Business

Macquarie shares fall 5% as bank issues profit warning

Macquarie office Sydney
Image caption Macquarie has been cutting jobs after the weakening market landscape affected its trading business

Macquarie Group, the largest investment bank in Australia, has said it expects full year profits to drop by 25% as a weak market hurts its business.

Its trading and investment banking operations were the worst hit, the company said in a statement.

Shares of the bank fell 5% in Sydney on the news.

Like other investment banks, Macquarie has had to cut costs and staff in an effort to counter slowing income growth.

Gloomy picture

"Global economic uncertainty has deepened since October 2011, with substantially lower levels of client activity in many markets," said Nicholas Moore, chief executive of the company.

The outlook was grimmer than expected, as most analysts had forecast a fall of 12% in full year profits.

Last year, the bank reported a net profit of $956m Australian dollars ($1bn; £653.8m).

Macquarie also said it had cut 928 jobs since March 2011. Analysts said the cuts were of a similar scale to other global investment banks.

Last month rival Goldman Sachs reported a 47% drop in earnings for 2011 and cut 2,400 jobs.

The company added it will carry out a buy-back of up to 10% of its shares. The move is subject to regulatory approval.

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