Australia's Macquarie Bank, once nicknamed the millionaire's factory for the number of executives it made rich, said Friday its profits halved last year, and slashed 2.5 billion Australian dollars ($1.8 billion) from its asset values because of the global financial crisis.
It was the first time in 17 years the bank's profits shrank.
Net profit for the 12 months to March 31 was AU$871 million ($635 million), a 52 percent fall from the AU$1.8 billion earned a year earlier, Australia's largest investment bank said. It had earlier estimated profit would be around AU$900 million ($656 million).
Deterioration in financial markets and long term investments because of the worldwide financial turmoil forced the big assets writedown, the bank said.
On the upside, the bank said it had cash and liquid assets of AU$30 billion ($22 billion), an increase of almost AU$9 billion from the year-earlier period, and was well positioned to ride out the financial crisis.
"Macquarie has remained profitable despite a year of challenging global market conditions," CEO Nicholas Moore said in a statement to the Australian Securities Exchange. "This result ... shows the group's resilience and adaptability."
Moore himself faces a plunge in earnings from bonuses and shares that were tied to profits. Moore earned more than AU$20 million in 2008, but this is to be slashed to less than AU$3 million (2.2 million) in 2009, bank documents showed.
Trading in Macquarie shares was halted Thursday at the bank's request after it said it was thinking about a capital raising project. No details were included in Friday's statement.
Macquarie shares have fallen by two-thirds since peaking in May 2007. They were last traded at AU$37.05.
Profits among Australia's big banks for last year have been slashed because of the financial crisis. But they have fared better than their counterparts in the United States and Europe because of stronger regulation and less exposure to bad loans such as subprime mortgages.
Macquarie's profits slumped 64 percent in the second half of the year to March 31, and market conditions would remain tough in the short term.
"While there were some early signs of markets stabilizing in March and April, significant uncertainties remain and it is still too early to make any judgments on sustained market improvements," he said.
The writedowns came from the sale of Macquarie's Italian mortgages business, impairments on funds management assets and other loan problems.
