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ANZ reveals $360m in profit write-downs, Macquarie earnings slip 2pc but beat guidance

Friday, 28 Oct 2016 06:10:06 | Michael Janda

Macquarie Group has reported a 2 per cent slide in half-year profit to $1.05 billion. (Sergio Dionisio: AAP Images)

ANZ is the latest bank to reveal earnings pressure, revealing $360 million in profit write-downs, while Macquarie reports a 2 per cent slide in profit but a $1.05 billion result that beats guidance.

While Macquarie saw its earnings fall compared to the same time a year ago, its first-half profit of $1.05 billion was up 6 per cent on the second half of the 2016 financial year.

The profit number has also beaten the bank's recent forecasts, which anticipated a number just below a billion dollars.

"Macquarie in September stated at the CLSA (an investment bank) conference that it expected this result to be broadly in line with the second half 2016 result for the six months to March 31, 2016 (subject to period end reviews and the completion rate of transactions)," Macquarie observed.

The bank also said the first half of financial year 2016 was a particularly strong result.

Macquarie said it had $493 billion worth of assets under management as at the end of September, up 3 per cent from the end of March.

The global investment bank, which now draws 60 per cent of its income from outside Australia, said its earnings per share were down 4 per cent on the same time a year ago, but up 6 per cent on the previous half.

The company's return on equity also dipped from the same time a year earlier to 14.6 per cent.

Macquarie's interim dividend of $1.90 a share (45 per cent franked) was up on the same period a year earlier, but down on the previous half's dividend of $2.40.

ANZ flags charges ahead of profit results

Meanwhile, ANZ has elected to take out some trash ahead of its full-year financial results next Thursday, flagging $360 million worth of "specified charges".

ANZ said it will take a $168 million after-tax charge as a reduction to its institutional markets revenue due to an "enhanced methodology" for determining the fair value of financial derivatives, which are basically bets on the price movements of certain assets, often used by banks to "hedge" against the risk of unfavourable price movements, such as in currencies.

The bank is also booking $100 million in restructuring costs, which it said relates to "underpinning further prductivity through reshaping the workforce, reducing complexity and duplication".

The remainder of the one-off charges include changes to the group's software capitalisation policy and adjustments related to the divestment of the Esanda Dealer Finance division.

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