Macquarie tips lift in FY profit

Group says second half will be stronger than H1, shares fall 3% in early trade.

Macquarie Group (MQG) has reiterated its expectation that its full-year profit in fiscal 2013 will be an improvement on the previous year, so long as market conditions remain stable.

Investors responded poorly to the news. At 1032 AEDT fell 3.15% to $53.89, against a benchmark index lift of 0.06%. In earlier trade, shares hit as low as $53.80.

In an update to the market, Macquarie chief executive officer Nicholas Moore said market conditions continued to show signs of improvement, however client activity remains subdued for some capital markets facing businesses.

"Consistent with our previous statement to the market, while market volatility makes forecasting difficult, we continue to expect the fiscal 2014 net profit contribution from operating
groups to be up on fiscal 2013," he said.

"In line with previous years, it is currently expected that the second half result will be stronger than the first half."

However Mr Moore warned the group's short-term outlook remained subject to a number of challenges, most notably market conditions, the cost of its continued conservative approach to funding and capital, as well as potential regulatory changes and tax uncertainties.

The group said the fiscal 2014 tax rate is currently expected to be broadly in line with fiscal 2013.

Macquarie saw its assets under management increase to $430.7 billion from $380.7 billion at 30 September 2013.

The group said at December 31, its capital surplus under APRA Basel III was $2.7billion.

The Bank Group APRA Basel III common equity Tier 1 ratio for Macquarie Bank Limited was 9.7% and the Tier 1 ratio was 10.8%.