Macquarie share price sinks 5% on 'substantially down' profits

Macquarie has had a tough start to the new financial year.

| More on:
A young woman holds an open book over her head with a round mouthed expression as if to say oops as she looks at her computer screen in a home office setting with a plant on the desk and shelves of books in the background.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • Macquarie shares are sinking on Thursday following the release of its quarterly update
  • The investment bank has reported a substantial but unspecified profit decline
  • Management is cautious on its near term outlook

The Macquarie Group Ltd (ASX: MQG) share price is trading lower on Thursday morning.

At the time of writing, the investment bank's shares are down 5% to $174.34.

Why is the Macquarie share price falling?

Investors have been selling down the Macquarie share price this morning after the company released a first-quarter update ahead of its annual general meeting.

According to the release, weaker trading conditions saw Macquarie's operating groups deliver a quarterly net profit contribution that was substantially down on the prior corresponding period.

Macquarie's annuity-style businesses, Macquarie Asset Management (MAM) and Banking and Financial Services (BFS), combined profits were "substantially down" due to lower investment-related income from green energy investments in MAM. BFS' contribution was actually significantly up on the prior corresponding period thanks to growth in the loan portfolio and deposits, together with improved margins.

It was the same story for Macquarie's markets-facing businesses, Commodities and Global Markets (CGM) and Macquarie Capital. They reported a combined net profit contribution that was substantially down. Management blamed this on tough comparables for CGM and lower investment-related income for Macquarie Capital.

Outlook

For the short term, management advised that it continues to maintain a "cautious stance", with a conservative approach to capital, funding, and liquidity. It feels this positions the bank well to respond to the current environment.

Looking further ahead, management believes Macquarie is well-positioned to deliver superior performance in the medium term due to its diverse business mix across annuity-style and markets-facing businesses.

This will be supported by its "deep expertise across diverse sectors in major markets with structural growth tailwinds; patient adjacent growth across new products and new markets; ongoing technology and regulatory spend to support the Group; a strong and conservative balance sheet; and a proven risk management framework and culture."

Should you invest $1,000 in Macquarie Group Limited right now?

Before you buy Macquarie Group Limited shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Macquarie Group Limited wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 30 April 2025

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Earnings Results

Lines of codes and graphs in the background with woman looking at laptop trying to understand the data.
Earnings Results

Westpac share price sinks on half-year results miss

Let's see how the big four bank performed during the first half.

Read more »

Miner looking at a tablet.
Gold

Newmont share price lifts off on first-quarter results

The ASX 200 gold stock is charging higher on Thursday.

Read more »

A man wakes up happy with a smile on his face and arms outstretched.
Healthcare Shares

ResMed shares jump 8% on strong Q3 update

It was yet another strong quarter from this high-quality company.

Read more »

A woman sits at her computer with her chin resting on her hand as she contemplates her next potential investment.
Financial Shares

Up 53% in a year, why is this ASX 200 financial stock leaping higher again today?

Investors are sending the ASX 200 financial stock soaring on Wednesday. Let’s see why.

Read more »

Man with rocket wings which have flames coming out of them.
Share Gainers

Why is this ASX 200 uranium stock rocketing 17% on Wednesday?

The ASX 200 uranium stock is racing higher today. But why?

Read more »

Piggy bank at the end of a winding road.
Dividend Investing

Why this $44 billion ASX 200 dividend stock is pushing higher today

The ASX 200 dividend stock trades on a yield of 4.6%.

Read more »

Workers inspecting a gas pipeline.
Energy Shares

Why is the Santos share price racing ahead of the ASX 200 today?

Santos shares are enjoying a day of strong outperformance. But why?

Read more »

A man holds his hand under his chin as he concentrates on his laptop screen and reads about the ANZ share price
Financial Shares

What's happening with the AMP share price on Thursday?

A lot of AMP shares are changing hands on Thursday. But at what price?

Read more »