August 7, 2008 / 12:03 PM / 10 years ago

Investment banking decline cuts GMP Capital profit

TORONTO, Aug 7 (Reuters) - Profit fell 59 percent at independent investment dealer GMP Capital Trust GMP_u.TO as rocky financial markets hurt investment banking and commission revenue, the company said on Thursday.

GMP cut its monthly cash distribution to 10.42 Canadian cents a unit, from 14 Canadian cents, citing “continued challenging market conditions.”

GMP earned C$15.7 million ($15 million), or 24 Canadian cents a diluted unit, in the three months ended June 30. That compared with profit of C$38.6 million, or 60 Canadian cents, in the same 2007 period.

Analysts had expected profit of 30 Canadian cents a unit before items, and 27 Canadian cents on a GAAP basis, according to Reuters Estimates.

Quarterly revenue tumbled 30 percent to C$69.8 million, led by a drop in investment banking revenue from record equity underwriting revenue a year ago, the company said. It has capital markets banking, wealth management and alternative investment businesses.

GMP reported return on equity of 22.4 percent, down from 51.9 percent a year earlier.

Its stock is down 48 percent year-to-date, closing on Wednesday at C$12.80 a share. ($1=$1.05 Canadian) (Reporting by Lynne Olver; editing by Janet Guttsman)

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