Macquarie Group (ASX:MQG)Global financial services provider known for its diverse operations in asset management, banking and commodities markets, announced a 14% year-on-year increase in half-yearly net profit after tax to $1.61 billion per the period ending 30 September 2024, driven largely by higher performance fees in Macquarie Asset Management (MAM) and further digitalisation in Banking and Financial Services (BFS). This result, however, marked a decline of 23% compared to the previous six months, reflecting the challenges in all segments facing the market.
The company’s annuity-style businesses, which include MAM and BFS, produced profits of $1.61 billion, up 25% from the prior corresponding period. MAM’s success has come from increasing performance fees, benefiting from the realization of assets in green investments. The Banking and Financial Services division, while experiencing margin compression due to competitive pressure in the lending and deposit markets, has seen steady growth thanks to advisory fees and an expanded loan portfolio.
Meanwhile, Macquarie’s market-facing operations, including Commodities and Global Markets (CGM) and Macquarie Capital, have shown mixed results. CGM, which made a profit of $1.32 billion, fell 5% as volatility remained subdued, impacting client hedging activity in energy markets. Macquarie Capital reported a 14% decline in profit contributions to $371 million, citing lower net profit from consolidated investments and increased financing costs associated with equity investments. This decline offset gains in private credit, where loan volumes increased amid higher fees from Asia-led intermediation activity.
Macquarie’s capital strength continued, with a regulatory capital surplus of $9.8 billion and a Bank Common Equity Tier 1 ratio of 12.8%, above the Australian Prudential Regulation Authority’s requirements. The Board has declared an interim dividend of $2.60 per share, representing a payout ratio of 61%.
Reflecting on the results, CEO Shemara Wikramanayake said: “Macquarie’s results highlight the resilience and adaptability of our business mix in changing market conditions, particularly across our wealth management and digital finance expansion” .
Shares are trading 4.24% lower at $221.70.