Investment bank Macquarie Group Ltd (ASX: MQG) released its quarterly operating update to the market this morning confirming that all was well and it is on track to deliver a Financial Year 2016 (FY16) profit result that was up on last year’s results.

Performance in several segments cooled a little, with the annuity-style businesses Macquarie Asset Management, Corporate and Asset Finance, and Banking and Financial Services reporting a result that was down on the September 2015 quarter, but up on the December 2014 quarter.

Capital Markets businesses Macquarie Securities, Macquarie Capital, and Commodities and Financial Markets experienced lower profit in the current quarter compared to September 2015 as a result of fees from the Freeport LNG transaction received in December. However, this segment’s results were still up on the December 2014 quarter.

Macquarie remains well capitalised with a Common Equity Tier 1 (CET1) loss-absorbing capital ratio of 9.9%, above the regulatory minimum of 8%. Potentially the bank would have to increase its capital somewhat if APRA increases the regulatory minimum to 10% as is widely expected to happen. Management has also flagged additional capital raisings in the future as and when Macquarie makes further acquisitions.

At this stage – subject to currency movements, market conditions and a variety of other factors – Macquarie expects to report a full-year 2016 profit that is up on 2015’s result. Additionally, Macquarie’s second half results should come in below the first half of 2016 ($1.07bn), but above the prior corresponding period in 2015 ($0.926bn). As a result, Macquarie investors could expect profits to be around $2bn for the full year 2016, if not more.

This represents a roughly 25% increase compared to 2015’s $1.6bn Net Profit After Tax (NPAT).

Shares in Macquarie have dropped heavily in the past month as a result of investor pessimism over a variety of factors. Falling markets reduce Macquarie’s funds under management and thus performance fees, while local fears about a falling property market, weakening commodity prices, rising bad debts and so on are also having an impact.

However, further slides in its share price are likely going to get the bargain hunters interested.

But wait...there's more!

Our resident dividend expert has just named his Top Dividend Stock for 2016. Not only are the shares dirt cheap, the company is trading on a 5.6% fully franked dividend yield. Simply click on the link and enter your email address to gain access to this comprehensive FREE investment report - no credit card details or payment required!

Yep, it's free, and includes the stock's name and code. Just click here now for your copy.

HOT OFF THE PRESSES: Motley Fool’s #1 Dividend Pick for 2017!

With its shares up 155% in just the last five years, this ‘under the radar’ consumer favourite is both a hot growth stock AND our expert’s #1 dividend pick for 2017. Now we’re pulling back the curtain for you... And all you have to do to discover the name, code and a full analysis is enter your email below!

Simply enter your email now to receive your copy of our brand-new FREE report, “The Motley Fool’s Top Dividend Stock for 2017.”

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our https://www.fool.com.au/financial-services-guide">Financial Services Guide (FSG) for more information.

Motley Fool contributor Sean O'Neill has no position in any stocks mentioned. Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.