Why I'd buy Macquarie shares after today's results

Macquarie Group Ltd (ASX: MQG) shares have fallen as much as 5.5% to $243.70 on Friday.

The decline follows the release of the company's half-year results, although broader market weakness after Wall Street's overnight sell-off is also weighing on sentiment.

Has the weakness created an opportunity to buy?

What concerned me about the results?

Macquarie reported a 50% increase in first-half net profit to $2.48 billion. That's a strong headline, but the result was less convincing in a few areas.

For one, profit was 22% below the previous six-month period, showing how uneven earnings can be.

Macquarie Capital was a major source of weakness, with its profit contribution falling 61%. Lower investment-related income and mergers and acquisitions (M&A) fees weighed on the division.

There was also pressure in the banking business, where competition squeezed margins and credit provisions increased.

And separately from the results, this morning APRA announced an additional $100 million capital requirement after identifying errors in Macquarie's capital calculations for its non-bank businesses.

That raises legitimate questions about oversight, even though the regulator said the group's financial stability was not undermined.

Why I'd still buy Macquarie shares

I think Macquarie has plenty of opportunities to grow over the coming decade, and Friday's results reinforced my confidence in its long-term prospects.

One of the things I like most about the company is the expertise and relationships it has built across global financial markets.

These give Macquarie opportunities to generate profits from areas such as commodities, infrastructure, and investment management that few Australian companies can match.

We saw an example of that today, with its Commodities and Global Markets division increasing its profit contribution by 83% as higher client activity created more trading opportunities.

I wouldn't expect that level of growth every half, but I believe Macquarie's global presence and experience will continue opening doors for the business.

I'm also optimistic about its Australian banking operations. Macquarie has been steadily building its presence in this market, and its latest results showed further growth in lending and deposits.

I think there's considerable room for it to attract more customers and take market share from the major banks over the coming years.

Alongside the opportunities in its global markets business, that gives me confidence Macquarie can continue growing, even when one of its divisions has a disappointing period.

Foolish takeaway

Friday's results had some disappointments, and APRA's announcement gives management another issue to address.

However, I don't think either changes the long-term investment opportunity I see in Macquarie.

With the shares falling to around $243.70, I'd be happy to take advantage of the weakness and buy for the long term.

The post Why I'd buy Macquarie shares after today's results appeared first on The Motley Fool Australia.

Motley Fool contributor Grace Alvino has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Macquarie Group. The Motley Fool Australia has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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