November 18, 2008 / 4:08 AM / 10 years ago

WRAPUP 2-Macquarie, MUFG profits dive, other banks cut jobs

* Macquarie H1 profit falls 43 pct, writedowns total $750 mln

* Macquarie shares soar 26 pct, no plans to raise cash now

* MUFG Q2 falls 61 pct, sticks to lowered forecast

* China Construction Bank shares fall after BoA stake buy

* Citi slashes 52,000 global jobs, HSBC trims 500 from Asia (Recasts with MUFG results, analyst comments)

By Mette Fraende and David Dolan

SYDNEY/TOKYO, Nov 18 (Reuters) - Japan’s Mitsubishi UFJ (8306.T) and Australia’s Macquarie Group (MQG.AX) became the latest Asian lenders to post sharp falls in profits, but relief Macquarie was not tapping investors for more cash sent its shares soaring.

Frozen credit markets, sinking asset values and plunging equity markets have taken a toll on the region’s banks, prompting multi-billon dollar cash calls from companies including MUFG and rival Mizuho Financial Group (8411.T) in recent weeks.

Banks have also been slashing jobs, with Citigroup (C.N) on Monday announcing plans to cut 52,000 jobs globally, the second-largest corporate lay-off plan in history. [ID:nN17468336]

A source familiar with Citi’s plans said around 150 jobs would go at its wealth management unit in Asia, mainly in Singapore and Hong Kong, about 12 percent of the unit’s total. [ID:nSIN320672]

HSBC (HSBA.L) (0005.HK) added to the employment gloom on Tuesday, saying it would cut a further 500 staff in Asia, mostly in Hong Kong, due to deteriorating economic conditions and caution about next year. [ID:nHKG289259] [ID:nSP200829]

The crisis has also shaken up bank ownership around the world, with Bank of America Corp (BAC.N) on Monday increasing its stake in China Construction Bank Corp (0939.HK) at a significant discount to its current trading price. [ID:nN17499130]

For a graphic on recent job losses, click here


Amid such turmoil, Macquarie’s results provided a rare cause for optimism.

Although Australia’s largest investment bank announced a 43 percent fall in first-half profits and more than $750 million in writeoffs on its global asset portfolio, its shares surged as much as 26 percent after it doused fears it needed to raise capital. [ID:nSYD228271]

“It’s a relief. There’d been some concern about an equity raising in the profit announcement today. That didn’t eventuate and the numbers were not too far away from forecasts,” said Leigh Gardner, head of distribution at ABN AMRO.

For a graphic illustrating Macquarie's results click on: here

The stock ended up 16.5 percent but is still down by two-thirds so far this year.

Macquarie, nicknamed “the millionaire factory” for its huge bonuses, was also able to make big savings in operating expenses, mostly by cutting profit-share payments to staff.

The group said its balance sheet was strong, holding capital more than 40 percent above the minimum regulatory requirement.

“We would only look to raise capital if we found a really good use and really good need for capital ... we have got a lot of capital already going forward,” Chief Executive Nicholas Moore told an analyst briefing.


MUFG, which last month announced plans to raise as much as $10.3 billion to shore up its balance sheet, reported a 61 percent fall in second-quarter profits. [ID:nT305164]

Struggling to cope with rising bankruptcies, Japan’s first recession in seven years and a stock market down almost 50 percent in a year, MUFG stuck to its recently lowered full year forecast for an annual profit of 220 billion yen ($2.3 billion), little more than a third of its original estimate.

Shares in MUFG ended down 6.7 percent before the results announcement in a Nikkei index .N225 down 2.3 percent.

In Hong Kong, China Construction Bank shares fell 9 percent after Bank of America announced it would increase its stake in the country’s third-largest lender to 19.1 percent from 10.75 percent at a sizeable discount.

Analysts remained concerned Bank of America might still cut its CCB holding in the coming quarters to bolster its own capital after a three-year lock-up period on its existing holding expired last month.

“People interpret it as BoA positioning to cash out of its original stake. Rather than as a stimulus to buy, it has become an opportunity to sell to some investors,” said Paul Lee, analyst at Tai Fook Securities.

Other firms were seeking to boost their finances.

South Korea’s No.4 banking group, Hana Financial Group (086790.KS), will raise around $710 million in bonds, the Maeil Business Newspaper reported on Tuesday, citing an unnamed Hana official. [ID:nSEO281876]

ING’s South Korea insurance unit also plans to raise almost $250 million in fresh capital. [ID:nSEO290823] ($1=A$1.525 or 96.84 Yen) (Additional reporting by Parvathy Ullatil in HONG KONG and Kim Yeon-hee in SEOUL; Writing by Lincoln Feast; Editing by Alex Richardson)

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