Macquarie Group has posted a record net profit after tax of $5.2 billion for the financial year ended 31 March 2023, an increase of 10 per cent on the previous financial year.
In the group’s full-year results released on Friday, Macquarie chief executive officer Shemara Wikramanayake said that all four of its operating groups had delivered “solid” net profit contributions in FY23.
“Against a less certain market economic backdrop, the diversity of Macquarie’s activities and the expertise of our teams ensured we maintained strong performance during the year,” she said.
The net profit contribution from Macquarie’s annuity-style businesses, including Macquarie Asset Management (MAM), Banking and Financial Services (BFS) and some parts of Commodities and Global Markets (CGM), fell by 17 per cent to $4.1 billion.
In contrast, the contribution from its market-facing businesses, including Macquarie Capital and most parts of CGM, soared by 38 per cent to $6.2 billion.
Macquarie said that this was primarily driven by the “strong” performance of CGM, which recorded a 54 per cent higher net profit contribution of $6.0 billion.
“The result reflected an increased contribution across commodities, primarily from inventory management and trading and risk management activities,” the group said.
Meanwhile, Macquarie Capital’s contribution fell by 47 per cent to $1.5 billion, with mergers and acquisitions fee income and capital markets fee income both reported to be down.
“Additionally, Macquarie Capital saw slightly lower investment-related income driven by negative asset revaluations and fewer material asset realisations, partially offset by an increase in net interest income from the private credit portfolio,” Macquarie said.
While the net profit contribution from MAM fell by 23 per cent to $2.3 billion, Macquarie reported that its assets under management increased by 10 per cent to $870.8 billion.
Additionally, BFS delivered a net profit contribution of $1.2 million, up by 20 per cent, benefiting from growth in its loan portfolio and deposits alongside improved margins.
Macquarie noted that its current financial position “comfortably exceeds” regulatory minimum requirements, with a group capital surplus of $12.6 billion, up from $10.7 billion a year earlier, and a Bank CET1 Level 2 ratio of 13.7 per cent, up from 11.5 per cent.
The group also asserted that it would continue to maintain a cautious stance moving forward, with a conservative approach to capital, funding and liquidity.
“Macquarie remains well-positioned to deliver superior performance in the medium term due to its diverse business mix across annuity-style and markets-facing businesses; deep expertise across diverse sectors in major markets with structural growth tailwinds; patient adjacent growth across new products and new markets; ongoing technology and regulatory spend to support the group; a strong and conservative balance sheet; and a proven risk management framework and culture,” said Ms Wikramanayake.
Macquarie’s board declared a final ordinary dividend of $4.50 per cent (40 per cent franked).
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.