(Reuters) - Top Australian investment bank Macquarie Group Ltd <MQG.AX> said it expects annual net profit to match the previous year's record regardless of the impact of any new government tax, as performance in its main business divisions remains steady.
The first-quarter trading update from the so-called "millionaires factory" at its annual general meeting served to justify its strategy of pursuing a diversified global income stream from a host of financial services, sending its shares higher.
Sydney-based Macquarie makes money from sources as varied as buying toll roads, advising merger-and-acquisition deals, leasing aircraft and selling mortgages. On Thursday, it said all of its business units were performing in line with the year prior.
That sets it up for a net profit for the year through March on a par with the A$2.22 billion ($1.78 billion) of a year earlier. That would compare with the A$2.3 billion average forecast of nine analysts polled by Thomson Reuters I/B/E/S.
Macquarie shares rose as much as 1.8 percent while the broader market <.AXJO> was up 0.4 percent, as investors weighed the company's guidance against its record of under-promising and over-delivering.
"They've maintained guidance, which is always a good sign. They don't give aggressive guidance," said banking analyst TS Lim at Bell Potter Securities. "I still have a 'buy' (rating) on them."
Macquarie said its infrastructure asset management business, its biggest-earning unit, saw a 4 percent decline in earnings under management in the three months to June 30, but that was offset by favourable foreign exchange movement.
The bank's Corporate and Asset Finance (CAF) unit, which runs car financing and aircraft leasing businesses, as well as investing in junk debt, was broadly in line with the previous quarter, by portfolio size.
The CAF unit's junk debt portfolio has shrunk to its lowest in six years, at A$6.8 billion, sparking a search for new growth opportunities. The portfolio tends to rely on market disruption, and there have been fewer opportunities since the European banking crisis.
Macquarie's capital markets-facing businesses, which include commodities, enjoyed improved trading conditions across most markets, the bank said.
Its mortgage book nudged up 2 percent from three months prior to $29.4 billion.
The Australian government has said it will introduce a tax on the country's four largest mortgage lenders plus Macquarie. On Thursday, Macquarie Chairman Peter Warne repeated earlier concerns that the tax would have a "disproportionately higher impact on Macquarie ... given our business mix is more heavily weighted to wholesale and international business".
Macquarie has said the new tax will cut net profit by about A$50 million.
(Reporting by Byron Kaye; Additional reporting by Jonathan Barrett in SYDNEY and Shashwat Pradhan in BENGALURU; Editing by Christopher Cushing)
