Macquarie has posted a cautiously optimistic update on its business activity, predicting its full-year 2016 result will be up on the previous year.
In an update to shareholders ahead of its full-year reporting period, which ends on 31 March 2016, Macquarie said the full-year 2016 combined net profit is expected to be up on the 2015 full-year result.
For the March 2016 quarter, Macquarie's annuity-style businesses – Macquarie Asset Management, Corporate and Asset Finance and Banking and Financial Services – reported a decrease in net profit which was down on the September 2015 quarter.
However, the contribution of the annuity-style business in the March 2016 quarter was up on the December 2014 quarter.
The statement indicated that the dispersion in results can be attributed to high-performance fees which were achieved by the group's asset management arm in September.
Macquarie Asset Management had assets under management of $487.2 billion at 31 December 2015, down three per cent from 30 September 2015, a statement to the ASX said.
The statement said the loss was driven by unfavourable spot exchange rate movements.
Within its banking and financial services arm (BFS), Macquarie said its platform assets under administration increased to $59.8 billion as at 31 December 2015, up 28 per cent on 30 September 2015.
Macquarie’s capital markets-facing businesses' – Macquarie Securities, Macquarie Capital and Commodities and Financial Markets – combined December 2015 net profit contribution was down on the prior corresponding period but up on the prior period.
Macquarie Group's managing director and chief executive, Nicholas Moore, said the capital markets facing businesses trading conditions reflect current market uncertainty.
Looking forward, Macquarie expects the 2015-16 results to be up on 2014-15.
"Macquarie remains well positioned to deliver superior performance in the medium term due to its deep expertise in major markets, strength in diversity and ability to adapt our portfolio mix to changing market conditions, the ongoing benefits of continued cost initiatives , a strong and conservative balance sheet, and a proven risk management framework and culture," Mr Moore said.
Nonetheless, the group's short-term outlook remains subject to challenges such as market conditions, the impact of foreign exchange, the cost of funding and capital and regulatory changes and tax uncertainties, the statement said.