Macquarie profits up by 15 per cent

Macquarie’s overall profits of $242 million in the year to March 31 announced today included a loss of around 3 per cent made by its fledgling financial services group (FSG).

FSG, which was set up in June of last year, has close to 60 financial planners and targets retail clients from the medium to top end of the market. Its most recent move was in partnering the Fairfax f2 online trading service which was rolled out three weeks ago.

The group made the loss in the wake of expenditure for its IT requirements. The costs of this are planned to be absorbed for two years, according to Macquarie deputy managing director Richard Shepard.

"We're expecting another year of modest loss [for FSG] to the end of June 2002," he says. "But after that time we should start to see the group making profits."

Macquarie's overall profit meanwhile, was an increase of 15 per cent on the previous year's results, and came on the back of record profits from the bank's asset and infrastructure, treasury and commodities, equity markets, and banking and property groups, says Macquarie executive chairman David Clarke.

Total funds under management grew to $30.9 billion in this period, which was an increase of $4.6 billion over the previous year. The funds management group of Macquarie contributed $22.8 billion to this result which can be broken down to $12.7 billion for wholesale clients and $10.1 billion of funds brought in by FSG.

Like other funds managing players at the big end of town, Macquarie says the current weak economic conditions should not be considered an obstacle to growth.

"We are confident of maintaining or improving our market position. We will be continuing to expand, both domestically and internationally," says Macquarie managing director Allen Moss.

He says in the past 12 months, Macquarie's international operations contributed 29 per cent of the bank's income and 38 per cent of its profits.