Macquarie Group has shrugged off a disappointing first quarter result and delivered a relatively upbeat profit outlook for 2015.
The financial services group's earnings took a hit during the three months to June due to weaker performances from its markets-facing businesses but still expects its full year result to be roughly in line with its 2014 result.
That would be a more impressive result than it sounds, given Macquarie lifted its profit 49 per cent to $1.265 billion in the year to March 31, helped in part by a $228 million gain from the sale of its stake in Sydney Airport.
Chief executive Nicholas Moore said Macquarie had the potential to produce a better-than-expected result, depending on market conditions.
"Overall we expect the group to be broadly in line this year with the result that we delivered last year," he said.
"Now, obviously if market conditions are better during the current year than we can expect to see a better result for the year."
But investors were unimpressed, pushing Macquarie shares down $1.87 to $59.40 by 1552 AEST.
Macquarie said the profit contribution from its capital markets-facing business fell during the June quarter, while profit from its annuity-style business was broadly in line with a year ago and the prior quarter.
It expects its overall performance to improve during the second quarter but says it faces challenging market conditions while foreign exchange movements, the cost of its conservative approach to funding and capital, potential regulatory changes and tax uncertainties could impact in the short term.
Meanwhile, chairman Kevin McCann has defended Macquarie's political donations in the face of shareholder objections at the company's annual general meeting.
Macquarie is among the biggest corporate political donors in Australia and donated more than $335,000 to major political parties during the 2013 financial year.
The Liberal Party was the biggest beneficiary, receiving almost $188,000, followed by Labor, which received $131,000, while the Nationals were given $16,500.
Several investors, including the Australian Shareholders' Association spokesman Stephen Mayne, called on Macquarie to end cash donations to political parties.
But Mr McCann argued the payments were part of Macquarie's contribution to Australia's political system.
"We have been consistent at Macquarie over many years, we believe we need a political process that is vibrant and part of that is supporting mainstream political parties," he told the shareholder meeting in Sydney.
"That leads to a healthy, transparent economy and strong democratic process."
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