Macquarie Group flags $300m profit hit

Macquarie, which generates revenue from helping clients trade and strike deals when the markets are stressed, said the strong client activity earlier in the year “did not continue” into the latter half and was “not expected to continue” in the near future.

“Market conditions are likely to remain challenging, especially given the significant and unprecedented uncertainty caused by the worldwide impact of COVID-19 and the uncertain speed of the global economic recovery,” Macquarie said.

“The extent to which these conditions will adversely impact our overall FY21 profitability is uncertain, making short term forecasting extremely difficult.”

Due to the current crisis, Macquarie has been unable to provide earnings guidance for the first time since the 2008 global financial crisis.

As the government shutdown has resulted in a number of Macquarie assets being significantly impacted, the company has moved to repurpose some of its airport carparks to be used to COVID-19 testing, while offering free parking for some Spanish health workers, and deploying its Dovel Technologies unit to review antiviral clinical trials. Macquarie’s banking and financial services arm is hiring furloughed workers from other industries to help meet greater customer service demand.

The company said 13 per cent of Macquarie clients were accessing some form of hardship assistance.

Macquarie said there was a “gradual, voluntary” return to the office where it was safe to do so. More than 98 per cent of staff had been working remotely at the peak of the pandemic.

Macquarie recently posted an 8.4 per cent drop in full-year profit to $2.7 billion and a final dividend reduced by half and warned the economic recovery was unlikely to be a “V-shaped” bounce-back but a more drawn-out affair.

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