The first business impact of UK’s decision to quit the European Union was visible in Macquarie Group’s operational update.
Australia’s largest investment bank, which gets nearly a quarter of its revenue from Europe, the Middle East and Africa, has so far remained tight-lipped on the potential Brexit fallout to its businesses. CEO Nicholas Moore said in October that the pound’s slump will hit the group’s UK earnings and a team was assessing the impact of Britain’s impending split from the EU.
In a presentation on Tuesday, Macquarie said certain leasing and corporate loan portfolios were impacted by “unfavourable foreign exchange movements”, largely due to weakening pound. It listed the currency’s fall among factors affecting the company’s short-term outlook.
Macquarie is a large player in UK infrastructure, with investments in assets ranging from power stations to transport. The corporate and asset finance business, which contributed a little over fifth of profits, focuses on corporate and real estate credit lending, and leasing aircraft, cars, technology, healthcare, manufacturing, industrial, energy, rail and mining equipment.
Today the bank said it expects to match last year’s record profit when it closes the current financial year in March. Macquarie posted a 29% rise in full year net profit to $2.063 billion last year, a record result and a return to pre-global financial crisis performances.