Wealth manager Macquarie Group’s profit has surged by 35 per cent on the back of strong demand for fixed-income investments and a weakening Australian dollar.
The group’s half-year net profit rose to $678 million in the six months to September 30, up 35 per cent on the same time last year.
The result was even stronger than it September forecast of a 25 to 30 per cent profit increase.
But it was 11 per cent weaker compared with the six months to the end of March.
The Macquarie funds group division, which provides fixed-income annuity products, was the best performer during the half year, with its profit rising to $785 million, marking a 57 per cent increase compared with the same time in 2013.
IG Markets strategist Evan Lucas said the “very, very conservative” fund manager had underpinned Macquarie’s “very solid result” overall.
“That is really driving this result, quite substantially driving this result,” he told AAP.
“It means that more Australians particularly continue to head towards the conservative side rather than going back to what was a risky trading idea back before the GFC.”
A sharp fall in the Australian dollar, from close to 95 US cents in July to 88 US cents, had also helped Macquarie’s corporate and asset finance group, which saw its net profit rise to $468 million, an 18 per cent rise compared with the same time last year.
“Sixty-five per cent of their earnings comes from overseas and that’s doing very well for them,” Mr Lucas said, adding a weaker local currency improved Macquarie’s earnings in US dollar or Japanese yen terms.
In its outlook, Macquarie said it was well positioned to deliver superior medium-term performance, citing its “strong and conservative balance sheet” and its proven risk management framework.
“The group remains well positioned, with a strong and diverse global platform and specialist skills across a range of products and asset classes,” chief executive Nicholas Moore said in a statement, adding it had a strong balance sheet, surplus capital and robust liquidity.
Macquarie Capital, which advises firms on share market floats, delivered a half year profit of $150 million, up 49 per cent on the previous corresponding time last year.
The fixed income, currencies and commodities division enjoyed a profit of $250 million, up 23 per cent on the equivalent 2013 result.
Macquarie’s operating income rose to $4.3 billion for the half year, which was up 17 per cent on the same time in 2013.
The company announced an interim dividend of $1.30 per share, up from last year’s first half dividend of $1 per share.
Macquarie Group shares rose by $1.27, or 2.12, to $61.12 by 1033 AEDT.
