By Scott Murdoch and Sameer Manekar
SYDNEY, Nov 6 (Reuters) - Australian investment bank Macquarie Group posted record first-half profit on Friday and incoming CEO Greg Ward continued to strike a positive note, saying that volatility among global AI and tech stocks can be positive.
His comments come amid a sharp global market selloff led by AI-linked stocks as investors fret that the Democratic sweep at US midterm elections will lead to further regulatory scrutiny of the industry and slower economic
growth.
"I think the equity market volatility that we've seen is in some ways a good thing as you want markets to be taking notice of these risks that exist," said Ward, the bank's former chief financial officer and retail banking boss.
"Investment in data centres and digital infrastructure in the last two years relative to the last big wave of technology investment is very rapid."
"What's coming with that is a very large ramp-up in income for these companies and so I think the equity markets are evaluating what the appropriate carrying value of these stocks is."
Macquarie said six-month net profit surged 50% to A$2.5 billion ($1.7 billion), beating a Visible Alpha consensus estimate of A$2.3 billion.
Macquarie has often been adept at capitalising on turbulence in markets, and volatile energy prices stemming from the Middle East conflict helped drive a robust performance for its commodities and global markets division.
The business logged an 83% jump in its net profit contribution to A$2.03 billion, while the profit contribution from its asset management division climbed 28%.
Shareholders were rewarded with an interim dividend of A$3.25 per share, up from A$2.80 for the same period last year.
It was a blockbuster swansong for CEO Shemara Wikramanayake after eight years at the helm. In a career of nearly 40 years at the bank, Wikramanayake led nearly all of Macquarie's major divisions. She is one of Australia's top corporate leaders and the country's most high-profile female chief executive.
"I have found it really stimulating and I love that every chapter of it is completely different because I'm somebody that likes change and newness and being stretched," Wikramanayake told Reuters.
Separately, the country's prudential regulator, in a recent capital review, identified that Macquarie in 2019 had miscalculated the amount of capital required to support risks within its non-banking businesses.
That prompted an A$100 million governance overlay, an extra capital buffer, on top of an existing A$500 million capital overlay the regulator had applied to Macquarie Bank in 2021.
Shares in Macquarie ended down 3.7%, underperforming a 0.5% decline for the broader market.
($1 = 1.4382 Australian dollars)
(Reporting by Scott Murdoch in Sydney, Sameer Manekar and Roshan Thomas in Bengaluru; Editing by Leroy Leo and Edwina Gibbs)
