Macquarie Group's annuity-style businesses are expected to return 20% higher net profit contribution for FY12 on last year's results, yet not all results were positive as the firm released its moderate outlook and plans for a share buyback.

In an update on market conditions, business activity and the outlook for the second half of the financial year ending March 31, Macquarie Group Limited said global economic uncertainty had impacted client activity in many markets, with its own divisions taking a hit.

Nicholas Moore, Macquarie chief executive officer said the global economic uncertainty had deepened with Macquarie Securities Group and Macquarie Capital both severely impacted by macroeconomic conditions for the December quarter net profit contributions.

"For example, cash equities industry-wide by value traded, were down 24% in Asia and 25% in Australia in the December quarter compared to the September quarter, while IPOs by value were down 61% in Australia and 4% in Asia for the same period. IPOs by value were down 48% in Asia and 87% in Australia for calendar year 2011 compared with 2010," said Moore.

However, Macquarie's three annuity-style businesses - Macquarie Funds, Banking and
Financial Services and Corporate and Asset Finance - did perform to expectations with the combined FY12 net profit contribution expected to be up by approximately 20% on FY11.

"The Fixed Income, Currencies and Commodities Group saw improved conditions in a number of markets to deliver a December quarter net profit contribution up on prior corresponding period and significantly up on the prior period," said Moore.

In an overview of recent developments, Moore said Macquarie was focused on maintaining strong market positions which included Macquarie Funds continuing to build out its unlisted infrastructure funds platform. Macquarie Funds assets under management fell $324 billion to $314 billion due to $16 billion of negative foreign exchange translation.

Macquarie also said a capital surplus is expected to allow commencement of a share buyback of up to 10% of Macquarie Group ordinary shares in the first half of FY13, subject to regulatory approval.

Based on current market conditions, FY12 is anticipated to be approximately 25% lower than FY11.