Macquarie, dubbed the "millionaires' factory" for its senior bankers' hefty pay packages, said its first half net profit would fall by a quarter and its fiscal year 2011 profit would be in line with last year's.

 

The forecasts follow two earlier warnings on market conditions and come as analysts and investors call on the bank to cut jobs or pay to protect earnings.

 

Macquarie is not alone in suffering. Global rivals such as Goldman Sachs , Morgan Stanley , investment bank units of JPMorgan and Credit Suisse have all shared grim outlooks.

 

"The level of deal activity suggests there will be an earnings shortfall in the near-term," said Christopher Hall, chief investment officer at Argo Investments , which owns Macquarie shares.

 

"But on a two to three year time frame, their focus on unlisted funds, deployment of surplus capital and a general lift in market sentiment should pay off."

 

Globally advisory fees have fallen as deal flows slowed trading volumes have thinned amid increased market volatility and fears of a double-dip recession.

 

Equity capital market volumes have slid 10 percent and debt raising have slipped nearly a fifth so far this year, failing to offset a 23 percent rise in mergers and acquisitions volumes, according to Thomson Reuters data.

 

Macquarie's trading and advisory businesses make up nearly three-quarters of its revenue.

 

At 0422 GMT, Macquarie shares had trimmed losses, down 5.2 percent at A$35.07 in a positive broader market <.AXJO>. The shares had fallen as much as 8.1 percent to its lowest since June 2009.

 

The stock, down 28 percent so far this year, has recorded just three annual falls in the past 14 years.

 

Source - http://abcnews.go.com