7 Sep 2010

Forecast cut by Macquarie

9:10 am on 7 September 2010

Shares in Australia's biggest investment bank, Macquarie, fell sharply after the company cut its profits forecast on Monday.

Macquarie said weak global markets were hitting earnings at its key units, including currencies and commodities.

The bank said first-half profits would be 25% lower than the same period a year earlier. Analysts had been expecting an 11% rise.

At one point the shares were down by 8%, although they finished down 4.7%. The shares closed at $A35.25, a 15-month low.

Macquarie not only said that net profit for the first half would drop sharply, but also forecast that full-year profit would only match last year's level.

It also reiterated that uncertain conditions made short-term forecasting "very difficult".

The BBC reports the forecasts followed two earlier warnings on market conditions. Analysts and investors have called on the bank to either cut jobs or pay, to protect earnings.

Macquarie earns almost half of its revenue in Australia.