Macquarie posts first profit fall in 17 years

Macquarie Group, Australia's biggest investment bank, reported a 64% fall in second-half profit on May 1 as it was forced to make large asset write-downs. Return-on-equity was 9.9% for the year, down from 23.7% for the prior year. It then announced and completed a A$540 million ($396 million) share placement in order to strengthen its balance sheet.

The drop in net income to A$267 million in the six months ending March 31, from A$743 million in the same period a year ago, was in line with analysts' expectations, but the 52% drop in full-year profit to A$871 million marked the first decline in 17 years. The bank had warned in February that full-year profit would halve to about A$900 million. Macquarie cut total dividends for the year by 46% to A$1.85 a share; 40 cents will be paid out for the second half of the year.

Macquarie said it had experienced significant volatility and continued market declines in the second half, particularly in November and in February.

"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 judgments on sustained market improvements," Macquarie chief executive Nicholas Moore said in a statement.

Asset write-downs amounted to A$2.5 billion -- higher than the A$2 billion the group forecast in February. But Moore, who was appointed CEO in May 2008, was upbeat.