SYDNEY: Macquarie Group (ASX: MQG) today announced a net profit after tax attributable to ordinary shareholders of $A3.015 billion for the year ended 31 March 2021 (FY21), up 10 percent on the year ended 31 March 2020 (FY20).
Profit for the half year ended 31 March 2021 (2H21) was $A2.30 billion, up 106 percent on the half year ended 30 September 2020 (1H21) and up 59 percent on the half year ended 31 March 2020 (2H20).
Macquarie Group Managing Director and Chief Executive Officer, Shemara Wikramanayake, said: “Macquarie’s businesses continued to perform well despite challenging market conditions, reflecting the diversity of our activities and ongoing focus on prudent risk management. Macquarie’s performance reflects our involvement in areas of deep structural need in the global economy and the commitment of our staff to work with clients to address opportunities and challenges in our communities.”
Annuity-style activities, which are undertaken by Macquarie Asset Management (MAM), Banking and Financial Services (BFS) and certain businesses in Commodities and Global Markets (CGM), generated a combined net profit contribution of $A3.314 billion, down four percent on FY20.
Markets-facing activities, which are undertaken by Macquarie Capital and most businesses in CGM, delivered a combined net profit contribution of $A2,783 million, up 39 per cent on FY20.
Macquarie Group (ASX: MQG) announced net operating income of $A12.774 billion was up four percent on FY20, while operating expenses of $A8.867 billion were in line with FY20.
International income accounted for 68 percent of Macquarie’s total income. The income tax expense of $A899 million was up 23 per cent on FY20 and the effective tax rate was 23 per cent, up from 21 per cent in FY20. The higher effective tax rate was mainly driven by the geographic composition and nature of earnings.
Assets under management at 31 March 2021 were $A563.5 billion, down six per cent from $A598.9 billion at 31 March 2020, largely due to foreign exchange impacts and a reduction in contractual insurance assets in Macquarie Investment Management (MIM), partially offset by MIM market movements and investment by funds managed by Macquarie Infrastructure and Real Assets (MIRA).
Macquarie Group (ASX: MQG) Board announced a FY21 final ordinary dividend of $A3.35 per share (40 per cent franked), up on the FY20 final ordinary dividend of $A1.80 per share (40 per cent franked).
This represents a FY21 ordinary dividend of $A4.70 per share (40 per cent franked), 2H21 payout ratio of 60 per cent and FY21 payout ratio of 56 per cent. Macquarie’s dividend policy remains at a 60 to 80 per cent annual payout ratio.
Macquarie Asset Management (MAM) delivered a net profit contribution of $A2,074 million, down five per cent from a record result of $A2,177 million in FY20. The result reflected lower Macquarie AirFinance income, lower performance fees and lower other fee and commission income, partially offset by the gain on sale of Macquarie European Rail and a net reversal of impairments.
Banking and Financial Services (BFS) delivered a net profit contribution of $A771 million, in line with FY20. The result reflected growth in deposits, the loan portfolio and funds on platform, and decreased credit impairment charges, partially offset by margin compression on deposits and a decrease in the vehicle finance portfolio.
Commodities and Global Markets (CGM) delivered a net profit contribution of $A2,601 million, up 50 per cent from $A1,738million in FY20. The result was driven by increased revenues throughout the year across the Commodities platform with strong risk management results across Resources, North American Gas and Power, EMEA Gas and Power and Agriculture.
Inventory Management and Trading was up across multiple sectors with improved results in Oil, North American Gas and Power and Precious metals. In addition, there were higher revenues and activity in Foreign exchange, interest rates and credit as well as Equity Derivatives and Trading. Among CGM’s annuity-style activities, there was a decrease in revenue from commodities lending and financing due to reduced volumes in specific sectors and an increase in provisions, partially offset by increased revenues from Specialised and Asset Finance.
Macquarie Capital delivered a net profit contribution of $A651 million, down 15 per cent from $A763 million in FY20. The result reflected lower fee and commission income due to lower M&A and DCM activity, partially offset by significantly higher ECM income in ANZ. Investment-related income was down due to fewer material asset realisations, partially offset by improved performance of investments in the portfolio. The result also reflects lower impairment and other credit charges and lower operating expenses.
Ms. Wikramanayake said: “Macquarie remains well-positioned to deliver superior performance in 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; a strong and conservative balance sheet; and a proven risk management framework and culture”.
Macquarie Group Ltd ASX: MQG
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6 May, 4:10 pm GMT+10 · Disclaimer