Slide 1: Presentation to investors and analysts: FY17 result announcement
For personal use only Presentation to investors and analysts Result announcement for the full year ended 31 March 2017 5 May 2017
Slide 2: Disclaimer
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Disclaimer For personal use only The material in this presentation has been prepared by Macquarie Group Limited ABN 94 122 169 279 (MGL) and is general bac
Slide 3: Agenda
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Agenda For personal use only 1. Introduction – Karen Khadi 2. Overview of Result – Nicholas Moore 3. Result Analysis and Financial Management – Patrick Upf
Slide 4: Introduction
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Introduction 01 For personal use only Karen Khadi – Head of Investor Relations MACQUARIE 2017
Slide 5: Overview of Result
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Overview of Result 02 For personal use only Nicholas Moore – Managing Director and Chief Executive Officer MACQUARIE 2017
Slide 6: About Macquarie: Building for the long-term
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices ABOUT MACQUARIE Building for the long-term For personal use only Macquarie Asset Management (MAM) • Top 50 global asset manager with $A480.0b1 of assets un
Slide 7: 2H17 result: $A1,167m up 11% on 1H17
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices 2H17 result: $A1,167m up 11% on 1H17 For personal use only 2H17 1H17 2H17 v $Am $Am 1H17 Net operating income 5,146 5,218 1% Total operating expenses (3,52
Slide 8: 2H17 result: up 11% on 1H17; up 18% on 2H16
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices 2H17 result: $A1,167m up 11% on 1H17; up 18% on 2H16 For personal use only ANNUITY-STYLE BUSINESSES CAPITAL MARKETS FACING BUSINESSES $A1,610m 2% ON 1H17 $
Slide 9: FY17 result: $A2,217m up 7.5% on FY16
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices FY17 result: $A2,217m up 7.5% on FY16 For personal use only 2H17 1H17 2H17 v FY17 FY16 FY17 v $Am $Am 1H17 $Am $Am FY16 Net operating income 5,146 5,218 1%
Slide 10: FY17 result: $A2,217m up 7.5% on FY16
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices FY17 result: $A2,217m up 7.5% on FY16 For personal use only ANNUITY-STYLE BUSINESSES CAPITAL MARKETS FACING BUSINESSES $A3,249m 4% ON FY16 $A1,454m 12% ON
Slide 11: Financial performance
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Financial performance For personal use only Operating income $A10,364m Profit $A2,217m $Am FY17 OPERATING INCOME $Am FY17 PROFIT 12,000 2,500 2 % ON FY16 2
Slide 12: Annuity-style vs Capital markets facing businesses
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Annuity-style vs Capital markets facing businesses For personal use only Annuity-style businesses represent approximately 70% of the Groups’ performance1 N
Slide 13: Assets under management of $A481.7 billion
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Assets under management of $A481.7 billion1 For personal use only AUM was broadly in line with 31 Mar 16, due to favourable market movements and additional
Slide 14: Diversification by region
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Diversification by region For personal use only International income 63% of total income1 Americas Total staff 13,597; International staff 55% of total INC
Slide 15: Diversification by region
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Diversification by region For personal use only • 63% of total income1 in FY17 was generated offshore • A 10% movement2 in AUD is estimated to have approx.
Slide 16: Macquarie Asset Management
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Macquarie Asset Management For personal use only OPERATING INCOME MACQUARIE INFRASTRUCTURE MACQUARIE INVESTMENT MACQUARIE SPECIALISED AND REAL ASSETS MANAG
Slide 17: Corporate and Asset Finance
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Corporate and Asset Finance For personal use only OPERATING INCOME LENDING ASSET FINANCE $A1,831m 6 % • Lending’s funded loan portfolio of $A6.8b1 down 28%
Slide 18: Banking and Financial Services
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Banking and Financial Services For personal use only OPERATING INCOME PERSONAL BANKING WEALTH MANAGEMENT BUSINESS BANKING $A1,648m 13 % Provides a full ret
Slide 19: Commodities and Global Markets
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Commodities and Global Markets For personal use only OPERATING INCOME Commodity Markets (Physical & Financial) Financial Markets (Primary & Secondary) Futu
Slide 20: Macquarie Capital
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Macquarie Capital For personal use only OPERATING INCOME AUSTRALIA AND ASIA AMERICAS EMEA % NEW ZEALAND $A1,206m 2 Activity Activity Activity Activity ON F
Slide 21: Green Investment Bank
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Green Investment Bank For personal use only Macquarie-led consortium acquires GIB for £2.3b Combined investment1 in green infrastructure Green Investment B
Slide 22: Funded balance sheet remains strong
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Funded balance sheet remains strong For personal use only Term liabilities cover term assets $Ab 31 Mar 16 $Ab 31 Mar 17 TOTAL CUSTOMER DEPOSITS7 140 140 $
Slide 23: Basel III capital position
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Basel III capital position For personal use only • APRA Basel III Group capital at Mar 17 of $A18.7b, Group capital surplus of $A5.5b1 $Ab Group regulatory
Slide 24: Strong regulatory ratios
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Strong regulatory ratios For personal use only Bank Group (Mar 17) 17.5% 7.3% 250% 7.0% 14.0% 13.3% 6.0% 200% 5.0% 6.4% 10.5% 150% 168% 11.1% 4.0% 7.0% 3.0
Slide 25: Final dividend
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Final dividend For personal use only 2H17 ORDINARY DIVIDEND FROM FY17 ORDINARY DIVIDEND FROM $A 2.80 $A1.90 $A $A4.00 (45% franked) 4.70 (40% franked) (45%
Slide 26: Result Analysis and Financial Management
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Result Analysis and Financial Management 03 For personal use only Patrick Upfold – Chief Financial Officer MACQUARIE 2017
Slide 27: Income Statement key drivers
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Income Statement key drivers For personal use only 2H17 1H17 FY17 FY16 • Net interest and trading income of $A3,954m, down 9% on FY16 $Am $Am $Am $Am – CGM
Slide 28: Income Statement by Operating Group
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Income Statement by Operating Group For personal use only Net profit contribution ($Am) 2,500 32 127 (189) 59 68 163 2,000 (106) 1,500 2,217 1,000 2,063 50
Slide 29: Macquarie Asset Management
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Macquarie Asset Management For personal use only Strong result; pcp benefited from record performance fees $Am KEY DRIVERS 1,800 • Lower performance fees c
Slide 30: MAM AUM movement
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices MAM AUM movement For personal use only MAM $A477b MIM ($A17b) MIRA +$A18b MSIS +$A2b MAM $A480b $Ab 600 Flat 2 500 MSIS $A4b 17 18 MSIS $A6b (34) 400 MIM M
Slide 31: MIRA EUM movement
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices MIRA EUM movement For personal use only $Ab 90 1.3 80 15.6 (3.9) (2.3) 70 60 50 40 77.2 66.5 30 20 10 - 2 FY16 EUM Capital raised Listed security price Com
Slide 32: Corporate and Asset Finance
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Corporate and Asset Finance For personal use only AWAS and Esanda contribution partially offset by reduced activity in CAF Lending $Am KEY DRIVERS 1,600 •
Slide 33: Banking and Financial Services
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Banking and Financial Services For personal use only Strong organic growth as well as gain on sale of businesses $Am 600 KEY DRIVERS • Gain on sale of the
Slide 34: Commodities and Global Markets
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Commodities and Global Markets For personal use only Increased contribution reflects improved asset performance and continued strength across the trading p
Slide 35: Macquarie Capital
Macquarie Group Limited and its subsidiaries 2017 Full Year Results macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Macquarie Capital For personal use only Improved result driven by reduced impairments and increased fee activity $Am KEY DRI
Slide 36: Other income
Macquarie Group Limited and its subsidiaries 2017 Full Year Results macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Other income For personal use only KEY DRIVERS $Am 1,800 • Increase in MAM primarily due to gains from the partial sale of M
Slide 37: Impairment expense
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Impairment expense For personal use only KEY DRIVERS $Am 900 • Decline in CAF due to lower impairments in Lending and Aviation 48 800 (28) • Increase in BF
Slide 38: Costs of compliance
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Costs of compliance For personal use only Regulatory project spend FY17 $Am FY16 $Am • The industry continues to see an increase in regulatory Basel III an
Slide 39: Balance sheet highlights
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Balance sheet highlights For personal use only • Balance sheet remains solid and conservative – Term assets covered by term funding, stable deposits and eq
Slide 40: Diversified issuance strategy
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Diversified issuance strategy For personal use only Term funding as at 31 Mar 17 – diversified by currency1, tenor2 and type Currency Tenor Type Subordinat
Slide 41: Continued customer deposit growth
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Continued customer deposit growth For personal use only • Macquarie has been successful in pursuing its strategy of diversifying its funding sources throug
Slide 42: Loan and lease portfolios – Funded Balance Sheet
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Loan and lease portfolios1 – Funded Balance Sheet For personal use only Operating Mar 17 Mar 16 Group Category $Ab $Ab Description Asset Finance2 22.2 23.3
Slide 43: Equity investments of $A5.0b
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Equity investments of $A5.0b1 For personal use only Carrying value2 Carrying value2 Mar 17 Mar 16 Category $Ab $Ab Description Macquarie Asset Management (
Slide 44: Regulatory update
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Regulatory update For personal use only • Basel Capital Framework – The Basel Committee has delayed the finalisation of proposals to amend the calculation
Slide 45: Bank Group Basel III Common Equity Tier (CET1) Ratio
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Bank Group Basel III Common Equity Tier 1 (CET1) Ratio For personal use only • APRA Basel III CET1 ratio: 11.1%1 • Harmonised Basel III CET1 ratio: 13.3%2
Slide 46: Strong liquidity position maintained
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Strong liquidity position maintained For personal use only • 168% average LCR for Mar 17 quarter, based on daily observations – Maintained well above regul
Slide 47: Capital management update
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Capital management update For personal use only The Board has resolved: ‒ To purchase shares1,2 to satisfy the MEREP requirements of approx. $A378m. The
Slide 48: Outlook
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Outlook 04 For personal use only Nicholas Moore – Managing Director and Chief Executive Officer MACQUARIE 2017
Slide 49: Factors impacting short-term outlook
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Factors impacting short-term outlook For personal use only FY18 combined net profit contribution from operating groups expected to be broadly in line with
Slide 50: Short-term outlook
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Short-term outlook For personal use only • We currently expect the FY18 combined net profit contribution1 from operating groups to be broadly in line with
Slide 51: Medium-term
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Medium-term For personal use only • Macquarie remains well positioned to deliver superior performance in the medium-term • Deep expertise in major markets
Slide 52: Approximate business Basel III Capital & ROE
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Approximate business Basel III Capital & ROE For personal use only 1 APRA Basel III Capital Approx. FY17 Return Approx. 11-Year Average 2 @ 8.5% ($Ab) on O
Slide 53: Medium-term
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Medium-term For personal use only Macquarie Asset Management (MAM) • Annuity-style business that is diversified across regions, products, asset classes and
Slide 54: Appendix A: Detailed result commentary
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices APPENDIX A Detailed result commentary For personal use only MACQUARIE 2017
Slide 55: Macquarie Asset Management: Result
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Macquarie Asset Management For personal use only Result FY17 FY16 • Base fees of $A1,574m, broadly in line with FY16 $Am $Am – Underlying base fees up on F
Slide 56: Corporate and Asset Finance: Result
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Corporate and Asset Finance For personal use only Result FY17 FY16 • Net interest and trading income of $A712m, down 16% on FY16 $Am $Am – Lower Lending vo
Slide 57: Banking and Financial Services: Result
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Banking and Financial Services For personal use only Result FY17 FY16 • Net interest and trading income of $A1,049m, up 11% on FY16 $Am $Am – Increased ave
Slide 58: Commodities and Global Markets: Result
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Commodities and Global Markets For personal use only Result FY17 FY16 • Commodities income of $A1,132m, down 15% on FY16 $Am $Am – Risk management products
Slide 59: Macquarie Capital: Result
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Macquarie Capital For personal use only Result FY17 FY16 • Fee and commission income of $A887m, up 2% on FY16; increased fee income $Am $Am across M&A Advi
Slide 60: Appendix B: Additional information – Funding
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices APPENDIX B Additional information – Funding For personal use only MACQUARIE 2017
Slide 61: Macquarie funding structure
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Macquarie funding structure For personal use only • MGL and MBL are Macquarie’s two primary external funding vehicles which have separate and distinct fund
Slide 62: Funded balance sheet reconciliation
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Funded balance sheet reconciliation For personal use only • Macquarie’s statement of financial position is prepared based on generally accepted accounting
Slide 63: Funding for Macquarie
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Funding for Macquarie For personal use only Mar 17 $Ab Mar 16 $Ab • Well diversified funding sources Funding sources • Minimal reliance on short-term whole
Slide 64: Funding for the Macquarie Bank Group
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Funding for the Macquarie Bank Group For personal use only Mar 17 $Ab Mar 16 $Ab • Bank balance sheet remains liquid, well capitalised and with a diversity
Slide 65: Funding for the Non-Bank Group
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Funding for the Non-Bank Group For personal use only Mar 17 $Ab Mar 16 $Ab • Non-Bank Group is predominately term funded Funding sources • Term funding bey
Slide 66: Explanation of Funded Balance Sheet reconciling items
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Explanation of Funded Balance Sheet reconciling items For personal use only • Self-funded trading assets: Macquarie enters into stock borrowing and lending
Slide 67: Conservative long standing liquidity risk management framework
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Conservative long standing liquidity risk management framework For personal use only Liquidity Policy • The key requirement of MGL and MBL’s liquidity poli
Slide 68: Appendix C: Additional information – Capital
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices APPENDIX C Additional information – Capital For personal use only MACQUARIE 2017
Slide 69: Macquarie Basel III regulatory capital
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Macquarie Basel III regulatory capital For personal use only Surplus calculation Harmonised APRA Basel III Basel III 31 Mar 17 $Am $Am Macquarie eligible c
Slide 70: Macquarie APRA Basel III regulatory capital: Bank Group contribution
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Macquarie APRA Basel III regulatory capital For personal use only Bank Group contribution Risk-weighted assets Tier 1 Deductions Capital Requirement1 31 Ma
Slide 71: Macquarie regulatory capital: Non-Bank Group contribution
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Macquarie regulatory capital For personal use only Non-Bank Group contribution • APRA has specified a regulatory capital framework for Macquarie • A dollar
Slide 72: Macquarie regulatory capital: Non-Bank Group contribution
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Macquarie regulatory capital For personal use only Non-Bank Group contribution Capital Assets Requirement Equivalent 31 Mar 17 $Ab $Am Risk Weight Funded a
Slide 73: Appendix C: Glossary
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices APPENDIX C Glossary For personal use only MACQUARIE 2017
Slide 74: Glossary
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Glossary For personal use only $A / AUD Australian Dollar CAF Corporate and Asset Finance $C / CAD Canadian Dollar CCB Capital Conservation Buffer $US / US
Slide 75: Glossary
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Glossary For personal use only EUM Equity Under Management LCR Liquidity Coverage Ratio FSI Financial System Inquiry LNG Liquefied Natural Gas FX Foreign E
Slide 76: Glossary
Macquarie FY17 result announcement macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Glossary For personal use only MQA Macquarie Atlas Roads SGX Singapore Exchange MSIS Macquarie Specialised Investment Solutions SME Small and Medium Enterp
Slide 77: Presentation to investors and analysts
For personal use only Presentation to investors and analysts Result announcement for the full year ended 31 March 2017 5 May 2017