Macquarie Group reported another record profit after the volatility in interest rates and commodities, especially offshore, drove revenue and fattened profit margins in the 12 months to the end of March.
Macquarie revealed a profit of $5.18 billion for the year to March 31 and was up 10% from a year ago and just ahead of market expectations for a net result around $5 billion.
The bank said it would pay a $4.50 per share dividend, 40% franked. That was up sharply from the $3.50 per share paid for the final half of 2021-22 and took the payout for the year to a record $7.50 per share, much higher than 2021-22’s $6.22.
The investment bank’s full year performance easily eclipsed better known names in the US, UK and European markets in what was a 12 month period made tougher by the Russian invasion of Ukraine and the volatile commodity prices that triggered; surging inflation and weakening levels of economic activity, plus a dearth of market listing and mergers and acquisitions activity.
Macquarie said its broader international business generated 71% of group profit for the year.
That saw its commodities and global markets business report a 54% rise in group net profit contribution. Macquarie said there had been a jump in trading and inventory management because of the volatility on commodity markets, and its gas, power and oil businesses.
That more than offset a 23% slump in profit contribution from its flagship asset management business – but that had enjoyed a surge in income in the prior year after selling assets.
As well the investment banking business Macquarie Capital, felt the pain of a quiet year with a sharp 47% slide in net profit contribution, as fee income from merger and acquisitions fell after a 2021-22’s boomlet.
In its banking and financial services division, which houses its Australian retail bank, saw a 20% rise in profit contribution as it made market share gains in deposits, loans, and benefited from wider margins.
CEO Shemara Wikramanayake highlighted the strength of Macquarie diversification, and said this would continue to support its performance over the medium term.
“Macquarie remains well-positioned to deliver superior performance in the medium term due to its diverse business mix across annuity-style and markets-facing businesses; deep expertise across diverse sectors in major markets with structural growth tailwinds; patient adjacent growth across new products and new markets; ongoing technology and regulatory spend to support the Group; a strong and conservative balance sheet; and a proven risk management framework and culture,” Wikramanayake said in her outlook commentary with Friday’s results.
