Macquarie slumps after “satisfactory” quarter

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It sounds like the sort of comment you’d see on a school report, and investors have given Macquarie Group a caning after the Australian investment bank trimmed guidance for one of its key business units.

The “Silver Doughnut” said in its quarterly update that trading operations across the company “were satisfactory in the December 2015 quarter” and still expects its financial year 2016 result to be up on the previous year.

However, it flagged that its commodities and financial markets group – historically its second-biggest contributing unit to net profit – has performed worse than previously expected. In October, Macquarie said it expected the unit’s result to be “broadly in line with FY15″ when it contributed A$0.8bn to net profit.

Today, management updated their outlook and said the unit’s performance is down on FY15.

whilst YTD performance has been broadly in line with [the previous corresponding period], currently expect 4Q16 trading to be lower than 4Q15.

In October, Macquarie said four of its other five main operating groups were supposed to deliver better FY16 performances than FY15. (Corporate and asset finance expected, like commodities and financial markets, to be broadly in line.) Today it has stuck with those other forecasts.

Ninety minutes into the Australian session, Macquarie shares were down 5.2 per cent at one-year low of A$64.72, but had fallen as much as 9.4 per cent in early trade. Since closing at a record high A$84.04 on October, the company is down 23 per cent.

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