Macquarie Bank Group announces £99 million first half profit - underpinned by strong European earnings

13 November 2003

LONDON -  Macquarie Bank Group today announced a £99 million ($A242 million) profit after tax attributable to ordinary shareholders for the half-year to September 20, 2003. The result was underpinned by a strong rise in international income, particularly from European businesses.

The interim result is an increase of 32 per cent over the £75 million ($A183 million) profit for the half-year ended September 30, 2002.

Macquarie Bank Managing Director and Chief Executive Officer Allan Moss said the record result reflected the strengths and diversity of Macquarie's businesses, with contributions form the Bank's international operations - based in 22 locations - particularly pleasing.

Macquarie Bank Europe Head Jim Craig said European operating income rose by 37 per cent over the result for the previous corresponding half-year period. "Macquarie has now been active in the UK for more than 15 years and the half-year result is the culmination of many years of serving clients across a diverse range of businesses," Mr Craig said.

"European highlights included a strong result from our restructured European equity-based structuring business. Advisory fees contributed to the result, particularly from Public Private partnership projects - Macquarie now has the largest dedicated private sector PPP team in the UK."

"Macquarie was joint global co-ordinator and bookrunner on the successful float of Promina, the Australian and New Zealand businesses of Royal & Sun Alliance PLC - one of the world's top 5 floats this year," Mr Craig said.

Other business highlights for the six month period included the establishment of a commodity derivatives alliance with The Royal Bank of Scotland in August 2003, which leverages the skills of Macquarie's existing commodities businesses.

Mr Craig said that since balance date at September 30, Macquarie had acquired two seed assets for the proposed Macquarie European Infrastructure Fund, a new wholesale vehicle that will target investments in infrastructure and related assets located in European OECD countries. The assets were UK water utility South East Water for £386 million ($A948 million), and Sweden's Arlanda Express airport rail link for €45 million ($A76 million). The Bank's intention is to transfer the assets to the Fund within six to nine months.

Mr Moss said the half-year result showed the Bank was benefiting from an improvement in equity markets and from a policy of continuing to invest through the business cycle.

Mr Moss said the substantial increase in international income despite the strong Australian dollar was a highlight of the result. "Particularly pleasing was the diversity of international income, with contributions from across all major regions," Mr Moss said.

OUTLOOK

Mr Moss said current Australian market conditions are exceptionally favourable and international market conditions are favourable, with high volumes in most markets. "We are also experiencing markedly improved investor confidence, improving corporate confidence and continuing good credit quality," he said.

"In the current year we expect to continue to benefit from these positive conditions and anticipate the second half will be significantly up on the prior corresponding period, but, as usual, below the first half due to the timing of performance fees."

"Over the medium term we expect to benefit from growth initiatives across our businesses and we expect international growth to continue. However, we will continue to be influenced by market conditions and therefore caution should be exercised in extrapolating from the current year."

Notes to Editors:

The Macquarie Bank Group provides specialist investment, advisory and financial services in select markets around the world. Headquartered in Australia, the Group has 5000 people in 22 international locations. Macquarie's European regional base is London where we have over 200 people, with additional offices in Dublin, Frankfurt, Geneva, Munich and Vienna.

For further information please contact:

Jim Craig
Head of Macquarie Bank Group, Europe
Tel: +44 (0)20 7065 2016

Alison Jefferis
Corporate Communications
Macquarie Bank
Tel: +44 (0)20 7065 2335
Mob: +44 (0)79 1938 2958

Andrew Waterworth
Financial Dynamics
Tel: +44 (0)20 7269 7127
Mob: +44 (0) 7771 740484