profits were down in the commodities and the global markets business, and Macquarie Capital, which includes its mergers and acquisition and debt and equity markets businesses.
Macquarie has benefited from a global surge in infrastructure spending, and it said assets under management in its funds management arm were up 2% in the quarter, to $483 billion.
Its corporate and asset finance portfolio was “broadly” in line with the previous quarter at $34.6 billion. The banking and financial services unit, where Macquarie is relatively small but expanding, held $46.3 billion in deposits, an Australian mortgage portfolio of $31.2 billion after 4% annual growth, and business loans of $7.2 billion.
The outlook statement included the usual caveat that its short-term outlook was subject to market conditions, policy and tax uncertainty and the rate at which transactions were completed.
“Macquarie remains well positioned to deliver superior performance in the medium-term due to our deep expertise in major markets, strength in diversity and ability to adapt the portfolio mix to changing market conditions, the ongoing benefits of continued cost initiatives, a strong and conservative balance sheet and a proven risk management framework and culture,” chief executive Nicholas Moore said in a statement ahead of yesterday’s operational briefing.