Shares in Macquarie Group have tanked another 3.6% to $59.05 in morning trade, bringing the two-day loss from the final Allan Moss profit presentation to 10.4% or a whopping $1.9 billion.

Lo and behold, that’s now more than the record $1.8 billion annual profit declared yesterday morning.

Chalk that one up as another first for the Millionaire Factory along with poor old Allan Moss now holding the honour of “Australia’s biggest pay cut”, after dropping by $8.8 million to $24.75 million. There’s no need to call in the Finance Sector Union just yet as Moss got by with a tidy $107 million over his last five years, although that is a gross figure, in both senses of the word.

Federal taxpayers have clipped the ticket for about $40 million from this, so while Macquarie’s 5% corporate tax rate in the second half raised eyebrows, the Australian-based bankers themselves are still mighty contributors to the federal government.

Some of the most interesting and overlooked news came from looking at Macquarie’s second half figures in isolation on page three of this version of the results.

The credit crunch was clearly evident in the “net interest income” figure which plunged from $523 million in the six months to 30 September 2007, to just $294 million in the latest half.

And you can see the stockmarket plunge evident in “asset and equity investment income” which plunged from $810 million to just $29 million over the same two comparative half year periods.

However, the absolute stand-out performance was “net trading income” which rose from $843 million to $992 million. In other words, these bankers made $7.63 million on every working day over the last half through trading in what was an environment that slaughtered most of its rivals.

You almost feel sorry for treasury and trading boss Andrew Downe whose overall pay plummeted from $21.5 million to $14.9 million. What’s a man got to do?

Alan Kohler has explained Macquarie’s success with great elan on Business Spectator this morning, but the most misleading headline today was on the front of The Australian’s business section which declared “MacGroup estimates its US sub-prime losses at $293m”.

Since when has the falling share price of funds that invest in quality Australian and US office blocks and shopping centres been the same as losing money lending money to high credit risk Americans to buy homes they can’t afford?

The closest Macquarie has come to disaster in the “global credit crunch” has been its Macquarie Fortress fund which has dropped more than $150 million gearing up into supposedly high credit US corporate debt. But even Macquarie Fortress has tripled from its lows and is up another 8% this morning.

Listen to last night’s Macquarie discussion with Lindy Burns on 774 ABC Melbourne

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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