Friday, May 1, 2009

International Toll Investor, Macquarie posts losses

May 1, 2009
Macquarie Posts Decline in Annual Profit

SYDNEY — The largest Australian investment bank, Macquarie Group, posted its first fall in annual profit in 17 years Thursday, citing billions of dollars in losses stemming from the global slowdown.

Macquarie said net profit for the year that ended March 31 had fallen 52 percent to 871 million Australian dollars, or $635 million, from a record 1.8 billion dollars the year before. The widely expected result fell just short of the bank’s February profit forecast of 900 million dollars.

Later in the day, the bank confirmed it had raised 540 million dollars in an institutional placement of new shares at 27 dollars per share, Reuters reported.

Though Macquarie and other large Australian banks have been largely insulated from the pain suffered by their counterparts on Wall Street and in Europe, the result released Friday was the investment juggernaut’s worst since 1992, during the country’s previous recession.

Macquarie blamed “testing global market conditions” for the result, which included 2.5 billion dollars in one-time losses. Listed among the write-downs were 1.47 billion dollars in losses associated with managed funds and infrastructure assets; 496 million dollars in bad loans, mostly for property and mineral investments; and 248 million dollars in costs from the sale of its Italian mortgage business.

On the upside, Macquarie touted its relatively healthy balance sheet, with cash and liquid assets totaling 30.8 billion dollars and total capital of 10.2 billion dollars, which is 3.1 billion dollars more than the minimum required by Australian regulators.

Nevertheless, the bank requested Thursday that trading in its shares be halted while it considered plans to raise additional capital. There were no further details of the plans in the bank’s statement to the Australian Securities Exchange on Friday, but the Macquarie chief executive, Nicholas Moore, warned of continued uncertainty ahead.

“While there were some early signs of markets stabilizing in March and April,” Mr. Moore said, “significant uncertainties remain, and it is still too early to make any judgments on sustained market improvements.”

Until now, Macquarie has been one of the few banks around the globe that have not approached its shareholders for more money since the financial meltdown began last year.

Tim Schroeders, a portfolio manager at Pengana Capital, said that the announcement made Thursday was more of a reflection of changing banking conditions than a sign of trouble at Macquarie.

“The leverage that was previously in the banking system prior to the global financial crisis is no longer prudent, and as a result, banks are requiring more capital and returning less on that capital,” he said. “There are going to be adjustments required to reposition the business to be optimally profitable over the next 10 years.”
Read more in the New York Times

Fair Use

FAIR USE NOTICE: This site contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. Material from diverse and sometimes temporary sources is being made available in a permanent unified manner, as part of an effort to advance understanding of the social justice issues associated with eminent domain and the privatization of public infrastructure. It is believed that this is a 'fair use' of the information as allowed under section 107 of the US Copyright Law. In accordance with Title 17 USC Section 107, the site is maintained without profit for those who access it for research and educational purposes. For more information, see: To use material reproduced on this site for purposes that go beyond 'fair use', permission is required from the copyright owner indicated with a name and an Internet link at the end of each item. [NOTE: The text of this notice was lifted from]

See ARCHIVE on side bar

Content is being archived weekly. Many pertinent articles regarding Transportation in the DFW Region are in the archives.

A government big enough to give you everything you want, is strong enough to take everything you have. - Thomas Jefferson

The Opnions On this Site are Diverse

DFW Regional Concerned Citizens attempts to examine issues from all directions. When a story says "By Faith Chatham" it contains my viewpoint. When it is by others, but posted by Faith Chatham, it is from someone else's viewpoint. When I discover contents which is on topic for this site, I frequently link to other sites. Usually those sites contain content which differs from my viewpoint (and frequently that of other members of DFW-RCC).