In a trading update released on Thursday, Macquarie Group flagged an increase to its net profits for the first quarter ending 30 June.
The update revealed that the firm’s operating groups had delivered a higher profit contribution versus the first quarter of the previous financial year, thanks to favourable trading conditions.
However, Macquarie acknowledged that trading conditions had softened during the quarter.
“We continue to maintain a cautious stance, with a conservative approach to capital, funding and liquidity that positions us well to respond to the current environment,” it said.
While not providing specific figures, Macquarie said that the combined net profit contribution of Macquarie Asset Management and its banking and financial services division in the first quarter of its 2023 financial year was “significantly up on Q122”.
This was primarily attributed to the income from asset realisations within the green investment group of Macquarie Asset Management and partially offset by the Macquarie Infrastructure Corporation disposition fee in the first quarter of the 2022 financial year.
Meanwhile, the combined net profit contribution of Macquarie’s market facing businesses, namely its commodity and global markets division as well as Macquarie Capital, was reported to be slightly higher than in Q122 primarily due to strong results across the commodities platform.
Macquarie Asset Management had $773.9 billion in assets under management as of the end of June, slightly down from $774.8 billion in the previous quarter..
Deposits in Macquarie’s banking and financial services division totalled $106.4 billion at the end of June, up 9 per cent on the previous quarter.
Funds on platform, including Macquarie Wrap and Vision, fell by 8 per cent, as strong net flows were offset by market movements.
Additionally, Macquarie said that its financial position “comfortably exceeds” APRA’s Basel III regulatory requirements with a group capital surplus of $10.1 billion at the end of June, down from $10.7 billion at the end of March.
“Macquarie remains well-positioned to deliver superior performance in the medium term,” the firm suggested.
“This is due to our deep expertise in major markets; strength in business and geographic diversity and ability to adapt the portfolio mix to changing market conditions; an ongoing program to identify cost-saving initiatives and efficiency; a strong and conservative balance sheet; and a proven risk management framework and culture.”
Jon Bragg is a journalist for Momentum Media's Investor Daily, nestegg and ifa. He enjoys writing about a wide variety of financial topics and issues and exploring the many implications they have on all aspects of life.