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Macquarie Group half year profit slips 2%

AAP logoAAP 27/10/2016 Peter Trute

Macquarie Group managing director Nicholas Moore says the investment bank is on track to broadly match last year's record $2.06 billion profit despite a two per cent slip in half year profit.

Macquarie Group made a net profit of $1.05 billion in the six months to September 30, and net operating income of $5.22 billion was also down two per cent on the corresponding prior half.

Mr Moore said Macquarie expects its 2016/17 full year net profit to be "broadly in line" with 2015/16's record $2.06 billion.

"The group remains well positioned, with a strong and diverse global platform and deep expertise across a range of products and asset classes," Mr Moore said.

Macquarie Group shares gained $1.36, or 1.7 per cent, to $81.76.

The half year profit contribution from Macquarie's annuity-style businesses, including Macquarie Asset Management, dropped 15 per cent on the previous corresponding half to $1.64 billion.

Capital markets facing businesses including Macquarie Securities Group maintained their profit contribution at $695 million, in line with the previous corresponding half.

Chief financial officer Patrick Upfold said among the key drivers of the dip in net operating income was an 18 per cent drop in net interest and trading income to $1.86 billion, due to factors including market uncertainty, which limited trading opportunities for Macquarie Securities Group.

Subdued equity capital markets resulted in a 12 per cent drop in fees for mergers and acquisitions, advisory and underwriting.

The sale of businesses and investments contributed to a substantial turnaround in "other" operating income, which was $684 million for the half, compared to an $83 million charge a year ago.

SLIGHT FALL IN PROFIT FOR MACQUARIE

* Net profit down 2pct to $1.05b

* Net operating income down 2pct to $5.22b

* Partly franked interim dividend up 30 cents to $1.90

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