Business

Saturday October 31, 2009

Macquarie set for acquisitions as surplus capital rises


SYDNEY: Macquarie Group Ltd, Australia’s largest investment bank, has grown its surplus capital by almost half to a hefty A$4.5bil (US$4.1bil), giving it muscle to hunt for assets overseas.

Macquarie disclosed the jump in excess capital while posting half-year earnings in line with market forecasts on Friday.

The bank has been raising cash on wholesale markets while seizing on opportunities to buy offshore assets at knock-down prices.

“It’s a good time to be a buyer of assets if you have got the money,” said Angus Gluskie, who manages Australian equities at White Funds Management. “Macquarie is taking advantage of that.”

The bank’s shares rose 2% after the result, in line with a strong rally across the banking sector.

Macquarie has used an Australian government guarantee of bank funding to raise A$10.6bil from debt markets in the global financial crisis.

Meanwhile, it has gone hunting abroad for cheap assets while wounded global rivals retreat to their home markets.

Despite the huge capital surplus, chief executive Nicholas Moore said the bank would continue to expand via organic growth and incremental acquisitions and manage its money cautiously.

The group has been busy on the acquisition trail compared with its global peers, announcing plans this week to buy Canada’s Blackmont Capital for C$93.3mil (US$87.4mil), its fourth acquisition in North America since May. — Reuters

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