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Macquarie Group warns of weaker FY20 after record profit
[SYDNEY] Australian investment bank Macquarie Group on Friday warned of a weaker year ahead, as it reported record earnings of A$2.98 billion (S$2.86 billion) driven by asset sales and double-digit profit from its trading and investments units.
The Sydney-based bank and global investor said earnings in 2020 would be "slightly down", sending its shares as much as 7 per cent lower for their sharpest intraday fall since November 2016.
The commodities and markets and capital divisions were the main contributors in the year to March 31, helping Macquarie beat its own earnings guidance with a 16.6 per cent rise in annual net profit. Earnings from its asset management, banking and financing businesses shrank.
"We've had a very strong year in our market-facing businesses," chief executive officer Shemara Wikramanayake told analysts, on her first annual earnings call since taking the job in November with a promise of faster profit growth.
Net profit rose to A$2.98 billion from A$2.56 billion a year earlier. Analysts on average had estimated a profit of A$2.95 billion, Refinitiv data shows.
Profit at its markets-facing business leapt 76 per cent to A$2.86 billion, the firm said.
Favourable conditions were unlikely to be repeated this fiscal year, Ms Wikramanayake added, without elaborating.
While the strong result reinforced the 50-year-old company's push to strengthen its position globally under Ms Wikramanayake, investors' profit expectations for this year now needed to drop by 7 per cent, UBS analysts said in a note to clients.
Macquarie shares fell as much as 7 per cent, before recovering to be 5 per cent lower at lunch, while the broader market was slightly higher.
During the fiscal year the firm bought European real estate investment group GLL and Luxembourg-based ValueInvest Asset Management. It sold stakes in energy company Quadrant Energy and online real estate settlements firm PEXA.
Profit from the core annuity-style businesses - which include funds management, leasing, banking and finance arms - fell 4 per cent.
Macquarie declared a final dividend of A$3.60 per share, up from A$3.20 last year.