Macquarie posts small profit increase

TheMacquarieBank group has announced a small increase in profits of three per cent for the year to the end of March 2002 but has suffered a modest loss within its Financial Services Group.

Macquarie announced that it posted a profit of $250 million after tax, while 12 months earlier it had posted $242 million. The company was content with the result since it was achieved without any asset sales and was in line with the statement released to theAustralian Stock Exchangewhich forecast a result slightly better than last year’s.

The Financial Services Group (FSG) was said to have made a loss within the scope of the bank’s business plan and was linked to investment in associated technology. A year ago, Macquarie deputy managing director Richard Shepard toldMoney Managementthat the group was expecting another year of modest loss from FSG until the end of June 2002, after which time the group was expected to make profits.

However, the FSG group had a small victory with its wrap service, which increased in assets from $1 billion to $3.9 billion.

Macquarie Bank executive chairman David Clarke flagged specialist funds as star performers in the last 12 months.

“Our specialist funds strategy has been highly successful. Specialist funds under management grew by 73 per cent while Funds Management Group and Financial Services Group funds grew by 19 per cent. Total funds under management across the Bank’s businesses rose from $30.9 billion to $41.3 billion for the full year, an increase of approximately 34 per cent,” he says.

Funds Management Group, meanwhile, increased its funds under management by 19 per cent to $27.1 billion, while the Equity Markets Group had a disappointing year, which the Bank attributed to poor international sentiment and poor results in the Hong Kong businesses.

The Investment Banking Group were said to have had a good year with an increase in funds under management of $5.3 billion to almost $12 billion. Treasury and Commodities, and Banking and Property also had a good 12 months in achieving record results, with the latter group increasing its funds under management by more than 43 per cent to $4.75 billion.

Macquarie managing director Allan Moss says he expects further good earnings growth in the current year.

“We anticipate continued strong growth in business from our largest client set, investors and intermediaries. Benefits from cost initiatives implemented during the year should also have a positive impact on earnings,” he says.