Macquarie Group has halved its dividend after reporting an 8 per cent drop in full year profit, and said challenging market conditions due to the coronavirus pandemic make it hard to predict its fiscal 2021 performance.
Macquarie’s profit for the year ended March 31 fell to $2.73 billion from a record profit of $2.98 billion a year earlier, as it incurred higher credit impairment charges during the year.
The COVID-19 pandemic and ensuing restrictions to curb its spread have wreaked havoc on global economic activity and led to investors repricing assets including stocks and commodities as markets turned volatile.
“The extent to which these conditions will impact the Group’s overall FY21 profitability is uncertain, making short-term forecasting extremely difficult,” the bank said in a statement.
Profit from Macquarie’s market-facing operations, which includes its commodities, markets and capital divisions, plunged 29 per cent for the year, and the company said challenging markets would reduce the number of successful transactions.
Macquarie also forecast reduced investment-related income and subdued consumer activity in the commodities sector for the first half of fiscal 2021.
The bank slashed its final dividend to a partially-franked $1.80 per share, compared with last year’s payout of $3.60 per share.