November 1, 2018 / 9:56 PM / 9 months ago

Australia's Macquarie Group first-half profit up 5 percent , fiscal year 2019 guidance upped

(Reuters) - Macquarie Group Ltd (MQG.AX) said its first half profit rose 5.0 percent as solid performance by its commodities, markets and capital arms offset declines in its asset management and corporate finance divisions, adding that it expected fiscal 2019 results to be higher than last year.

Australia’s biggest investment bank had earlier expected annual profit to be in-line with the previous year, but flagged the likelihood of 10 percent growth on Friday.

This was despite the one of the company’s flagship units, the asset management arm, posting a 36 percent slump in profit during the period, while contribution from the corporate finance division declined nearly 30 percent.

That, however, was more than offset by its capital division profit more than doubling to A$406 million, and the commodities and financial markets unit profit growing nearly 85 percent.

The company also put on hold its A$1 billion share buyback program announced last year, saying there was “currently no prospect of buying any shares” under the program.

Macquarie declared an interim dividend of A$2.15 per share, up from A$2.05 last year but lower than second-half fiscal 2018 final dividend of A$3.20 a share.

Net profit for the six months to Sept. 30 rose to A$1.31 billion ($943.72 million) from A$1.25 billion a year ago. That was broadly in line with the A$1.32 billion average of forecasts by four analysts polled by Reuters.

A diverse business pool enables Macquarie to overcome the challenges faced by its domestic peers, such as a weakening lending environment. The bank makes money from M&A advisory and fees and trading commodities such as shares, currency and oil. It also collects fees based on the performance of its global funds, which have proven to be a less volatile source of income.

Reporting by Ambar Warrick and Rushil Dutta in Bengaluru; Editing by Kevin Liffey

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