The Macquarie Group Ltd (ASX: MQG) share price is having a tough finish to the week.

In morning trade, the investment bank's shares are down 4.5% to $221.11

This follows the release of the company's half year results before the market open.

Macquarie share price sink on half year results

• Assets under management up 3% to $916.8 billion
• Net operating income up 4% on the prior corresponding period to $8,216 million
• First half net profit after tax up 14% year on year to $1,612 million
• Partially franked interim dividend up 2% to $2.60 per share

What happened during the half?

For the six months ended 30 September, Macquarie reported a 14% increase in net profit after tax to $1,612 million. Though, it is worth noting that this profit is down 23% on the second half of FY 2024.

Judging by the falling Macquarie share price, It's likely that the market is focusing more on its half on half performance than its year on year performance.

The company's Annuity-style businesses, Macquarie Asset Management (MAM), Banking and Financial Services (BFS), and certain businesses in Commodities and Global Markets (CGM), drove its year on year growth.

They generated a combined net profit contribution of $1,614 million, which is up 25% on the prior corresponding period but down 6% on the previous half.

Macquarie's Markets-facing businesses, Macquarie Capital and most businesses in CGM, delivered a combined net profit contribution of $1,407 million for the half. This is down 10% on the prior corresponding period and 34% from the second half of FY 2024.

Commenting on the result, Macquarie's CEO, Shemara Wikramanayake, said:

Macquarie's improved performance this half year was underpinned by improved realisations in Macquarie Asset Management and further progress in the digitalisation programme in Banking and Financial Services, reflecting the ongoing benefits of our diverse business mix.

Capital returns

The Macquarie board has declared a 35% franked interim dividend of $2.60 per share. This is up 2% on the $2.55 per share interim dividend it paid a year ago and represents a payout ratio of 61%. This puts it in the middle of its target payout ratio range of 50% to 70%.

But the returns won't stop there. Given its strong capital position, the Macquarie board has approved an on-market buyback extension of up to $2 billion. This will run for a further 12 months.

Outlook

No guidance was given. Instead, Macquarie revealed that it continues to maintain a cautious stance, with a conservative approach to capital, funding, and liquidity. It believes this positions it well to respond to the current environment.

Commenting on its outlook, Ms Wikramanayake said:

Macquarie remains well-positioned to deliver superior performance in the medium term with its diverse business mix across annuity-style and markets-facing businesses; deep expertise across diverse sectors in major markets with structural growth tailwinds; patient adjacent growth across new products and new markets; ongoing investment in our operating platform; a strong and conservative balance sheet; and a proven risk management framework and culture.