Macquarie Group signalled the end of 14 years of continuous profits growth on Tuesday as it reported a 43% drop in first-half profits, took heavy writedowns and warned operating conditions remained tough. The fall in net profit from A$1.06bn ($686m) to A$604m was struck after Macquarie incurred one-off costs and write-downs totalling A$1.14bn in the half year ended September. But Australia’s biggest investment bank said its funding position remained strong, with cash and liquid assets of A$26.3bn exceeding short-term wholesale issued paper of A$18.9bn. Nicholas Moore, who took over as chief executive this year, said profits in the second half were likely to be at a similar level to the first half and forecast further writedowns of close to A$400m. A drop in full-year profits would provide critics of Macquarie with ammunition that the investment bank’s fee-driven model – which has historically relied heavily on buying infrastructure assets that are then placed in listed and unlisted funds that Macquarie also manages – is past its prime.

This entry was posted by Gwen Robinson on Tuesday, November 18th, 2008 at 5:40 and is filed under Capital markets. Tagged with macquarie. Edit this entry.