Not even the mighty Macquarie Group can escape the impact of the COVID-19 pandemic and measures taken to control its spread.
Macquarie chopped its final dividend in half and warned of challenging market conditions, as earnings for the year to March 31 fell 8% on the back of charges for bad debts caused by the coronavirus.
It will pay a final dividend of $1.80, half 2019’s final following pressure from the regulator, APRA for banks to conserve capital in response to the crisis.
“The final months of the financial year were overshadowed by the profound human impact of the COVID-19 global health crisis and its economic consequences,” chief executive Shemara Wikramanayake said in Macquarie’s ASX filing on Friday.
The bank reported an 8% dip in full-year profit to $2.7 billion, with most of the slide caused by a sharp increase in credit and other impairment charges.
In February Macquarie said it was expecting full-year profits to be down slightly on 2018-19’s $3 billion, but the pandemic and the lockdowns and social distancing measures meant that was guidance that would never be met.
In its outlook, the bank said market conditions were likely to remain challenging as a result of the economic uncertainty created by the pandemic, and it was uncertain how this would affect the coming year’s profits.
It said short-term forecasting was “extremely difficult” and the bank could not provide meaningful guidance.
“We continue to maintain a cautious stance, with a conservative approach to capital, funding, and liquidity that positions us well to respond to the current environment,” Ms. Wikramanayake said.
Macquarie joins the NAB in cutting dividends. The NAB dropped its interim payout to 30 cents a share from 80 cents), while the Bank of Queensland, ANZ and Westpac have deferred their dividends for the half-year to March 31.
