MQG - Macquarie Group

[dyna]

This beast of a thing goes ex dividend a week ago for $ 3 and what does the S.P do ?
Goes up, up and up by nine bucks all in one day !
And it ain't comin back down.
$ 178 ...jeebus. Can't win, at this racket.
( Note to self : just let it go and look for something else. )

 

[Dona Ferentes]

Ms Macq went to COP27...

 

[divs4ever]

This beast of a thing goes ex dividend a week ago for $ 3 and what does the S.P do ?
Goes up, up and up by nine bucks all in one day !
And it ain't comin back down.
$ 178 ...jeebus. Can't win, at this racket.
( Note to self : just let it go and look for something else. )

was kind of hoping it would slide also

i participate in the DRP ( lower SP means more shares in the div. payment )

if there was a market crash coming , or terrible ( generic ) news for the banking sector , that is a better time to start stalking it

good luck

 

[divs4ever]

Ms Macq went to COP27...

well it did buy a green bank in the UK ( now sure the critics called it 'green-washing ' )

will be interesting to see if they hedge their bets ( and lend for more fossil fuel development/exploration as well )

 

[Belli]

This beast of a thing goes ex dividend a week ago for $ 3 and what does the S.P do ?
Goes up, up and up by nine bucks all in one day !
And it ain't comin back down.
$ 178 ...jeebus. Can't win, at this racket.
( Note to self : just let it go and look for something else. )

Damn. That means it will not be captured by WHF

which should report this week.

On the bright side, however, it probably will in VAS and some LIC's I hold.

There is always a bright side somewhere I reckon.

 

[divs4ever]

Damn. That means it will not be captured by WHF

View attachment 149275


which should report this week.

On the bright side, however, it probably will in VAS and some LIC's I hold.


View attachment 149276

There is always a bright side somewhere I reckon.

likely to be captured later with WHF , which MIGHT be a good thing ( a fatter div. when the market is generally lower , and smaller divs elsewhere )

 

[Belli]

I did a detailed search and found the bleeding obvious. The other garbage I threw in the trash.

 

[dyna]

S.P. down today to $ 166.
Bought 10 grand worth at $ 168 , and still not done with the beast.
Maybe another go after Xmas at $ 160.

 

[eskys]

I was looking at MQG's cap notes. MQGPE paid distributions yesterday. Went as high as 103.90 today and dropped back towards close. I'd like to get rid of all cos it's only 40% franking.

The other four majors are 100% franking

 

[divs4ever]

I was looking at MQG's cap notes. MQGPE paid distributions yesterday. Went as high as 103.90 today and dropped back towards close. I'd like to get rid of all cos it's only 40% franking.

The other four majors are 100% franking

but the 'other 4 ' struggle to find meaningful , sustainable growth , MQG is liable to go out and buy London Bridge , turning it into a toll-way and then park the asset into a managed investment pocketing fees from all sorts of angles MQG's divs at 40% franking spank those of WBC at 100% franking ( because i bought both close to $20 in 2011 ) luckily i bought many more MQG than WBC

think of it the other way MQG makes more in profits than it pays local taxes on ( and danced it's way through the Hayne Royal Commission )

look for the MQG share price to get spanked again the the next big downturn because it is deemed HIGH RISK because it has only 1% of the Australian home mortgage market

what about investing the MQG divs in say ANZ or WBC shares ( they are around $24 currently and get the 100% franking on those dives )

i hold MQG 'free-carried' and a small amount of WBC ( courtesy of a mistimed exit )

and for those that love 'green-washing ' the big 4 virtue signal , MQG bought the Green Development Bank in the UK

cheers

 

[Dona Ferentes]

I was looking at MQG's cap notes. MQGPE paid distributions yesterday. Went as high as 103.90 today and dropped back towards close. I'd like to get rid of all cos it's only 40% franking.

The other four majors are 100% franking

Macquarie is Not a bank, it's an investment bank. It derives most of its earnings from overseas, so franking is hard to come by. The local banks are mainly big building societies.

 

[divs4ever]

Macquarie is Not a bank, it's an investment bank. It derives most of its earnings from overseas, so franking is hard to come by. The local banks are mainly big building societies.

maybe ' not a bank as most would understand it ' would be better , think of MQG is an Australian version of Goldman Sachs or JP Morgan i have a little spare cash lurking in a Macquarie high interest account ( i have in the past also held Macquarie Group preference shares and Macquarie Bank hybrids )

Macquarie does almost everything it can make a profit from , commodity hedging contracts leasing commercial planes ( to others ) infrastructure investments ( like previously in Sydney Airport ) , services to other companies ( including capital raising , M&A activity ) buying companies and inserting them into managed funds , sure MQG mostly earns revenue outside Australia because that is where 90% of the global money is

BIG fish in small ponds have their charms ( i invest a bit in NZ to capture precisely that affect ) but a hungry competitive shark in the global oceans has it's chances of further growth

BUT don't expect the Australian Government to rush in and rescue MQG if it gets into trouble ( like it would the 'big 4' ) and THAT is where the extra risk comes in

 

[eskys]

but the 'other 4 ' struggle to find meaningful , sustainable growth , MQG is liable to go out and buy London Bridge , turning it into a toll-way and then park the asset into a managed investment pocketing fees from all sorts of angles MQG's divs at 40% franking spank those of WBC at 100% franking ( because i bought both close to $20 in 2011 ) luckily i bought many more MQG than WBC

think of it the other way MQG makes more in profits than it pays local taxes on ( and danced it's way through the Hayne Royal Commission )

look for the MQG share price to get spanked again the the next big downturn because it is deemed HIGH RISK because it has only 1% of the Australian home mortgage market

what about investing the MQG divs in say ANZ or WBC shares ( they are around $24 currently and get the 100% franking on those dives )

i hold MQG 'free-carried' and a small amount of WBC ( courtesy of a mistimed exit )

and for those that love 'green-washing ' the big 4 virtue signal , MQG bought the Green Development Bank in the UK

cheers

I don't have shares in MQG, divs.........the merchant bank, millionaire factory. I only have their cap notes for income. No more PC, PD, only holding PE now. Because of franking and our restructuring (company), the lower returns get sold first. Can't remember PE's margin now, but it's not that brilliant as opposed some with 4% margins.

Don't want to put money into the market at the moment, divs..........don't know where it's heading. Retarded money in my pocket is safer than having them washed away in turbulent tides. Will come back and assess the situation in the new year.

 

[divs4ever]

I don't have shares in MQG, divs.........the merchant bank, millionaire factory. I only have their cap notes for income. No more PC, PD, only holding PE now. Because of franking and our restructuring (company), the lower returns get sold first. Can't remember PE's margin now, but it's not that brilliant as opposed some with 4% margins.

Don't want to put money into the market at the moment, divs..........don't know where it's heading. Retarded money in my pocket is safer than having them washed away in turbulent tides. Will come back and assess the situation in the new year.

if you ( or i ) knew where the market was heading next we would be future millionaires

i held MQCPA , later offerings never looked attractive to me so avoided those , i also bought MBLHB ( which on paper looked tragic except i bought them at a 38% discount to face value making them competitive to term deposit rates at the time )

interesting times ahead , you can bet on that

let your pocket calculator be your guide ( especially with interest-bearing securities )

 

[divs4ever]

MACQUARIE GROUP 3Q 2023 TRADING UPDATE
Key points
• Varied conditions for Macquarie’s diverse businesses in the three months to 31 December 2022 (3Q23) resulted in
a good quarter for the Group
• Net profit after tax (NPAT) for the nine months to 31 December 2022 (FY23 YTD) slightly up on the nine months to
31 December 2021 (FY22 YTD) – a period which included a record December 2021 quarter (3Q22) result
• Macquarie's annuity-style businesses' (Macquarie Asset Management (MAM) and Banking and Financial Services
(BFS)) combined 3Q23 net profit contribution1 substantially down on the prior corresponding period (3Q22) mainly
due to larger green energy sector asset realisations in MAM in the prior corresponding period. This was partially
offset by continued growth in BFS
- FY23 YTD net profit contribution significantly down on FY22 YTD primarily due to larger green energy
sector asset realisations in MAM in the prior corresponding period. This was partially offset by continued
growth in BFS
• Macquarie's markets-facing businesses' (Commodities and Global Markets (CGM) and Macquarie Capital) combined
3Q23 net profit contribution substantially up on prior corresponding period primarily due to the CGM result for
3Q23, which was substantially up on half year ended 30 September 2022 (1H23) driven by commodities including
gas and power contributions across all regions partially offset by a lower level of realisations and lower fee and
commission income in Macquarie Capital
- FY23 YTD net profit contribution substantially up on FY22 YTD mainly due to exceptionally strong results
in commodities including gas and power contributions across all regions in CGM partially offset by a lower
level of realisations and lower fee and commission income in Macquarie Capital
• Group financial position comfortably exceeds regulatory requirements
- Group capital surplus of $A12.5 billion2,3
- Bank CET1 ratio 13.3% (Harmonised: 16.9%4
), Leverage ratio 5.2% (Harmonised: 5.9%4
), LCR 203%5
, NSFR 117%5
1 Net profit contribution is management accounting profit before unallocated corporate costs, profit share and income tax. All numbers in this presentation have been reclassified to reflect the transfer of the Green
Investment Group from Macquarie Capital to Macquarie Asset Management effective 1 Apr 22.
2 The capital surplus shown is above regulatory minimums including the capital conservation buffer (CCB), per APRA ADI Prudential Standard 110, calculated at 8.5% RWA on a Level 2 basis for Macquarie Bank Limited
(MBL). This surplus also includes provision for internal capital buffers, forthcoming regulatory changes, as well as differences between Level 2 and Level 1 capital requirements, including the $A500m Level 1
operational capital overlay imposed by APRA from 1 Apr 21.
3 Based on materiality, the 8.5% used to calculate the Group capital surplus does not include the countercyclical buffer (CCyB) of ~9bps. The individual CCyB varies by jurisdiction and the Bank Group’s CCyB is
calculated as a weighted average based on exposures in different jurisdictions.
4 Basel III applies only to the Bank Group and not the Non-Bank Group. ‘Harmonised’ Basel III estimates are calculated in accordance with the BCBS Basel III framework, noting that MBL is not regulated by the BCBS
and so impacts shown are indicative only.
5 APRA imposed a 15% add-on to the Net Cash Outflow component of the LCR calculation, and a 1% decrease to the Available Stable Funding component of the NSFR calculation, effective from 1 Apr 21. The LCR
Net Cash Outflow add-on increased to 25% from 1 May 22.
Macquarie Group Limited
2
SYDNEY, 7 February 2023 Macquarie Group Limited (Macquarie) (ASX: MQG; ADR: MQBKY) today provided an update
on business activity in the third quarter of the financial year ending 31 March 2023 (3Q23).
Macquarie Group Managing Director and Chief Executive Officer, Shemara Wikramanayake, said: “Varied market
conditions have resulted in a good quarter for the Group reflecting the diversity of our activities.”
The annuity-style businesses’ combined 3Q23 net profit contribution was substantially down on 3Q22. For FY23 YTD,
net profit contribution significantly down on FY22 YTD, primarily due to larger green energy sector asset realisations in
MAM in the prior corresponding period. This was partially offset by continued growth in BFS.
The markets-facing businesses’ combined 3Q23 net profit contribution was substantially up on 3Q22. For FY23 YTD,
net profit contribution was substantially up on FY22 YTD. This was mainly due to exceptionally strong results in
commodities including gas and power contributions across all regions in CGM partially offset by a lower level of
realisations and lower fee and commission income in Macquarie Capital.
Macquarie Group’s financial position comfortably exceeds APRA’s Basel III regulatory requirements, with a Group capital
surplus of $A12.5 billion2,3 at 31 December 2022, up from $A12.2 billion at 30 September 2022. The Bank Group’s APRA
Basel III Common Equity Tier 1 capital ratio was 13.3 per cent (Harmonised: 16.9 per cent4
) at 31 December 2022, up
from 12.8 per cent at 30 September 2022. The Bank Group’s APRA leverage ratio was 5.2 per cent (Harmonised: 5.9 per
cent4
), the Liquidity Coverage Ratio (LCR) was 203 per cent5 and the Net Stable Funding Ratio (NSFR) was 117 per cent5
at 31 December 2022.
Third quarter business highlights
Ms Wikramanayake provided an overview of business activity undertaken during 3Q23:
MAM had assets under management (AUM) of $A797.8 billion at 31 December 2022, broadly in line with 30 September
2022. In the quarter, Public Investments AUM fell one per cent to $A513.5 billion, driven by foreign exchange
movements and net flows, partially offset by positive market movements. Private Markets AUM6
rose three per cent to
$A284.3 billion, driven by fund investments and increased asset valuations. At 31 December 2022, Private Markets had
equity under management of $A193.1 billion with $A31.6 billion to deploy after raising $A7.4 billion in new equity,
investing $A5.3 billion and divesting $A0.5 billion.
BFS had total deposits7 of $A125.7 billion at 31 December 2022, up eight per cent on 30 September 2022. The home
loan portfolio of $A105.4 billion increased four per cent on 30 September 2022, while funds on platform8 of $A117.0
billion increased five per cent. During 3Q23, the business banking loan portfolio increased two per cent to $A12.5 billion,
while the car loans portfolio decreased ten per cent to $A6.6 billion.
CGM had exceptionally strong results across the commodities platform, particularly in global Gas & Power and Oil
products, driven by increased trading, physical execution and logistics and client risk management opportunities from
unusually volatile market conditions. CGM also saw solid contribution from client risk management, market access and
financing activity across the Financial Markets businesses including fixed income, foreign exchange, credit, futures and
equities. CGM also saw a strong performance from Asset Finance driven by Technology, Media & Telecoms and
Structured Lending with strong annuity revenues continuing across the platform.
Macquarie Capital completed 84 transactions globally valued at $A92 billion in 3Q23
9
. Fee revenue was significantly
down on prior corresponding period however up on prior period. Investment-related income was significantly down on
the prior corresponding period and prior period, with significant realisations in the comparative periods. The Principal
Finance credit portfolio stood at over $A16 billion10 with more than $A1 billion deployed in 3Q23 through focused
investment in credit markets and bespoke financing solutions.
6 As at 31 Dec 22. Private Markets Assets under Management (AUM) is calculated as the proportional ownership interest in the underlying assets of funds and mandated assets that Macquarie actively manages or
advises for the purpose of wealth creation, adjusted to exclude cross-holdings in funds and reflect Macquarie’s proportional ownership interest of the fund manager. Private Markets AUM excludes uninvested equity.
7 Deposits in BFS include home loan offset accounts and exclude corporate/wholesale deposits.
8 Funds on platform includes Macquarie Wrap and Vision.
9 Dealogic & IJ Global for Macquarie Group completed M&A, investments, ECM and DCM transactions converted as at the relevant report date. Deal values reflect the full transaction value and not an attributed value.
Comparatives are presented as previously reported.
10 Principal Finance committed portfolio as at Dec 22.
Macquarie Group Limited
3
Outlook
The Group highlighted business-specific factors impacting its short-term outlook:
Macquarie Asset Management
• Base fees expected to be broadly in line with raising and deployment in Private Markets and the impact of
recent Public Investments acquisitions, substantially offset by unfavourable market movements
• Net Other Operating Income11 expected to be significantly down due to non repeat of Macquarie Infrastructure
Corporation gains partially offset by higher performance fees
• Green Investment Group expected to be significantly down due to strong financial year ending 31 March 2022
(FY22) performance. Material gains on realisations in 1H23 not expected to recur in the half year ended 31
March 2023 (2H23)
Banking and Financial Services
• Growth in loan portfolio, deposits and platform volumes
• Market dynamics to continue to drive margins
• Ongoing monitoring of provisioning
• Higher expenses to support volume growth, technology investment and regulatory requirements
Macquarie Capital – subject to market conditions:
• Transaction activity is expected to be substantially down on a record FY22, with market conditions weakening
in the financial year ending 31 March 2023 (FY23)
• Investment-related income expected to be broadly in line with FY22 with increased revenue from growth in the
Principal Finance credit portfolio, offset by lower revenue from asset realisations. No material realisations are
expected in the March 2023 quarter (4Q23)
• Continued balance sheet deployment in both debt and equity investments
Commodities and Global Markets - subject to market conditions, which make forecasting difficult:
• Commodities income, which has benefitted from strong trading conditions in FY23 YTD, is expected to be
substantially up on FY22, including the impact of timing of income recognition on gas and power transport and
storage contracts
• Increased contribution from the Financial Markets platform across client and trading activity
• Continued contribution from Asset Finance across sectors (excluding FY22 gain on disposal of certain assets)
From a Corporate perspective, the FY23 compensation ratio and effective tax rate are expected to be within the range
of historical levels.
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.
The range of factors that may influence our short-term outlook include:
• Market conditions including global economic conditions, inflation and interest rates, significant volatility events,
and the impact of geopolitical events
• Completion of period-end reviews and the completion rate of transactions
• The geographic composition of income and the impact of foreign exchange
• Potential tax or regulatory changes and tax uncertainties
11 Net Other Operating Income includes all operating income excluding base fees as well as income related to Green Investment Group (GIG).
Macquarie Group Limited
4
Ms Wikramanayake said, “Macquarie remains well-positioned to deliver superior performance over the medium term.
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.”

=========================================================

DYOR

i hold MQG ( 'free-carried' ) ( theoretical av. SP $26.76 )

my largest holding ( buy $ value )

 

[JohnDe]

MACQUARIE GROUP 3Q 2023 TRADING UPDATE
Key points
• Varied conditions for Macquarie’s diverse businesses in the three months to 31 December 2022 (3Q23) resulted in
a good quarter for the Group
• Net profit after tax (NPAT) for the nine months to 31 December 2022 (FY23 YTD) slightly up on the nine months to
31 December 2021 (FY22 YTD) – a period which included a record December 2021 quarter (3Q22) result
• Macquarie's annuity-style businesses' (Macquarie Asset Management (MAM) and Banking and Financial Services
(BFS)) combined 3Q23 net profit contribution1 substantially down on the prior corresponding period (3Q22) mainly
due to larger green energy sector asset realisations in MAM in the prior corresponding period. This was partially
offset by continued growth in BFS
- FY23 YTD net profit contribution significantly down on FY22 YTD primarily due to larger green energy
sector asset realisations in MAM in the prior corresponding period. This was partially offset by continued
growth in BFS
• Macquarie's markets-facing businesses' (Commodities and Global Markets (CGM) and Macquarie Capital) combined
3Q23 net profit contribution substantially up on prior corresponding period primarily due to the CGM result for
3Q23, which was substantially up on half year ended 30 September 2022 (1H23) driven by commodities including
gas and power contributions across all regions partially offset by a lower level of realisations and lower fee and
commission income in Macquarie Capital
- FY23 YTD net profit contribution substantially up on FY22 YTD mainly due to exceptionally strong results
in commodities including gas and power contributions across all regions in CGM partially offset by a lower
level of realisations and lower fee and commission income in Macquarie Capital
• Group financial position comfortably exceeds regulatory requirements
- Group capital surplus of $A12.5 billion2,3
- Bank CET1 ratio 13.3% (Harmonised: 16.9%4
), Leverage ratio 5.2% (Harmonised: 5.9%4
), LCR 203%5
, NSFR 117%5
1 Net profit contribution is management accounting profit before unallocated corporate costs, profit share and income tax. All numbers in this presentation have been reclassified to reflect the transfer of the Green
Investment Group from Macquarie Capital to Macquarie Asset Management effective 1 Apr 22.
2 The capital surplus shown is above regulatory minimums including the capital conservation buffer (CCB), per APRA ADI Prudential Standard 110, calculated at 8.5% RWA on a Level 2 basis for Macquarie Bank Limited
(MBL). This surplus also includes provision for internal capital buffers, forthcoming regulatory changes, as well as differences between Level 2 and Level 1 capital requirements, including the $A500m Level 1
operational capital overlay imposed by APRA from 1 Apr 21.
3 Based on materiality, the 8.5% used to calculate the Group capital surplus does not include the countercyclical buffer (CCyB) of ~9bps. The individual CCyB varies by jurisdiction and the Bank Group’s CCyB is
calculated as a weighted average based on exposures in different jurisdictions.
4 Basel III applies only to the Bank Group and not the Non-Bank Group. ‘Harmonised’ Basel III estimates are calculated in accordance with the BCBS Basel III framework, noting that MBL is not regulated by the BCBS
and so impacts shown are indicative only.
5 APRA imposed a 15% add-on to the Net Cash Outflow component of the LCR calculation, and a 1% decrease to the Available Stable Funding component of the NSFR calculation, effective from 1 Apr 21. The LCR
Net Cash Outflow add-on increased to 25% from 1 May 22.
Macquarie Group Limited
2
SYDNEY, 7 February 2023 Macquarie Group Limited (Macquarie) (ASX: MQG; ADR: MQBKY) today provided an update
on business activity in the third quarter of the financial year ending 31 March 2023 (3Q23).
Macquarie Group Managing Director and Chief Executive Officer, Shemara Wikramanayake, said: “Varied market
conditions have resulted in a good quarter for the Group reflecting the diversity of our activities.”
The annuity-style businesses’ combined 3Q23 net profit contribution was substantially down on 3Q22. For FY23 YTD,
net profit contribution significantly down on FY22 YTD, primarily due to larger green energy sector asset realisations in
MAM in the prior corresponding period. This was partially offset by continued growth in BFS.
The markets-facing businesses’ combined 3Q23 net profit contribution was substantially up on 3Q22. For FY23 YTD,
net profit contribution was substantially up on FY22 YTD. This was mainly due to exceptionally strong results in
commodities including gas and power contributions across all regions in CGM partially offset by a lower level of
realisations and lower fee and commission income in Macquarie Capital.
Macquarie Group’s financial position comfortably exceeds APRA’s Basel III regulatory requirements, with a Group capital
surplus of $A12.5 billion2,3 at 31 December 2022, up from $A12.2 billion at 30 September 2022. The Bank Group’s APRA
Basel III Common Equity Tier 1 capital ratio was 13.3 per cent (Harmonised: 16.9 per cent4
) at 31 December 2022, up
from 12.8 per cent at 30 September 2022. The Bank Group’s APRA leverage ratio was 5.2 per cent (Harmonised: 5.9 per
cent4
), the Liquidity Coverage Ratio (LCR) was 203 per cent5 and the Net Stable Funding Ratio (NSFR) was 117 per cent5
at 31 December 2022.
Third quarter business highlights
Ms Wikramanayake provided an overview of business activity undertaken during 3Q23:
MAM had assets under management (AUM) of $A797.8 billion at 31 December 2022, broadly in line with 30 September
2022. In the quarter, Public Investments AUM fell one per cent to $A513.5 billion, driven by foreign exchange
movements and net flows, partially offset by positive market movements. Private Markets AUM6
rose three per cent to
$A284.3 billion, driven by fund investments and increased asset valuations. At 31 December 2022, Private Markets had
equity under management of $A193.1 billion with $A31.6 billion to deploy after raising $A7.4 billion in new equity,
investing $A5.3 billion and divesting $A0.5 billion.
BFS had total deposits7 of $A125.7 billion at 31 December 2022, up eight per cent on 30 September 2022. The home
loan portfolio of $A105.4 billion increased four per cent on 30 September 2022, while funds on platform8 of $A117.0
billion increased five per cent. During 3Q23, the business banking loan portfolio increased two per cent to $A12.5 billion,
while the car loans portfolio decreased ten per cent to $A6.6 billion.
CGM had exceptionally strong results across the commodities platform, particularly in global Gas & Power and Oil
products, driven by increased trading, physical execution and logistics and client risk management opportunities from
unusually volatile market conditions. CGM also saw solid contribution from client risk management, market access and
financing activity across the Financial Markets businesses including fixed income, foreign exchange, credit, futures and
equities. CGM also saw a strong performance from Asset Finance driven by Technology, Media & Telecoms and
Structured Lending with strong annuity revenues continuing across the platform.
Macquarie Capital completed 84 transactions globally valued at $A92 billion in 3Q23
9
. Fee revenue was significantly
down on prior corresponding period however up on prior period. Investment-related income was significantly down on
the prior corresponding period and prior period, with significant realisations in the comparative periods. The Principal
Finance credit portfolio stood at over $A16 billion10 with more than $A1 billion deployed in 3Q23 through focused
investment in credit markets and bespoke financing solutions.
6 As at 31 Dec 22. Private Markets Assets under Management (AUM) is calculated as the proportional ownership interest in the underlying assets of funds and mandated assets that Macquarie actively manages or
advises for the purpose of wealth creation, adjusted to exclude cross-holdings in funds and reflect Macquarie’s proportional ownership interest of the fund manager. Private Markets AUM excludes uninvested equity.
7 Deposits in BFS include home loan offset accounts and exclude corporate/wholesale deposits.
8 Funds on platform includes Macquarie Wrap and Vision.
9 Dealogic & IJ Global for Macquarie Group completed M&A, investments, ECM and DCM transactions converted as at the relevant report date. Deal values reflect the full transaction value and not an attributed value.
Comparatives are presented as previously reported.
10 Principal Finance committed portfolio as at Dec 22.
Macquarie Group Limited
3
Outlook
The Group highlighted business-specific factors impacting its short-term outlook:
Macquarie Asset Management
• Base fees expected to be broadly in line with raising and deployment in Private Markets and the impact of
recent Public Investments acquisitions, substantially offset by unfavourable market movements
• Net Other Operating Income11 expected to be significantly down due to non repeat of Macquarie Infrastructure
Corporation gains partially offset by higher performance fees
• Green Investment Group expected to be significantly down due to strong financial year ending 31 March 2022
(FY22) performance. Material gains on realisations in 1H23 not expected to recur in the half year ended 31
March 2023 (2H23)
Banking and Financial Services
• Growth in loan portfolio, deposits and platform volumes
• Market dynamics to continue to drive margins
• Ongoing monitoring of provisioning
• Higher expenses to support volume growth, technology investment and regulatory requirements
Macquarie Capital – subject to market conditions:
• Transaction activity is expected to be substantially down on a record FY22, with market conditions weakening
in the financial year ending 31 March 2023 (FY23)
• Investment-related income expected to be broadly in line with FY22 with increased revenue from growth in the
Principal Finance credit portfolio, offset by lower revenue from asset realisations. No material realisations are
expected in the March 2023 quarter (4Q23)
• Continued balance sheet deployment in both debt and equity investments
Commodities and Global Markets - subject to market conditions, which make forecasting difficult:
• Commodities income, which has benefitted from strong trading conditions in FY23 YTD, is expected to be
substantially up on FY22, including the impact of timing of income recognition on gas and power transport and
storage contracts
• Increased contribution from the Financial Markets platform across client and trading activity
• Continued contribution from Asset Finance across sectors (excluding FY22 gain on disposal of certain assets)
From a Corporate perspective, the FY23 compensation ratio and effective tax rate are expected to be within the range
of historical levels.
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.
The range of factors that may influence our short-term outlook include:
• Market conditions including global economic conditions, inflation and interest rates, significant volatility events,
and the impact of geopolitical events
• Completion of period-end reviews and the completion rate of transactions
• The geographic composition of income and the impact of foreign exchange
• Potential tax or regulatory changes and tax uncertainties
11 Net Other Operating Income includes all operating income excluding base fees as well as income related to Green Investment Group (GIG).
Macquarie Group Limited
4
Ms Wikramanayake said, “Macquarie remains well-positioned to deliver superior performance over the medium term.
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.”

=========================================================

DYOR

i hold MQG ( 'free-carried' ) ( theoretical av. SP $26.76 )

my largest holding ( buy $ value )

Yes, I nice company to hold

Macquarie Group flags record profit on commodities boom

Macquarie Group’s earnings are tracking ahead of expectations with the company flagging bumper results in its commodities unit, and saying net profit in the first nine months of its year was “slightly up” on 2022’s record.

The asset manager and investment banking giant reported “varied conditions” across its business units in the three months ended December 31, but labelled the period a “good quarter” for the group.

In an ASX statement on Tuesday, reflecting a third-quarter trading update, Macquarie stopped short though of providing detailed guidance on the quantum of full year profits.

The statement said the result was buoyed by “exceptionally strong results” across Macquarie’s commodities platform, spanning gas and power and oil products, give increased trading, physical execution and risk management activity.

Macquarie noted net profit for the nine months ended December 31 was “slightly up” on the same period a year earlier, which included a record December 2021 quarter.

Its shares jumped 2 per cent to $192.75 early on the ASX as investors digested the trading update and some analysts tipped market expectations for Macquarie’s annual profit would be revised up.

“Macquarie has delivered a strong 3Q23 trading update in light of challenging market conditions, with upside risk to FY23 consensus (analyst estimates),” Morgan Stanley analysts said.

Citigroup’s trading desk was pleased with the group’s performance. “Overall, a better result than we had expected, driven by commodities.”

The Shemara Wikramanayake-led group reported a record annual profit of $4.71bn last year. It rules off its financial year on March 31 and its annual results announcement is in early May.

On the divisional outlook, Ms Wikramanayake signalled the commodities division would deliver annual earnings that would be “substantially up” on 2022. That guidance is subject to market conditions.


That marks another ratcheting up in guidance after Macquarie upgraded expectations for the commodities and global markets unit in October to say it expects income including that from gas and power transport and storage contracts to be up after a strong first half.

Before October, Macquarie expected commodities income to be lower in 2023.

Macquarie said on Tuesday its divisions that are linked to financial markets had a combined profit contribution in the December quarter that was “substantially up” on the same period a year earlier. Those units including Commodities and Global Markets and the investment banking arm, Macquarie Capital.

Divisions with more “annuity-style” or less volatile income had a combined December quarter profit contribution that was “substantially down” on the same period in 2022, largely due to green energy asset sales in that earlier period. Those units in that category are Macquarie’s asset management arm and its banking and financial services unit.

Ms Wikramanayake said Macquarie remained “well positioned to deliver superior performance” over the medium term.

“Varied market conditions have resulted in a good quarter for the group, reflecting the diversity of our activities,” she added.

Macquarie’s division guidance also pointed to an increased contribution from its financial markets platform in 2023, helped by customer trading activity and a “continued contribution” from asset finance, excluding a gain booked in 2022 as assets were sold.

In banking and financial services, Macquarie’s deposit book climbed 8 per cent from September 30 to December 31 to $125.7bn. The group’s home loan portfolio rose 4 per cent to $105.4bn, while funds on its investment platform increased 5 per cent to $117bn.

Macquarie is still navigating enforcement action by the banking regulator which saw it forced to hold $500m in additional capital from April 2021, due to breaches of prudential and reporting standards. On Tuesday, Macquarie said it was “making good progress” on a remediation plan to address those issues.

Macquarie’s asset management unit housed $797.8bn as at December 31, steady on the prior three months, as the value of listed Investments fell funds managed in private markets edged higher.

The investment banking division had a challenging quarter, in line with global trends.

Macquarie said fee revenue – including from advising on takeovers and sharemarket floats – was “significantly down” on the prior corresponding quarter. Investment-related income was also “significantly down”, after the group booked large asset sales in the prior December quarter.

As flagged by The Australian, this year Macquarie will conduct its more detailed operational briefing for investors and analysts in the US in March.

The roadshow will span operations in Philadelphia, New York and Houston across divisions including commodities and global markets, asset management and Macquarie’s capital unit.

Earlier this month, consensus analyst estimates had Macquarie reporting a full-year profit of $4.32bn for the 12 months ending March 31.

Tuesday’s announcement said Macquarie had group surplus capital of $12.5bn.

JOYCE MOULLAKIS SENIOR BANKING REPORTER

 

[divs4ever]

yes of all the shares i hold ( and have held in the past)

MQG is the only one i bought that behaved as predicted over 10 years ( that is stay in business and triple in share price )

but the law of averages say it will have a bad patch eventually

 

[Dona Ferentes]

Macquarie is Not a Bank, it's an investment bank. It derives most of its earnings from overseas, so franking is hard to come by. The local banks are mainly big building societies.

But that said, one of its activities is Banking, and that is growing very nicely. Their CMA has long been well positioned to attract short-term cash, plus a very profitable niche was established servicing SMSFs. And leveraging that ...

Macquarie Bank is now well established in the home lending market.

According to the latest figures from the Australian Prudential Regulation Authority (APRA), Macquarie Bank grew its owner-occupier home loan book by 22.6 per cent in the 12 months to January, while its investor home loan book grew by 29.6 per cent.

As a result of this growth, Macquarie is now firmly established as the country’s fifth-largest home loan lender, with a home lending portfolio at $58.9 billion of owner-occupier loans, and $44.1 billion of investor loans.

According to rival bankers, Macquarie’s growth rate reflects its sizeable investment in technology, which means it can quickly process home loans, an important attribute for mortgage brokers.

But it also reflects Macquarie’s strategy of targeting high-grade borrowers – those with low debt-to-income ratios and with hefty equity buffers.

Macquarie is causing headaches by offering sharply priced loans to lure high-quality borrowers.

Rivals believe that this is part of a long-term play to expand its base of well-heeled customers, who might also be interested in other investment products the bank offers..

 

[divs4ever]

one might wonder if the increased interest in acquiring Australian home mortgage exposure ( it has offered home mortgages for as long as i have been holding the shares just not a big slice of the market ) so they ( MQG ) can bundle them up for their investment products ( so they could maybe step back from leasing aircraft )

certainly an interesting time to be stepping up home mortgage exposure , do they see an opportunity in more complex products ( not just the vanilla home mortgage , after all they are well-practiced in the higher risk games )

 

[Dona Ferentes]

And taking a hit on today's update

Macquarie Group has cited weaker trading conditions for delivering first quarter financial 2024 net profit that was substantially down on the first quarter of the 2023 financial year.

Macquarie recorded a capital surplus of $10.8 billion at 30 June 2023.

Macquarie said its annuity-style businesses Macquarie Asset Management and banking and financial services posted a combined 1Q24 net profit contribution substantially down on 1Q23 “primarily due to lower investment-related income from green energy investments in MAM.”

Banking and financial services contribution was significantly up on the prior corresponding period “driven by growth in the loan portfolio and deposits together with improved margins."