Key Highlights:
- 1H25 net profit: $A1,612 million, up 14% from 1H24, down 23% from 2H24.
- International income: 65% of total income in 1H25.
- Assets under management: $A916.8 billion, up 3% from 30 September 2023.
- Capital position: Group capital surplus of $A9.8 billion, comfortably exceeding regulatory requirements.
- Dividend: Interim dividend of $A2.60 per share, representing a 61% payout ratio.
SYDNEY, 1 November 2024 – Macquarie Group (ASX: MQG; ADR: MQBKY) has announced a solid result for the first half of FY25, with a net profit after tax attributable to ordinary shareholders of $A1,612 million. This represents a 14% increase from the same period last year (1H24) but a 23% decrease compared to the prior half (2H24). Despite the drop compared to the last six months, Macquarie’s diversified business mix continues to deliver strong results in a challenging global environment.
Shemara Wikramanayake, Managing Director and CEO of Macquarie Group, said: “Macquarie’s improved performance this half-year was driven by strong realisations in Macquarie Asset Management and continued progress in our digitalisation initiatives in Banking and Financial Services. These results demonstrate the ongoing strength of our diverse business model.”
Performance Breakdown
Macquarie Asset Management (MAM) continued to be a standout performer, posting a 68% increase in net profit contribution, reaching $A684 million, fueled by strong performance fees. Meanwhile, Banking and Financial Services (BFS) grew its contribution by 2% to $650 million, benefiting from an expanding loan portfolio, lower expenses, and a solid deposit base.
On the flip side, Commodities and Global Markets (CGM) posted a 5% decline in net profit, contributing $A1,316 million. The decline was largely attributed to subdued volatility, particularly in risk management. However, there was a bright spot in Resources, with the metals sector seeing an uptick in trading income.
In Macquarie Capital, net profit fell by 14%, coming in at $371 million. The decline stemmed from lower investment-related income and higher funding costs. But despite these challenges, the business grew net interest income in its private credit portfolio.
Capital and Funding Strength
Macquarie’s capital position remains robust, with a capital surplus of $A9.8 billion, exceeding regulatory minimums. The Group’s CET1 capital ratio stood at 12.8% (or 17.6% on a harmonised basis), while its Leverage Ratio was 5.0%. Liquidity levels were strong, with the Liquidity Coverage Ratio (LCR) at 194% and Net Stable Funding Ratio (NSFR) at 110%.
With a solid capital base, Macquarie continued its share buyback program, purchasing $A1,013 million worth of shares as of 31 October 2024. The Group has extended its buyback for another 12 months, with a total cap of $A2 billion.
Dividend
Macquarie’s Board declared an interim dividend of $A2.60 per share, up from $A2.55 per share in 1H24. While down from the $A3.85 per share final dividend in 2H24, this still represents a 61% payout ratio, in line with the Group’s policy of distributing 50-70% of annual profit.
The dividend will be 35% franked and is payable on 17 December 2024, with the record date set for 12 November 2024.
Outlook
Looking ahead, Macquarie remains cautiously optimistic. The Group’s diverse business mix, conservative capital management, and strong liquidity position it well to navigate current market uncertainties.
Ms Wikramanayake commented, “While we maintain a cautious stance, we are confident that Macquarie is well-positioned to continue delivering superior performance over the medium term. Our diversified approach across annuity-style and markets-facing businesses, combined with ongoing investment in our platform, provides a strong foundation for long-term growth.”
Factors that may influence Macquarie’s short-term outlook include:
- Global economic conditions, inflation, and interest rates.
- Significant volatility events and geopolitical impacts.
- The completion of ongoing transactions and reviews.
- Potential tax or regulatory changes.
