Macquarie Group posted almost $1.7 billion in first-half profits as it raked in higher fees from funds management and investment banking, while its domestic banking unit continued its rapid expansion into the big four’s retail banking heartland.

The investment giant on Friday said the result for the six months to September was a 3 per cent increase on the same half last year, though 21 per cent lower than the March half. The result is lower than the consensus estimates of more than $1.8 billion cited by UBS before the result.

It comes after Macquarie shares have underperformed the ASX this year after underwhelming earnings earlier in the year and regulatory woes.

Macquarie’s bottom line benefited from higher fee income from funds management, increased revenue from mergers and acquisitio

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