UPDATE 3-Cashed-up Macquarie is in the mood to shop

Fri Oct 30, 2009 2:44am EDT

* H1 net profit A$479 mln vs A$487 mln analysts' estimate

* Has war chest of A$4.5 billion in surplus capital

* Says H2 profit will be broadly in line with H1

* To maintain cautious stance on capital and funding

* Shares up 1.5 pct, in line with broad market (Adds CFO quotes)

By Morag MacKinnon

SYDNEY, Oct 30 (Reuters) - Macquarie Group Ltd (MQG.AX), Australia's largest investment bank, has grown its surplus capital by almost half to a hefty A$4.5 billion ($4.1 billion), giving it muscle to hunt for assets overseas.

The bank is using the fallout from the global financial crisis to pick up assets cheaply offshore, and has spent A$1 billion buying four businesses in North America in the past six months.

"There are still some very good opportunities that we think will come our way in the next little while and so we want to keep our capital where it is right now," Chief Financial Officer Greg Ward told Reuters.

Macquarie disclosed the jump in excess capital on Friday while posting half-year earnings that were in line with market forecasts.

Macquarie has used an Australian government guarantee of bank funding to raise A$10.6 billion from debt markets in the global financial crisis.

"It's a good time to be a buyer of assets if you have got the money," said Angus Gluskie, who manages Australian equities at White Funds Management. "Macquarie is taking advantage of that."

Chief Executive Nicholas Moore said the bank would continue to expand via organic growth and incremental acquisitions and manage its money cautiously.

In August, Macquarie bought U.S. asset manager Delaware Investments for $428 million, its biggest acquisition.

"I think that will be transformational for the funds business," CFO Ward said, adding that the bank remains on the lookout for similar assets.

Macquarie, dubbed the "millionaire's factory", reported a 21 percent fall in net profit for the six months ended Sept 30 to A$479 million, after some one-off charges and falls in both trading and commission and fee income.

The result was above the bank's own forecast for a profit of around A$436 million, excluding the impact of one-off items.

The average forecast of seven analysts surveyed by Reuters was A$487 million, ranging from A$399 million to A$533 million.

(For a graphic on the results, click here)

Moore said the bank's profit in the second half would be similar to the first.

The group will pay shareholders an interim dividend of 86 cents, down 41 percent on the 2008/09 interim dividend.

Macquarie in May reported its first annual profit fall in 17 years as volatile markets forced it to make large writedowns.

The bank's shares closed up 1.5 percent at A$50 on Friday, in line with the broader market .AXJO. The shares have risen more than three-fold since hitting a 10-year low of A$15.00 in March. ($1=1.092 Australian Dollar) (Additional reporting by Denny Thomas, Editing by Valerie Lee and Muralikumar Anantharaman)

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