Macquarie profit up 27% with returns across the operating groups
(11 May 2015 – Australia) Macquarie Group was able to capitalise on improved trading conditions, leading to a net profit after tax of A$1.604 billion for the full year ended 31 March 2015.
The result was up 27 percent on the same time last year, with profit for the second half of the year A$926 million – up 37 percent on the first half.
Macquarie Group managing director and chief executive Nicholas Moore said the result reflected the return on many years of investment across the business, enabling the Group to further capitalise on improved trading conditions.
“This resulted in a significant increase to Macquarie’s operating income and profit, with five of the six operating groups delivering increased net profit contributions.
He said the six months to 31 March 2015 saw Macquarie’s annuity-style businesses, including Macquarie Asset Management (MAM), Corporate and Asset Finance (CAF) and Banking and Financial Services (BFS), continue to perform well with combined net profit contribution up 4 percent on 1H15 and up 29 percent on 2H14.
“Macquarie’s capital markets facing businesses, Macquarie Securities Group (MSG), Macquarie Capital and Commodities and Financial Markets (CFM), also delivered an improved result with combined net profit contribution1 up significantly on 1H15, and up 24 percent on 2H14.”
Macquarie’s annuity-style businesses’ FY15 combined net profit contribution increased by A$710 million, or 33 percent, on FY14.
Macquarie’s capital markets facing businesses’ FY15 combined net profit contribution increased by A$216 million, or 19 percent, on FY14.
“While Macquarie continued to build on the strength of its Australian franchise, its international income accounted for 70 percent of the Group’s total income5 for FY15,” Moore said.
This reflects the growth of our international operations, particularly in the Americas which was the largest contributing region with 36 percent of total income, as well as the favourable impact of foreign exchange movements,” Moore said.
The effective tax rate for FY15 was 35.9 percent, down from 39.5 percent in FY14.
Macquarie’s assets under management (AUM) at 31 March 2015 were A$486.3 billion, up 14 percent from A$426.9 billion at 31 March 2014 largely due to additional investments and favourable foreign exchange and market movements.
“The Group remains well positioned, with a strong and diverse global platform and proven deep expertise across a range of products and asset classes,” Moore said.
“This is built on the foundation of a strong balance sheet, surplus capital, a robust liquidity and funding position and a conservative approach to risk management which is embedded across all operating groups.”
Macquarie also announced on 8 May a final ordinary dividend of A$2.00 per share (40 percent franked), up from the 1H15 ordinary dividend of A$1.30 per share (40 percent franked).
In its statement, Macquarie said that the impact of future market conditions makes forecasting difficult, but it is currently expected that the combined net profit contribution from operating groups for the year ended 31 March 2016 will be broadly in line with FY15.
The Group’s short term outlook remains subject to a range of challenges including: market conditions; the impact of foreign exchange; the cost of our continued conservative approach to funding and capital; and potential regulatory changes and tax uncertainties.
“Macquarie remains well positioned to deliver superior performance in the medium term due to its deep expertise in major markets, strength in diversity and ability to adapt our portfolio mix to changing market conditions, the ongoing benefits of continued cost initiatives, a strong and conservative balance sheet, and a proven risk management framework and culture,” Moore said.
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