Macquarie profits surge from offshore growth

Macquarie Bank has recorded a record profit of $242 million after tax attributable to ordinary shareholders for the half year to September 30 2003, up 32 per cent on the same period last year.

This strong result was underpinned by a significant increase in international income, up to 32 per cent of the bank’s total income for the period from 22 per cent last year.

Profit before tax attributable to ordinary shareholders rose 27 per cent to $318 million, while earnings per share for the six month period increased 27 per cent to 116.2 cents from 91.3 cents for the previous corresponding period, with the return on average ordinary shareholders’ funds at 23.2 per cent per annum.

Macquarie Bank chairman David Clarke says the record result reflected the strengths and diversity of Macquarie’s businesses, with an improvement in equity markets and the bank’s policy of continuing to invest through the business cycle also proving advantageous.

Macquarie also announced a dividend of 52 cents per share for the half year (franked to 90 per cent), an increase of 27 per cent on last year’s interim dividend, reflecting earnings growth and Macquarie’s revised dividend policy.

The Financial Services group exceeded expectations to be significantly up on the prior corresponding period, increasing annuity based revenue through its Wrap - up 22 per cent to $7.7 billion - and Cash Management Trust - up 6 per cent to $9.3 billion.

The group’s private client broking business also made a stronger contribution, benefiting from improved investor sentiment and the addition of more than 60 private client advisers.

The Funds Management group was also marginally up on the prior corresponding period with total funds under management increasing 8 per cent to $33.1 billion, with strong growth in international funds under management.

On the outlook, Macquarie Bank managing director and chief executive officer Allan Moss says, “In the current year we expect to continue to benefit from these positive conditions and anticipate the second half will be significantly up on the prior corresponding period, but, as usual, below the first half dur to the timing of performance fees.”