Macquarie bank profit drops 43%

Australia's biggest investment bank, Macquarie Group, has posted a sharp drop in its first-half profit but said it did not need to raise cash.

The bank's net profit for the six months to 30 September fell 43% to 604m Australian dollars ($400m, £266m) from a year earlier.

The writedowns made by Macquarie reduced its net profit by 395m Australian dollars.

The bank's shares rose 16.5% as the results reassured investors.

In a note to clients, Citigroup said that the group "took its medicine" with huge writedowns.

And other analysts said there had been fears that the group would have been forced to raise cash to cover its losses.

"It's a relief. There'd been some concern about an equity raising in the profit announcement today. That didn't eventuate and the numbers were not too far away from forecasts," said Leigh Gardner at ABN AMRO.

Macquarie's chief executive Nicholas Moore said the bank expected market conditions to remain challenging, "albeit not as bad as those in the immediate aftermath of Lehman Brothers' insolvency."

"We continue to have a range of strong businesses which are well placed over the medium term," said Mr Moore.

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