Macquarie Wins as Australia Suffers From Commodity Rout

(Bloomberg) – What’s bad for Australia is good for its largest investment bank. Macquarie Group Ltd. is gaining from the slump in resource prices that’s hurting the commodities-driven economy, and from market turbulence that’s denting the profits of its global banking competitors, according to analysts at Deutsche Bank AG and Morningstar Inc. The decline in energy and mineral prices combined with policy shifts by the world’s biggest central banks is stirring up volatility and creating money-making opportunities for Macquarie’s fixed-income, commodities and currencies business. The unit is expected to post a record A$830 million ($660 million) profit in the year ending March 31, according to the average estimate of five analysts surveyed by Bloomberg News. Macquarie generates almost two-thirds of its revenue from abroad, limiting the impact of an Australian economy that grew at the slowest pace in 18 months in the third quarter of 2014. Its FICC division, which gets most of its business from commodities, focuses on transactions for clients rather than making markets, helping it to benefit from swings that eroded trading income at U.S. peers including JPMorgan Chase & Co. “Macquarie has invested heavily in the commodities space, especially in the U.S., and is starting to … continue reading

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