SYDNEY, May 16 (Reuters) Macquarie Bank Ltd., Australia's largest investment bank, met forecasts with a 13 percent rise in annual profit on stronger deal-making fees and set a share sale to help fund its booming expansion abroad.
Second-half profit fell about 7 percent on the back of more staff hirings and a flagged dive in performance fees from its listed investment funds that trailed key stock indices, but Macquarie said it has had a ''very good start'' to fiscal 2007.
The bank, which made almost half its operating income from its international operations, put its shares on a trading halt and said it was considering a capital raising.
Chief Executive Allan Moss, whose total remuneration rose about 14 percent to A$21.2 million ($16 million), declined to say how much the bank might raise.
But two sources familiar with the deal told Reuters Macquarie planned to raise as much as A$756 million ($573 million) by issuing shares in a range of A$65-70 each to fund its global expansion.
Macquarie's shares last traded at A$69.65.
''There is one qualification: The new shares won't get the A$1.25 a share final dividend,'' a third source told Reuters.
That 125 cents dividend beat analysts' average forecast of 117 cents a share and took the firm's full-year dividend up 34 percent to 215 cents a share.
With total assets under management soaring 45 percent to A$140 billion ($106 billion) in fiscal 2006, Macquarie said it expected a strong pipeline in public share sales and acquisition advisory work, as well as good growth in its investment funds.
''The statements on the outlook are a little bit more upbeat than they have been in the past, so I think that they are very confident for the year ahead,'' Paul Xiradis, the chief executive of fund manager Ausbil Dexia, told Reuters.
Net profit for the 12 months ended March 31 rose to a record A$916 million from A$812 million a year earlier, making it the bank's 14th consecutive year of record profit. The result was broadly in line with the average forecast of A$910 million.
The bank warned in February to expect no large performance fees in the second half from its listed funds. The fees, which fell 96 percent to A$7.5 million in the latest six months, are paid if a fund performs better than a set benchmark stock index.
Still, base or management fees from its stable of listed funds that include airport investor Macquarie Airports and toll-road investor Macquarie Infrastructure rose 17 percent to A$134.2 million over the half since Sept. 30.
''We will continue the roll-out of investment banking services in Asia,'' said Moss, the CEO for 13 years.
''International income will continue to make an increasingly important contribution.'' ''We don't envisage any material changes in strategy,'' he said.
Macquarie was ranked number-one for merger and acquisition advice in Australia in the March quarter, working on 18 announced deals valued at $16.44 billion, according to Thomson Financial.
The bank was ranked 19th worldwide.
Macquarie, also ranked a top 10 manager of share sales in Asia ex-Japan, boosted its regional reach in 2004 by buying an Asian equity business from ING of the Netherlands.
Annual income from its operations in Asia jumped 94 percent.
Total income grew 17 percent to A$4.4 billion. International income increased 59 percent to A$2 billion as the bank boosted its foreign staff by 44 percent to 2,517. Macquarie now has a total staff of almost 8,200, up 25 percent on a year earlier.
With operations in 24 countries, Macquarie also searches for assets exposed to limited competition to bundle into investment funds, from airports, toll roads, property and utilities to television towers, phone directories and broadcasters.
Macquarie said it was on track to sell about A$1.4 billion in assets on its books into managed funds over the next four months.
''At that point we are left with about A$500 million of seed assets and these are mainly property assets where there is a long lead time to set up property trusts,'' Chief Financial Officer Greg Ward told reporters.
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