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Macquarie set for record annual profits

Australia's largest investment bank, Macquarie Bank, is set to announce record yearly profits of $692 million, thanks in part to an impressive performance in Asia, analysts have said.

The bank will benefit from large one-off deals over the last 12 months, such as the profit from its Korea infrastructure fund launched late in 2005.

Macquarie has also seen success in its rapid acquisition of satellite funds and infrastructure assets worldwide including airports, roads and explosives.

However, the rise in annual profit is likely to disguise a drop in net income in the six months ending in March, with a 21 per cent fall to $342 million expected by analysts surveyed by Bloomberg news.

The fall is being blamed on the poor performance of funds under the bank's management, including Macquarie Infrastructure Group and Macquarie Airports, both of which failed to beat their stock market benchmarks, forfeiting lucrative management fees for the bank.

The bank's poor performance in this area has caused many industry observers to question whether the bank will be able to continue its fast-paced acquisitions.