SYDNEY (BLOOMBERG) - Macquarie Group cut 503 jobs in its first fiscal half, the most in three years, as chief executive officer Nicholas Moore reduced the investment bank's reliance on cyclical businesses such as trading and advisory to deliver a record profit.
The firm employed 13,582 as of Sept 30 down from 14,085 six months earlier, with almost two-thirds of the reductions in Australia, earning statements show. That helped the country's largest investment bank narrow the cost-to-income ratio, a measure of efficiency, to 69.6 per cent, the lowest since at least 2001, according to filings. Shares rose to a three-month high.
Mr Moore, who has focused on expanding Macquarie's lending, leasing and fund-management arms, cited some asset sales and the addition of technology to replace job functions. Banks worldwide, including Deutsche Bank and Credit Suisse, have been trimming jobs amid a multi-year slowdown in trading revenue and increased compliance costs.
Macquarie's banking and wealth management business has spent a "lot of money in technology," Mr Moore said on an investor call. "The benefits of the technology spend is coming through."
The leasing and corporate lending unit sold businesses last year, which reduced the number of employees, he said. The acquisition of an auto dealer-finance portfolio from Australia & New Zealand Banking Group Ltd. will reverse the trend in that business.
Macquarie shares gained 2.2 per cent to A$85.83 as of 12:59 pm in Sydney, on track to close at the highest in eight years. That extended this year's advance to 47 per cent compared with a 3.4 per cent drop in the benchmark S&P/ASX 200 Index.
The banking and financial services unit employee count dropped by 255, while the corporate lending and leasing business saw numbers fall by 130 in the first half, according to a presentation. The bank added staff in the Europe, Middle East and Africa region and in its commodities and financial markets business.
The bank posted a 58 per cent increase in profit in the six- months ended Sept 30 to A$1.07 billion (S$1.06 billion) on higher performance fees from fund management and currency gains. The Sydney-based firm forecasts full-year earnings to be higher than the previous 12 months.
The bank's earnings compare with falling quarterly profits and trading income at US competitors Goldman Sachs and Morgan Stanley. Firms such as Credit Suisse and Barclays Plc are pulling back from some trading operations as investors hold back from buying and selling assets amid concerns about a slump in the price of oil, higher US interest rates and a Chinese economic slowdown.
Commonwealth Bank of Australia cut 20 roles across its global markets business to reduce costs, it said on Oct 27.