Australia's Macquarie sees profits plunge 52 pct

Australia's biggest investment bank Macquarie Group said on Friday its annual profits had more than halved, as it was hammered by massive asset writedowns sparked by the global economic crisis.

Australia's biggest investment bank Macquarie Group said on Friday its annual profits had more than halved, as it was hammered by massive asset writedowns sparked by the global economic crisis.

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Macquarie, once dubbed the "millionaire's factory", recorded its first profit fall in 17 years, dropping 52 percent to 871 million Australian dollars (632 million US) from 1.8 billion dollars a year earlier.

The bank booked 2.5 billion dollars in asset and loan writedowns in the year to March due to deteriorating market conditions, including the falling value of funds.

"It's obviously been an exceptionally challenging market out there," Chief Executive Nicholas Moore said as the bank's full year result came in just shy of its 900 million dollar guidance.

Macquarie aims to raise 540 million dollars through the issue of 20 million shares at a price of 27.00 dollars each, a source familiar with the deal said.

But the bank, which requested a trading halt on Thursday, was tight-lipped about any capital raising plans in its profits announcement.

"We are not discussing any capital raisings here today for regulatory purposes," Moore said in a presentation to analysts.
Market conditions are likely to remain tough as much of the world slips into recession but there were signs of stabilisation in March and April, the bank said.

"While there were some early signs of markets stabilising in March and April, significant uncertainties remain and it is still too early to make any judgements on sustained market improvements," Moore said in a statement.

Macquarie said it would likely suffer fewer writedowns and provisions in the fiscal year to March 2010.
Its 2010 balance sheet would see a decrease in cash balances, equity investments maintained at or below existing levels and lower investment levels in listed funds, the institution said.

The global financial crisis has hit Macquarie hard, with its share price currently worth around half what it was a year ago and nearly two-thirds lower than two years ago.

But the group's shares were near a six-month high when they closed at 33.48 dollars on Thursday before the trading halt.