Macquarie Continues to Expect Steady Full-Year Profit

By Robb M. Stewart Features Dow Jones Newswires

MELBOURNE, Australia--Macquarie Group Ltd. (MQG.AU), Australia's biggest investment bank, said its operations have been performing in line with expectations and it continues to expect a steady profit this financial year.

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Contributions from Macquarie's various businesses increased in the first quarter of fiscal 2018 over a year ago, although were down on a strong prior quarter, it said in a statement ahead of its annual shareholders meeting.

Nicholas Moore, who has been managing director and chief executive since May 2008, said Macquarie's annuity-style businesses continued to perform well, while trading conditions improved across most markets on the bank's capital-markets facing operations.

Macquarie reaffirmed guidance given in May, forecasting its net profit in the year through June would be broadly in line with the previous year, when profit climbed 7.5% to a better-than-expected 2.22 billion Australian dollars (US$1.78 billion).

Mr. Moore said base fees at the Macquarie Asset Management unit were broadly steady, although performance fees were down year-over-year, while corporate and asset-finance lending was up on-year. Growth also continued in the banking and financial services operations, particularly across mortgages, business banking and deposit books, Mr. Moore said.

Macquarie, which began as a subsidiary of London merchant bank Hill Samuel & Co. and opened its first office in Sydney in 1970, has in recent years shifted toward more reliable asset-management, financing and commercial-banking operations to cushion volatility in investment banking and trading. These annuity-style operations now contribute the bulk of the bank's earnings.

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In May, a consortium of investors led by Macquarie landed a A$7.62 billion deal to secure a long-term lease of one of the largest electricity-distribution networks in Australia's populous New South Wales. In June, it agreed to buy Cargill Inc.'s North American power and gas business for an undisclosed price, months after it signed a deal to buy the agriculture company's global petroleum-trading operations.

On the capital-markets facing side of the company, Mr. Moore said commodities and global markets businesses had seen stronger activity, largely due to improved equity market conditions, and Macquarie Capital saw increased client activity in debt capital markets, he added.

Macquarie said there were no significant one-time items in the first quarter of fiscal 2018.

Write to Robb M. Stewart at robb.stewart@wsj.com

(END) Dow Jones Newswires

July 26, 2017 19:06 ET (23:06 GMT)