Macquarie updates short-term outlook

Presenting at the Jefferies Asia Forum this week, the banking and financial services group revealed that its short-term outlook has been updated since its AGM on 30 July 2020.

The group outlined that market conditions are likely to “remain challenging”, especially given the “significant and unprecedented uncertainty caused by the worldwide impact of COVID-19 and the uncertain speed of the global economic recovery”.

While Macquarie said that there was still uncertainty around how these conditions will adversely impact its overall FY21 profitability (and was therefore unable to provide “meaningful earnings guidance” for FY21), it revealed that it currently anticipates the 1H21 result to be down approximately 35 per cent on 1H20.

Moreover, the group outlined that it anticipates the 1H21 to be down approximately 25 per cent on 2H20.

In 1H20, the group’s operating profit attributable to shareholders was $1.46 billion, falling to $1.27 billion in 2H20.

According to the group, the range of factors that will influence the short-term outlook include external factors such as the duration and severity of the COVID-19 pandemic and the speed of the economy, but also factors such as fewer materials asset realisations and a reduced number of successful transactions (Macquarie Capital), delays in timing of asset sales (Macquarie Asset Management), and a reduced number of Macquarie Capital.

[Related: Credit impairments hit Macquarie’s profits]