Slide 1: Presentation to investors and analysts
Presentation to investors and analysts Result announcement for the full year ended 31 March 2024 3 May 2024
Slide 2: Disclaimer
Disclaimer The material in this presentation has been prepared by Macquarie Group Limited ABN 94 122 169 279 (“MGL”) and is general background information about Macquarie’s (“MGL and its subsidiaries”) activities current as at the date of this presentation. This information is given in summary form
Slide 3: Agenda
Agenda 01 02 03 Introduction Overview of Result Analysis Result and Financial Management 04 05 Outlook Appendices
Slide 4: Introduction
01 Introduction Sam Dobson Head of Investor Relations
Slide 5: Overview of Result
02 Overview of Result Shemara Wikramanayake Managing Director and Chief Executive Officer
Slide 6: About Macquarie
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices About Macquarie Annuity-style activities | Net Profit Contribution ~45% Markets-facing activities | Net Profit Contribution ~55% BFS MAM CGM MacCap Banking and Financial Services Macquarie Asset Management Co
Slide 7: 2H24 and FY24 result
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices 2H24 result: $A2,107m up 49% on 1H24; down 27% on 2H23 FY24 result: $A3,522m down 32% on FY23 2H24 1H24 2H24 v FY24 FY23 FY24 v $Am $Am 1H24 $Am $Am FY23 Net operating income 8,977 7,910 á 13% 16,887 19,122 â
Slide 8: 2H24 net profit contribution from Operating Groups
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices 2H24 net profit contribution from Operating Groups $A3,855m up 35% on 1H24; down 33% on 2H23 Annuity-style activities á 33% Markets-facing activities á 37% $A1,718m $A2,137m ON 1H24 ON 1H24 â 8% â 45% ON 2H23
Slide 9: FY24 net profit contribution from Operating Groups
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices FY24 net profit contribution from Operating Groups $A6,713m down 35% on FY23 Annuity-style activities Markets-facing activities $A3,014m â 27% $A3,699m â 40% ON FY23 ON FY23 Non-Banking Group Macquarie Asset
Slide 10: Assets under management of $A938.3b
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Assets under management of $A938.3b 1 AUM increased 7% from $A878.6b as at 31 Mar 23 Increase due to favourable market movements, investments made by Private Markets-managed funds and favourable foreign excha
Slide 11: Diversification by region
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Diversification by region 1 International income 66% of total income 2 Total staff 20,666 of which 51% international. A further ~236,000 people employed across managed 3 fund assets and investments 4 Americas
Slide 12: Diversification by region
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Diversification by region 1 66% of total income in FY24 was generated offshore Total income $Am 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 — 2 Americas Europe, Middle East & Africa Asia Australia A
Slide 13: Macquarie Asset Management
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices MAM Macquarie Asset • From 1 Nov 23, established Credit as a division, combining the expertise and investment capabilities across private credit, asset finance and fixed income, to create a global integrated
Slide 14: Banking and Financial Services
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Personal Banking Business Banking Wealth Management Banking and • 3 Home loan portfolio of $A119.3b, up 10% on 31 Mar 23, representing approximately 5.3% of the Australian market • Business Banking loan portf
Slide 15: Commodities and Global Markets
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices 1 1 1 Asset Finance 8% Commodities 63% Financial Markets 29% Commodities and • Continued positive performance • and contribution across most Decreased risk management income primarily in EMEA Gas and Power, a
Slide 16: Macquarie Capital
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices MacCap Macquarie Global advisory and principal investing business providing integrated solutions leveraging our expertise, client networks and reach, along with our ability to invest across the capital struct
Slide 17: Funded balance sheet remains strong
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Funded balance sheet remains strong Term liabilities exceed term assets 31 Mar 23 31 Mar 24 $Ab $Ab 350 350 Commercial paper and certificates of deposit 9% 300 Commercial paper and certificates of 300 deposit
Slide 18: Basel III Group capital position
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Basel III Group capital position • Strong capital position to support business activity and invest in new opportunities where expected risk adjusted returns are attractive 1,2 • APRA Basel III Group capital s
Slide 19: Business capital requirements
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices 1 Business capital requirements 2H24 Key drivers 2 MAM FY24 business capital requirements increase of $A2.3b • Reduction due to divestments, predominantly driven by the agreed acquisition of six renewables in
Slide 20: Strong regulatory ratios
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Strong regulatory ratios Bank Group Level 2 Ratios (Mar 24) 250.0% 250.0% 8.0% 20.0% 18.7% 1 200.0% 200.0% 5.9% 191% 16.0% 6.0% 150.0% 150.0% 13.6% 5.2% 12.0% 4.0% 115% 100.0% 100.0% 8.0% 2.0% 50.0% 50.0% 4.0
Slide 21: Final dividend
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Final dividend 2H24 Ordinary Dividend FY24 Ordinary Dividend $A3.85 $A6.40 FROM FROM â $A4.50 â $A7.50 (40% franked) (40% franked) (40% franked) IN 2H23 (40% franked) IN FY23 2H24 Record Date Payout Ratio 14
Slide 22: Result Analysis and Financial Management
03 Result Analysis and Financial Management Alex Harvey Chief Financial Officer
Slide 23: Income statement key drivers
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Income statement key drivers Net interest and trading income of $A8,907m, down 16% on FY23 2H24 1H24 FY24 FY23 • Substantially lower inventory management and trading income along with reduced risk $Am $Am $Am
Slide 24: Operating expenses
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Operating expenses Key drivers Operating expenses in FY24 were broadly in line with the prior year primarily due to lower performance-related Continued investment across the Group to support long-term, profit
Slide 25: Regulatory compliance and technology spend
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Regulatory compliance and technology spend While compliance and technology spend continues to increase, we have made progress on a number of initiatives to support regulatory change with the rate of growth sl
Slide 26: Macquarie Asset Management
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Macquarie Asset Management Key drivers • Higher Private Markets base fees primarily due to fundraising and Decrease primarily driven by substantially lower investment-related and investments made by funds and
Slide 27: MAM AUM movement
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices MAM AUM movement Increase due to favourable market movements, investments made by Private Markets-managed funds and favourable foreign exchange movements, partially offset by assets no longer managed as a res
Slide 28: Banking and Financial Services
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Banking and Financial Services Key drivers • Higher Personal Banking income driven by above system growth of 13% in average home loan Growth in the loan portfolio and BFS deposits, together with 4 volumes , p
Slide 29: Banking and Financial Services
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Banking and Financial Services Strong growth across home loans, deposits, funds on platform and business banking loans $Ab $Ab 15.8 150 142.7 141.8 16 129.4 123.1 14 13.0 119.3 118.6 120 108.1 12 11.5 11.5 98
Slide 30: Commodities and Global Markets
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Commodities and Global Markets Key drivers • Commodities substantially down on FY23 – Risk Management down on FY23 primarily in Strong underlying client business; well-positioned for upside EMEA Gas and Power
Slide 31: Strong underlying client business
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Strong underlying client business Majority of income derived from underlying client business Operating Income Client numbers (excl. credit and other impairment charges) (excl. Asset Finance) Underlying client
Slide 32: Underlying client activity driving regulatory capital and trading revenues
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Underlying client activity driving regulatory capital and trading revenues 1 Regulatory capital Group Daily trading profit and loss FY20 - FY24 ($Am) 2 Days 120 100 80 60 40 20 — $Am Mar 20 Mar 21 Mar 22 Mar
Slide 33: Macquarie Capital
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Macquarie Capital Key drivers • Higher investment-related income primarily driven by: Reflects higher net income from growth in the private credit – Higher net interest income from the private 3 credit portfo
Slide 34: Macquarie Capital
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Macquarie Capital 1 Movement in capital Private Credit capital sector exposures $Ab 1.8 6.0 0.1 5.4 (0.7) 0.1 5.0 7% 4.2 8% 4.0 28% Diversified Real Estate Software and Tech Enabled Technology 11% Financial a
Slide 35: Balance sheet highlights
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Balance sheet highlights • Balance sheet remains solid and conservative – Term assets covered by term funding, stable deposits, hybrids and equity – Short-term wholesale funding covered by cash, liquids and o
Slide 36: Diversified issuance strategy
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Diversified issuance strategy 1 2 3 Term funding as at 31 Mar 24 – diversified by currency , tenor and type Currency Tenor Type EUR 7% GBP 4% CHF 1% JPY 2% 1-2yrs 15% Equity and hybrids 31% 8 OTH 2% Securitis
Slide 37: Diversified deposit base
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Diversified deposit base Macquarie has seen continued success in its long-term strategy of diversifying funding sources by growing its customer deposit base • Of approximately 1.85 million BFS clients, ~1.4 m
Slide 38: Loan and lease portfolios – funded balance sheet
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices 1 Loan and lease portfolios – funded balance sheet Operating Mar 24 Mar 23 Group Category $Ab $Ab Description Home loans 120.4 109.0 Loans secured by mortgages over residential property Business banking 15.7
Slide 39: Equity investments of $A13.2b
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices 1 Equity investments of $A13.2b Carrying value Carrying value Category Mar 24 $Ab Mar 23 $Ab Description Includes investments in regional infrastructure and new Macquarie Asset Management Private 2.0 1.8 core
Slide 40: Regulatory update
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Regulatory update Australia APRA has finalised or is in the process of implementing changes to a number of prudential standards. Macquarie notes the following key updates: 1 • On 31 Jan 24, APRA informed ADIs
Slide 41: Basel III Bank Group CET1 Ratio
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Basel III Bank Group Common Equity Tier 1 (CET1) Ratio • APRA Basel III Level 2 CET1 ratio at Mar 24: 13.6% 1 • Harmonised Basel III Level 2 CET1 ratio at Mar 24: 18.7% Bank Group Level 2 CET1 ratio 20.0% 5.1
Slide 42: Strong liquidity position
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Strong liquidity position 1 • 191% average LCR for Mar 24 quarter, based on daily observations – Well above regulatory minimum • Reflects longstanding conservative approach to liquidity management • $A58.6b o
Slide 43: Capital management update
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Capital management update Dividend Reinvestment Plan (DRP) 1 • On 19 Dec 23, the DRP in respect of the 1H24 dividend was satisfied through the allocation of ordinary shares at a price of $A167.04 per share. T
Slide 44: Outlook
04 Outlook Shemara Wikramanayake Managing Director and Chief Executive Officer
Slide 45: Short-term outlook
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Short-term outlook Factors impacting short-term outlook Annuity-style businesses Markets-facing businesses Non-Banking Group Macquarie Asset Management (MAM) Macquarie Capital (MacCap) • Base fees expected to
Slide 46: Short-term outlook
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Short-term outlook The range of factors that may influence our short-term outlook include: • Market conditions including: global economic conditions, inflation and interest rates, significant volatility event
Slide 47: Medium-term outlook
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Medium-term outlook Macquarie remains well-positioned to deliver superior performance in the medium term with its diverse business mix across annuity-style and markets-facing businesses Deep expertise across
Slide 48: Medium-term outlook
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Medium-term outlook Annuity-style businesses Markets-facing businesses Non-Banking Group Macquarie Asset Management (MAM) Macquarie Capital (MacCap) ▪ Well-positioned to respond to current market conditions a
Slide 49: Approximate business Basel III Capital and ROE
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Approximate business Basel III Capital and ROE 31 Mar 24 APRA Basel III Capital FY24 Return on Ordinary 18-year Average Return on Operating Group 1 2 @ 10.5% ($Ab) Equity Ordinary Equity Annuity-style busines
Slide 50: Presentation to investors and analysts (FY23)
Presentation to investors and analysts Result announcement for the full year ended 31 March 2023 5 May 2023
Slide 51: Appendix A: Detailed Result Commentary
05 Appendix A Detailed Result Commentary
Slide 52: Macquarie Asset Management
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Macquarie Asset Management Result • Base fees of $A2,874m, broadly in line with FY23 with offsetting impacts across MAM FY24 FY23 – Base fees in Private Markets were higher due to fundraising and investments
Slide 53: Banking and Financial Services
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Banking and Financial Services Result • Net interest and trading income of $A2,645m, up 5% on FY23 FY24 FY23 – 11% growth in the average loan portfolio and 14% growth in average BFS $Am $Am 5 deposit volumes
Slide 54: Commodities and Global Markets
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Commodities and Global Markets Result • Commodities income of $A3,516m, down 43% on FY23 and up 6% on FY22; FY24 FY23 – Risk management down 28% primarily in EMEA Gas and Power, and Resources due to decreased
Slide 55: Macquarie Capital
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Macquarie Capital Result • Net interest and trading income of $A690m, up 68% on FY23 primarily due to higher net FY24 FY23 5 interest income from the private credit portfolio, benefitting from a $A3.6b growth
Slide 56: Corporate
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Corporate Result • Net interest and trading income of $A973m, substantially up on FY23. The movement FY24 FY23 includes: $Am $Am – Increased earnings on capital reflecting higher central bank interest rates a
Slide 57: Appendix B: Additional Information Funding
05 Appendix B Additional Information Funding
Slide 58: Macquarie funding structure
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Macquarie funding structure • MGL and MBL are Macquarie’s two primary external funding vehicles which have separate and distinct funding, capital and liquidity management arrangements 1 • MBL provides funding
Slide 59: Funded balance sheet reconciliation
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Funded balance sheet reconciliation • The funded balance sheet is a simple representation of Macquarie’s funding requirements once accounting related gross-ups and self-funded assets have been netted down fro
Slide 60: Funding for Macquarie
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Funding for Macquarie Mar 24 Mar 23 • Well-diversified funding sources $Ab $Ab • Term assets covered by term funding, stable deposits, hybrids and Funding sources equity Commercial paper and certificates of d
Slide 61: Funding for the Bank Group
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Funding for the Bank Group Mar 24 Mar 23 • Bank balance sheet remains liquid and well capitalised, $Ab $Ab with a diverse range of funding sources Funding sources Commercial paper and certificates of deposit
Slide 62: Funding for the Non-Bank Group
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Funding for the Non-Bank Group Mar 24 Mar 23 • Non-Bank Group is predominantly term funded $Ab $Ab • Term funding beyond one year (excluding equity and Funding sources Net trade (debtors)/creditors (0.9) — se
Slide 63: Explanation of funded balance sheet reconciling items
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Explanation of funded balance sheet reconciling items Outstanding trade Derivative revaluation Segregated funds settlement balances Working capital assets Offsetting derivative positions do not These represen
Slide 64: Conservative long standing liquidity risk management framework
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Conservative long standing liquidity risk management framework Liquidity Policy Liquidity Framework The liquidity risk appetite is intended to ensure that Macquarie is A robust liquidity risk management frame
Slide 65: Appendix C: Additional Information Capital
05 Appendix C Additional Information Capital
Slide 66: Macquarie Basel III regulatory capital
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Macquarie Basel III regulatory capital Surplus calculation APRA Basel III 31 Mar 24 $Am Macquarie eligible capital Bank Group Gross Tier 1 capital 23,799 Non-Bank Group eligible capital 15,542 Eligible capita
Slide 67: Macquarie APRA Basel III regulatory capital
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Macquarie APRA Basel III regulatory capital Bank Group contribution 1 Risk-weighted assets Tier 1 Deductions Capital Requirement 31 Mar 24 $Am $Am $Am Credit risk On balance sheet 57,416 6,029 Off balance she
Slide 68: Macquarie regulatory capital
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Macquarie regulatory capital Non-Bank Group contribution • APRA has specified a regulatory capital framework for Macquarie • A dollar capital surplus is produced; no capital ratio calculation is specified • T
Slide 69: Macquarie regulatory capital
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Macquarie regulatory capital Non-Bank Group contribution Assets Capital Requirement Equivalent Risk 31 Mar 24 $Ab $Am Weight Funded assets Cash and liquid assets 13.8 247 22% 1 Loan assets 21.5 2,014 117% Deb
Slide 70: Appendix D: Glossary
05 Appendix D Glossary
Slide 71: Glossary
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Glossary $A / AUD Australian Dollar CGM Commodities and Global Markets $US / USD United States Dollar CLF Committed Liquidity Facility £ / GBP Pound Sterling CMA Cash Management Account € / EUR Euro COG Corpo
Slide 72: Glossary
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Glossary IR Interest Rates MKOF4 Macquarie Korea Opportunities Fund 4 IT Information Technology MPA Mortgage Professional Australia LAC Loss-Absorbing Capacity No. Number LCR Liquidity Coverage Ratio NPAT Net
Slide 73: Presentation to investors and analysts (FY23)
Presentation to investors and analysts Result announcement for the full year ended 31 March 2023 5 May 2023