* Net profit at A$1.07 bln, in line with guidance
* Net operating income A$5.3 bln, up 24 pct
* Expects H2 profit to be better than A$926 mln
* On track for record annual profit for year to March 2016
* To issue new shares at A$78.4, 6.7 pct discount to last close (Rewrites with fresh CEO comments throughout, updates shares)
By Swati Pandey
SYDNEY, Oct 30 (Reuters) - Macquarie Group MQG.AX posted record half-yearly results on Friday as Australia's top investment bank continues to rely on steadier businesses that earn regular fees while scaling back risky, capital-intensive operations.
The bank posted a surge in fees and trading income for the six months to September, helped by increased volumes in volatile markets particularly in China. A weaker Australian dollar also bolstered profits.
The strong performance contrasted with other global investment banks including JPMorgan Chase & Co (N:JPM) JPM.N and Bank of America (N:BAC) Inc BAC.N , which reported poor quarterly results this month.
It also puts the Sydney-based bank, which generates over 70 percent of its income overseas, on track to report its highest profit to date for the year ending March 2016.
"One of our strengths lies in our ability to change," Chief Executive Nicholas Moore told Reuters in an interview on Friday.
"The initiatives of doing new activities come from our people who are close to the market place ... They are not directed by a central executive telling people top down what to do."
Growth in niche operations such as leasing and energy trading have helped lift the group's income since the global financial crisis in 2008. It now earns about 30 percent of profits from businesses that did not even exist in 2008.
Stable annuity-style businesses such as asset management and retail banking have now replaced investment banking in contributing the lion's share of earnings, accounting for about 70 percent of group profit.
Investors cheered Macquarie's strong performance, sending its shares to a three-month high in a weak broader market. They ended 2 percent higher at A$85.70.
The bank announced it would issue new shares on Nov. 2 at either A$78.40 each, or at a 1 percent discount to the volume-weighted average price during the pricing period, to help fund the acquisition of a $5.6 billion vehicle finance portfolio it bought from ANZ Banking Group ANZ.AX this month.
It did not say how many shares would be issued or how much it expected to raise.
Since Moore took charge in May 2008, the bank's shares have jumped about 40 percent, versus a 6 percent drop in the benchmark 200-share Australian index .AXJO .
CHINA TURMOIL
Macquarie's commission-earning securities division turned in a first-half net profit of A$240 million ($171 mln), more than 14 times what it made in the year-ago period, as a rout in China's stock markets triggered volatility in global markets.
The division is part of Macquarie's market-facing business that contributes under 30 percent of total profit.
Overall, the group's net profit for the first six months rose about 16 percent year-on-year to A$1.07 billion.
"In the immediate short term we are not going to see the step up in earnings that we've just seen but in the medium term because of good long-term reasons we expect to continue to grow," Moore said. ($1 = 1.4134 Australian dollars) (Editing by Miral Fahmy and Susan Fenton)