Macquarie Group’s profit 10% up in FY23

Macquarie Group has reported a 10% year-on-year net profit growth to $5.2 billion for the FY23, despite “a less certain market and economic backdrop” and thanks to its diversity of activities.

The Group’s profit in the second half of 2023 amounted to $2.9 billion and was up 25% compared to the first half and 8% up counting year-on-year.

At the end of March, assets under management (AUM) grew year-on-year 10% to $870.8 billion and were 5% up compared to the period ended in September, 2022.

The AUM growth was helped by investments by Macquarie Asset Management (MAM) Private Markets-managed funds and foreign exchange movements, which were partially offset by market movements in MAM Public Investments, the firm said in the announcement made to the Australian Securities Exchange (ASX).

MAM’s net profit contribution ($2.3 billion) was down 23% year-on-year but, according to the company, this was due to “significant income in the prior year from the disposition of assets in Macquarie Infrastructure Corporation”.

At the same time, annuity-style activities, undertaken by Macquarie Asset Management (MAM), Banking Financial Services (BFS) and certain businesses in Commodities and Global Markets (CGM) generated a 17% lower combined net profit contribution which stood at $4.1 billion.

However, markets-facing activities undertaken by Macquarie Capital and most businesses in CGM helped deliver a combined net profit contribution of $6.2 billion, up 38% on FY22, which was primarily driven by strong performance from CGM’s businesses.

The Group also reported that international income accounted for 71% of its total income.

Following this, net operating income was up 10% yoy ($19.1 billion) while operating expenses increased 12% to $12.1 billion.

As of March, 2023, the Group employed more than 20,000 people, of which 51% were based outside Australia. In addition, approximately 246,000 were employed across managed fund assets and investments.

The Board has announced a FY23 final ordinary dividend of $4.50 per share (40% franked), and up on the FY22 final ordinary dividend of $3.50 and advised that its dividend policy remained a 50-70% annual payout ratio.

Commenting on the forecast, Macquarie has listed a range of factors that may impact its short-term outlook, which included completion of period-end reviews and the completion rate of transactions, the geographic composition of income and the impact of foreign exchange as well as potential tax or regulatory changes and tax uncertainties.