In its half-year results released on Friday, Macquarie Group reported a net profit after tax of $2.305 billion for the six months ended 30 September (1H23).
This represented an increase of 13 per cent on the half year ended 30 September (1H22) but was 13 per cent lower than in the half year ended 31 March 2022 (2H22).
Macquarie’s assets under management (AUM) sat at $795.6 billion at the end of 1H23, a 3 per cent increase on 2H22 and 8 per cent higher than 1H22.
The firm said that this lift was primarily due to investments made by Macquarie Asset Management (MAM) private markets-managed funds and foreign exchange movements, while being partially offset by market movements in MAM public investments.
“Macquarie’s businesses continued to perform well against a backdrop of more challenging market conditions, reflecting the diversity of our activities and ongoing focus on prudent risk management,” said Macquarie Group MD and CEO Shemara Wikramanayake.
Annuity-style activities undertaken by MAM, the banking and financial services division, and certain businesses in the commodities and global markets division delivered a net profit contribution of $2.281 billion, which was in line with 1H22 but down 15 per cent on 2H22.
MAM delivered a net profit contribution of AU$1.402 billion, 28 per cent higher than in 1H22, driven by investment-related income. Meanwhile, the net profit contribution of the banking and financial services division lifted 20 per cent to $482 million, reflecting growth in the loan portfolio and total deposits, improved margins and lower credit impairment charges.
Markets-facing activities undertaken by Macquarie Capital and most businesses in the commodities and global markets division delivered a combined net profit contribution of AU$2,292 million, 35 per cent higher than in 1H22 while being 18 per cent lower than in 2H22.
Macquarie reported a net operating income of $8.641 billion for 1H23, up 11 per cent compared to 1H22 and down 9 per cent compared to 2H22. Operating expenses increased 11 per cent on 1H22 and decreased 2 per cent on 2H22 to $5.613 billion.
The firm noted that it is continuing to maintain a cautious stance and a conservative approach to capital, funding and liquidity amid the current challenging environment.
“Macquarie remains well-positioned to deliver superior performance in the medium term,” said Ms Wikramanayake.
“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; ongoing technology spend across the group; 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.