Macquarie sees record profit after cutting 503 jobs

SYDNEY • 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 had 13,582 staff as of Sept 30, down from 14,085 six months earlier, with almost two-thirds of the reductions in Australia, earnings statements show.

The cut helped the country's largest investment bank narrow its cost-to-income ratio - a measure of efficiency - to 69.6 per cent, the lowest since at least 2001, according to filings. Macquarie 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 rising compliance costs.

Macquarie's banking and wealth management business spent a "lot of money on technology", Mr Moore said during a call with investors. "The benefits of the technology spend are 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 the Australia & New Zealand Banking Group should reverse the trend in that business.

Employee count at the banking and financial services unit dropped by 255 in the bank's first half, while the corporate lending and leasing business saw numbers fall by 130, according to a presentation.

The bank added staff in Europe, the Middle East and Africa, and at its commodities and financial markets business.

It posted a 58 per cent increase in profit for the six months ended Sept 30 to A$1.07 billion (S$1.07 billion), because of higher performance fees from fund management and currency gains. It forecasts earnings for the full year will be higher than for the previous 12 months.

BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on October 31, 2015, with the headline 'Macquarie sees record profit after cutting 503 jobs'. Print Edition | Subscribe