Macquarie profit ‘substantially’ down; commodities head resigns

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MACQUARIE Group’s profit fell due to reduced activity in its commodities and global markets business, while the veteran head of the division will step down later this month.

Earnings for the nine months ended Dec 31 were “substantially down on the previous year”, due partly to the exceptionally strong results in the prior period, the Sydney-based firm said on Tuesday (Feb 13). Its annuity-style business saw lower asset realisations in green investments and margin compression along with runoff in the car loan portfolio.

“Underlying client franchises were resilient in ongoing uncertain conditions with continued customer growth, fundraising and new business origination a feature across all of our businesses,” chief executive officer Shemara Wikramanayake said.

Nicholas O’Kane, a 28-year veteran of the firm, will step down as head of commodities and global markets and from Macquarie’s executive committee, effective Feb 27, to “pursue opportunities outside Macquarie”. Simon Wright, currently global head of CGM’s financial markets division, becomes group head of CGM and will join the executive committee from Apr 1.

With Macquarie shares up around 20 per cent since early November, expectations were riding high that the diversity of the firm’s businesses would cushion any weak spots for individual units. Wikramanayake is expected to address analysts and the media on a call today, having last year flagged that profit from green energy divestments within Macquarie Asset Management would likely be skewed to the second half of the year.

The bank on Tuesday said net other operating income for the second half of 2024 is expected to be substantially down on last year. BLOOMBERG