Macquarie Group shares are trading at a record high after the investment bank announced an on-market buyback of up to $1 billion and a first-half profit of $1.25 billion.
Chief executive Nicholas Moore said the buyback was on the back of the group's strong $4.2 billion capital surplus and would enable additional flexibility in Macquarie's capital position.
The bank also announced that former Reserve Bank of Australia governor Glenn Stevens will join the boards of Macquarie Group and Macquarie Bank as an independent director from November 1.
Macquarie's net profit for the six months to September 30 was up 19 per cent, while net operating income was up 3.4 per cent at $5.4 billion.
The result surpasses analysts' expectations of a $1.14 billion profit, driven by $530 million in performance fees across Macquarie's asset management division.
Among the key drivers of the net operating income rise was a 17 per cent lift in fee and commission income to $2.6 billion.
The group's asset management, banking and finance annuity businesses' net profit contribution was up 28 per cent on the previous corresponding period and 30 per cent on 2017's second half.
The business, which includes Macquarie Asset Managment and the group's banking services, represented around 80 per cent of Macquarie's first-half performance.
Mr Moore said Macquarie's 2018 full-year result was expected to be "slightly up" on the previous year's $2.2 billion on the back of the strong first-half result.
"I think it is very much a result of what we have seen in the first half," Mr Moore told analysts on Friday.
"The first-half result has, obviously, been stronger than where we were last year, so that, obviously, sets us up very good for the full year."
But, he said, given the substantial performance fees in the first-half, he anticipates second-half results will be lower and broadly in line with the group's 2017 second-half.
The group raised its interim dividend 15 cents to $2.05 per share, 45 per cent franked.
Macquarie shares were up $3.09, or 3.3 per cent to $97.31 at 1344 AEDT.
MACQUARIE'S HY FIGURES
* Net profit up 19pct to $1.25b
* Net operating income up 3.4pct to $5.4b
* Interim dividend up 15 cents to $2.05 per share, 45 per cent franked
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