Macquarie Group Ltd will combine two of its three capital-markets businesses as Australia’s biggest investment bank seeks to bring its trading activities under one roof.
The securities firm cited the desire to streamline operations and provide clients with an integrated service across global markets as the motivation for the merger, along with “industry changes,” according to a statement released yesterday.
The firm led by chief executive officer Nicholas Moore is becoming more cautious about the outlook for its cyclical businesses.
It cut about half of its investment-banking workforce in Asia last year and earlier this year eliminated about 30 positions at its equities unit in the region.
While there are no plans for imminent job cuts in the new unit, headcount reductions could come from natural attrition, a person familiar with the matter said.
The world’s largest infrastructure manager, which has seen its profit almost treble since 2012, is now starting to face headwinds.
Net income declined 2 percent in the six months ending on Sept. 30, according to its most recent regulatory filing.
Profit attributable to its capital market-facing business fell 34 percent from a year earlier, the bank said in a presentation in October.
Before yesterday’s announcement, some analysts had said the Australian investment bank was preparing for tougher times.
“While Macquarie remains optimistic in management commentary, its actions speak differently,” Jonathan Mott, an analyst at UBS Group AG, wrote in a note on Oct. 28 following the bank’s most recent results.
A reduction in equity investments, a drop in loans and leases and declining headcount in almost every division are among signs that Macquarie is “preparing for a more difficult environment,” he said.
The merger of the Securities Group and the Commodities and Financial Markets Group will bring together the firm’s execution, research, derivatives, trading, fixed-income, foreign-exchange and commodities businesses, Macquarie said.
Andrew Downe, who has headed Macquarie’s Commodities and Financial Markets Group since 1997, will take charge of the new Commodities and Global Markets Group. Stevan Vrcelj, who ran the Securities Group, will step down from both his current role and the executive board.
Macquarie has a separate group that handles businesses including mergers, debt and equity capital markets and principal investments.
Analysts remain confident that Macquarie will be able to ride out the challenges. Of 16 surveyed by Bloomberg, eight rate the firm a buy, six a hold and just one a sell.
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