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Macquarie suffers blow from ‘weak trading conditions’

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By Jessica Penny
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3 minute read

Following a successful FY23 result, Macquarie’s operating groups have underperformed in net profit contributions this past quarter.

Macquarie Group has released a trading update for the first quarter of the 2024 financial year (1Q24), revealing net profit contributions that were “substantially down” on the previous corresponding period.

Ahead of its 2023 annual general meeting (AGM) held in Sydney on Thursday, Macquarie Group managing director and chief executive Shemara Wikramanayake said weaker trading conditions saw Macquarie’s operating groups deliver 1Q24 net profit after tax (NPAT) contribution that couldn’t hold up against 1Q23 figures.

Across its annuity-style businesses, Macquarie Asset Management (MAM) and Banking and Financial Services (BFS), combined NPAT contributions were “substantially down” from 1Q23.

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According to the group, this was due to lower investment-related income from green energy investments in MAM.

MAM also posted assets under management of $864.2 billion at 30 June 2023, with Macquarie noting this was “broadly in line” with figures from 31 March.

In more positive news for Macquarie’s annuity-style businesses, the BFS arms NPAT contribution was reported to be “significantly up” from the previous corresponding period.

Conversely, contributions from Macquarie’s market-facing businesses, comprising Commodities and Global Markets (CGM) and Macquarie Capital, were also deemed to be “significantly down” from Q123.

Macquarie said this was driven by strong results across its commodities platform in CGM in FY23, in addition to reduced trading activity across gas and power this past year.

Macquarie Capital also claimed to have seen lower investment-related income this past quarter, with fewer material asset realisations.

The quarterly update comes after Macquarie turned in a successful financial year ending 31 March 2023, posting a record net profit after tax of $5.2 billion, an increase of 10 per cent on the previous financial year.

In contrast to its 1Q24 performance, Ms Wikramanayake said, at the time, that all four of Macquarie’s operating groups had delivered “solid” net profit contributions in FY23.

Macquarie announces leadership shake-up

Following the AGM update, Macquarie chair Glenn Stevens announced the appointment of Susan Lloyd-Hurwitz as a group director from 1 June.

Notably, Ms Lloyd-Hurwitz was chief executive of Mirvac for more than a decade until earlier this year and brings over 30 years of global investment and real estate experience.

Subject to election by Macquarie Bank Limited (MBL) shareholders at the AGM on Thursday morning, it is proposed that she will also be appointed to the MBL board, effective 28 July.

Macquarie also confirmed the upcoming appointment of David Whiteing as non-executive director of MBL, effective from 27 September and subject to the completion of necessary approvals.

Mr Whiteing will be one of three bank-only non-executive directors, alongside Ian Saines and Michael Coleman.

He brings over three decades of experience in leading business and technology strategies across a number of sectors, including a four-year stint as global chief operating officer for Standard Chartered in Singapore, various senior consulting roles in London, and five years as a group executive at Commonwealth Bank of Australia.

Mr Stevens added that director Nicola Wakefield Evans, its longest serving director, is seeking renomination on Thursday so as to extend her term into 2024.

Macquarie suffers blow from ‘weak trading conditions’

Following a successful FY23 result, Macquarie’s operating groups have underperformed in net profit contributions this past quarter.

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