Macquarie Reports Record Fiscal Year Profit, Increases Dividend — Update

By Alice Uribe

SYDNEY--Macquarie Group raised its final dividend by almost 30% and reported a 10% rise in annual profit, driven partly by a strong result in its markets-facing businesses that include Macquarie Capital.

Macquarie, Australia's biggest investment bank and asset manager, said its net profit rose to a record 5.18 billion Australian dollars (US$3.47 billion) in the 12 months through March, from A$4.71 billion the previous year.

Consensus forecasts compiled by FactSet projected Macquarie's full-year net profit would be A$5.04 billion.

"Against a less certain market and economic backdrop, the diversity of Macquarie's activities and the expertise of our teams ensured we maintained strong performance during the year," said Chief Executive Shemara Wikramanayake.

Directors of the company declared a final dividend of A$4.50 per share, compared to a final dividend of A$3.50 last year.

Macquarie, which has a reputation among analysts for conservative forecasts, didn't provide specific guidance, but Ms. Wikramanayake said the company "remains well-positioned to deliver superior performance in the medium term," in part due to its diverse business mix.

The company's annuity-style activities, which are undertaken in part by Macquarie Asset Management, generated a combined net profit of A$4.14 billion, down 17% from a year earlier.

Its markets-facing activities, which are undertaken by Macquarie Capital and most businesses in the Commodities and Global Markets unit, delivered a combined net profit contribution of A$6.21 billion, up 38% on the previous year.

Macquarie said this was primarily driven by strong performance from CGM's businesses, which made a net profit contribution of A$6.0 billion, up 54% from A$3.9 billion in fiscal 2022.

"The result reflected an increased contribution across Commodities, primarily from inventory management and trading and risk management activities. Inventory management and trading increased substantially, driven by trading income from regional supply and demand imbalances primarily in North American Gas and Power markets," said Macquarie.

For the full year, Macquarie's net operating income was A$19.12 billion, up 10% on year while operating expenses of A$12.13 billion increased by 12%. International income accounted for 71% of Macquarie's total income.

Macquarie said its financial position comfortably exceeded regulatory minimum requirements, with group surplus capital of A$12.6 billion at the end of March.

Macquarie's banking unit has a common equity tier 1 level 2 ratio of 13.7%.

Write to Alice Uribe at alice.uribe@wsj.com

(END) Dow Jones Newswires

May 04, 2023 18:56 ET (22:56 GMT)

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