Macquarie Group Forecasts Earnings Growth to Slow

Macquarie Group Ltd., Australia's biggest securities firm, said a rally in equity markets may falter in the second half, making it harder to repeat its record 45 percent profit growth of the first six months.

Net income rose to a record A$1.06 billion ($931 million) in the six months to Sept. 30, from A$730 million a year earlier, the Sydney-based bank said in a statement today. The stock fell after Chief Executive Officer Alan Moss said second-half earnings won't match first-half profit.

Macquarie generated two-thirds of revenue from Asia, where stocks excluding Japan have climbed 33 percent this year, helping it withstand a collapse in the U.S. subprime mortgage market that sparked $45 billion of writedowns from global rivals. Equity markets ``may not continue to be as favorable,'' the bank said.

``There was a lack of clarity and a degree of conservatism in the outlook that is pushing the shares lower,'' said Sean Fenton, who helps manage the equivalent of $832 million, including Macquarie stock, at Jenkins Investment Management in Sydney. ``What's clear in this result is just how untouched the company has been by the subprime crisis.''

Macquarie's shares fell 3.7 percent to A$79 at the close in Sydney. The stock has risen 23 percent since touching a year-low of A$64 in August as investors heeded Moss's assurance that Macquarie has ``no material problem credit exposures.''

The company will pay a dividend of A$1.45 a share compared with A$1.25 a share a year earlier. That's less than the A$1.62 that analysts at Citigroup estimated, and the A$1.65 forecast by Credit Suisse Group.
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