Buoyed with drop in Australian currency and rise in revenues from its asset management unit and risk management fees, Macquarie Group Ltd is confident of achieving 40 percent growth in profits for the first half of 2015 year.
The Sydney-based investment bank's expected income surpassed analysts' forecasts for the first half. However, the company is anticipating lower performance fee in the second half of the year. Macquarie Group is scheduled to announce its first-half results on 30 October.
The second half performance of Macquarie Group is expected to be in line with the first half. Market analysts forecast that group's net income would rise by 33 percent in the first half. But, the expected income is set to rise 40 percent, according to the investment's regulatory statement.
Macquarie Group aims at keeping up the current potential in advisory and trading business in the wake of the global financial crisis. The company is also strengthening its leasing and asset management divisions.
According to analysts' projections, the company's earnings for 2015 whole year may grow 16 percent to A$1.86billion ($1.32bn). This second half is also expected to be encouraging period for the company.
Macquarie Group is confident that the second half of running from October 2015 to March 2016 is a promising period for boosting revenues as it expected to surpass the $1.6bn posted for the financial year 2015.
"Over the medium term, Macquarie remains well positioned to deliver superior performance. The group has deep expertise in major markets and we continue to build on our strength in diversity and adapt our portfolio mix to changing market condition," said Patrick Upfold, company's chief financial officer, in a regulatory filing.
Macquarie group's profit in 2015 financial year rose 27 percent to $1.6bn from $1.265bn in the previous year. Last year, the company surpassed analysts' forecast of $1.5bn profit.
The Group has also increased dividend 40cents to $2 per share. Analysts see that asset management, lending and leasing businesses have helped the company stabilize the profitability as market-reliant businesses are encouragingly growing for Macquarie Group. Market-related businesses are boosting the company's revenues.
Macquarie Group's stock rose 2.5 percent A$77.68 in Sydney. With this, the year-to-date (YTD) gains of shares rose to 33 percent. The benchmark S&P/ASX 200 index fell 5.6 percent so far this year.
Overseas operations account for 70 percent of income of Macquarie Group. This also benefited the investment bank as there's drop in Australian currency. The Asset management division is the largest contributor to the top line of the company.
The asset management unit is recording encouraging growth in higher performance fees, which would be levied on investors who get more returns than previously benchmarked profits level. The rise in higher performance fees also indicated efficiency and expertise of asset management unit's performance.
Join the Conversation