(Recasts, adds further details on results in paragraphs 2-5)...

(Recasts, adds further details on results in paragraphs 2-5)

Nov 3 (Reuters) - Australia's Macquarie Group (MQG) on Friday reported a 39% decline in first-half profit that missed expectations as surging costs and lower asset sales proceeds crimped earnings at its large asset management division.

The financial conglomerate said its board had approved a share buy-back of up to A$2 billion ($1.29 billion) and declared an interim dividend of A$2.55 per share, representing a payout ratio about 70%.

Macquarie had already trimmed its earnings forecasts twice since its record fiscal 2023 results announced in May amid a tough environment for corporate dealmaking and less volatility in commodity prices than a year ago.

The company's net profit for the half-year ended Sept. 30 was A$1.42 billion, down from A$2.31 billion a year ago and well below a consensus estimate of A$1.77 billion compiled by Citi.

The Sydney-based firm's top profit generating arm, the Commodities and Global Markets (CGM) division, posted a 31% drop in interim earnings on the back of decreased contributions from resources and Europe, Middle East and Africa gas, power and emissions. ($1 = 1.5550 Australian dollars)