Macquarie Group Lower Profit Warning

Australian based investment bank, Macquarie Group (ASX:MQG) have announced a lower profit warning as a consequence of subdued global markets affecting the majority of its businesses. MQG said in an announcement to the stockmarket that it expects its second-half profit for the six months to the end of March 2011 to be around 5% lower than in the year-ago period. The lower profit guidance implies a full-year profit of about $950 million compared with the bank's previous forecast of $1.05 billion.

Chief executive of Macquarie Group said, "Where we are doesn’t feel like normal ... we are clearly at subdued levels. The general risk appetite ... [is] still very much in favour of debt at this stage, particularly fixed income. As the cycle moves, we would expect the pendulum to swing back to an equity focus, which by its very nature results in higher volumes flowing through the securities businesses and the M&A businesses. All our businesses are very focused on getting their returns higher, and given the medium-term plans we have in place, we certainly think we'll be seeing an improvement in the returns on capital."

Macquarie Group has a strong presence in Asia, and is a niche player in Europe and North America with expertise in resources and energy, infrastructure and real estate. In recent years, it has heavily scaled back its listed infrastructure funds business, many of which performed poorly during the global financial crisis, and expanded its US fund management and investment banking activities.

Macquarie Group's shares closed 13 cents lower at $41.10.