MACQUARIE Group's chief executive, Nicholas Moore, has added investment banking to the long list of industries suffering from deep-seated structural changes that are resulting in hefty job cuts.
Sectors such as retail, media and manufacturing are being forced to make painful adjustments to long-term changes in the economic environment, ranging from the high dollar to the rise of the internet.
After Macquarie yesterday said first-half profits rose to $361 million, Mr Moore said structural forces were also affecting its flagship businesses in investment banking and signalled the industry needed fewer staff than previously.
''There's plainly a degree of structural change taking place in the industry, also structural change in terms of the amount of capacity in the industry,'' Mr Moore said.
''There was a lot of capacity applied to the industry in recent years, so there's a structural issue there.''
In a trend that has buffeted investment banks around the world,
Macquarie has been hit hard by the decline in global equity market turnover and takeover activity, which crimps its income from fees.
During the six months to September, the number of staff at the investment bank fell by more than 700 to 13,463, with the largest cost cuts in its securities division.
Mr Moore said yesterday that part of its problems were cyclical, and market activity would ultimately recover because companies would need to access equity capital.
However, trends such as the rise of computerised trading had permanently changed some parts of the business, such as the securities division, which houses its stock-broking arm.
''Technology is having an increasing role in the securities business, and as a result of that we see more and more transactions taking place electronically with less and less input from the human operators,'' Mr Moore said.
Asked if the bank may cut more jobs in the coming months, Mr Moore said it did not forecast staff numbers but it would continue to look at being more efficient.
The comments came as Macquarie said it was on track to post its first full-year increase in profits since 2010, reaffirming guidance its profits in 2012-13 would beat last year's earnings of $730 million.
The $361 million profit in the six months to September was an 18 per cent rise on its first-half performance last year, but weaker than analyst expectations. Despite this, Macquarie shares rallied strongly, rising 3.5 per cent to $30.85 in a falling market.
Macquarie Securities made a $64 million loss during the half, with daily equity trading volumes in Australia down 23.5 per cent on the same half last year. If current conditions remain, the division is expected to remain unprofitable.
Macquarie Capital, which houses its global mergers and acquisitions team, made a profit of $10 million - a result seen as skinny by analysts.
In response to the structural pressures, Macquarie is investing heavily in annuity-style businesses that tend to provide more stable returns.
Macquarie will pay an interim unfranked dividend of 75¢ a share, up from 65¢ in the first half last year.