Macquarie Group Profit More Than Doubles in Second Half

The second half was dynamite for Macquarie Group, as their profit in the second half was over twice what it was in the first half, and guidance for the next fiscal year is that they will generate even higher earnings.

For the six-month period ending March 31, Macquarie Group's profits rose to $531 million (A$571 million) from the same half the year before, which was A$267 million.

Not only did Macquarie say they were going to do well in the next year, but in a statement from Chief Executive Officer Nicholas Moore, he expects every unit of the company to have profitable operating results; quite a positive guidance considering the pressure it puts on the bank to back it up.

The key for Macquarie to do that will be determined by how much extra capital they have and how fast and accurately they can invest it.

Estimates of profits for the entire year were almost identical to what analysts at Bloomberg had projected, coming in at A$1.05 billion, just above the projected A$1.03 billion.

Even with all the optimism thrown around, Macquarie did offer some caveats with their guidance, saying it “remains subject to a range of other challenges including increased competition across all markets, the cost of maintaining a conservative approach to funding and capital, and regulation."

A number of other financial institutions across the world have offered positive statements similar to Macquarie, and it does make me wonder if they really can pull it off, or if they're neglecting too much of the very real weaknesses still residing in the global economy, with the most obvious one being the sovereign debt crisis in the European Union.

Over the last year Macquarie has had its share price soar by 52 percent, as they were able to remain profitable throughout the recession, and the cash position of the company was increased, giving the company opportunities to expand, which they have during that period of time, with probably the most important one being Fox-Pitt Kelton Cochran Caronia Waller LLC.

The key market Macquarie wants to grow in is investment banking, as their focus on emerging markets should be successful in that regard as a growing number of high net individuals and strong companies are in need of that type of service, and now have the money to spend on it.