Macquarie Group, Ltd. · ASX:MQG
Macquarie — Macquarie Bank — Debt Investor Presentation (September 2014)
36 slides from Macquarie's debt investor presentation, Sep 15, 2014
Slide 1: Macquarie Bank Capital Notes Offer
For personal use only Macquarie Bank Limited Macquarie Bank Capital Notes Offer September 2014 PAGE 1
Slide 2: Important notice and disclaimer
Important notice and disclaimer For personal use only This document has been prepared by Macquarie Bank Limited ACN 008 583 542 (“MBL”) in relation to its proposed offer of mandatorily convertible notes (“BCN”) as described in this document. A Prospectus1 in respect of BCN was lodged with ASIC on 15
Slide 3: Overview
For personal use only Overview PAGE 3 01
Slide 4: Bank Capital Notes Offer Overview
Macquarie Bank Capital Notes Offer Overview For personal use only Issuer Macquarie Bank Limited (“MBL”) Type of security Fully paid, subordinated, non-cumulative, unsecured, mandatorily convertible, perpetual capital notes (“BCN”) Offer size $400 million, with the ability to raise more or less
Slide 5: Overview of Macquarie Bank Limited
For personal use only Overview of Macquarie Bank Limited 02 PAGE 5
Slide 6: Organisational structure
Macquarie Bank Limited Organisational structure For personal use only Overview of MBL Macquarie Bank Limited (“MBL”) undertakes the Bank Group activities of the Macquarie Group At 31 March 2014, MBL employed over 5,400 people, had total assets of $A139.9 billion, and total equity of $A9.5 billio
Slide 7: Historical financial performance
Macquarie Bank Limited Historical financial performance For personal use only MBL’s Consolidated Income Statement FY14 FY13 FY14 v $Am $Am FY13 Net operating income 5,486 4,601 19% Total operating expenses (4,091) (3,572) 15% Operating profit before income tax 1,395 1,029 36% Income tax expense (621
Slide 8: Macquarie Bank proportion of Macquarie Group
Macquarie Bank Limited Macquarie Bank proportion of Macquarie Group For personal use only MBL is a significant contributor to Macquarie Group’s profit 1,400 Profit attributable to ordinary equity MBL Group excluding MBL 1,265 1,200 In FY14, MBL profit was 59.4% of the 1,050 Macquarie Group profit
Slide 9: Group funding structure
Macquarie Bank Limited Group funding structure For personal use only Macquarie Group Limited (MGL) and MBL are the Group’s two primary external funding vehicles MGL and MBL have separate and distinct funding, capital and liquidity management arrangements MBL provides funding to the Bank Group —
Slide 10: Well diversified funding sources
Macquarie Bank Limited Well diversified funding sources For personal use only MBL term funding (drawn and undrawn1) maturing beyond Diversity of MBL funding sources one year (including equity and hybrids) $Ab Wholesale issued paper 11% 16.0 Equity & Hybrids 12% Equity and hybrids Loan capital 3% Dep
Slide 11: Basel III Common Equity Tier (CET1) Ratio
Macquarie Bank Limited Basel III Common Equity Tier 1 (CET1) Ratio For personal use only Strong Bank Group APRA Basel III CET1 ratio – Common Equity Tier 1: 9.6%; Tier 1: 10.6% Basel III applies only to the Bank Group and not the Non-Bank Group Bank Group Common Equity Tier 1 (CET1) Ratio: Basel
Slide 12: Capital position
Macquarie Bank Limited Capital position For personal use only MBL’s Level 1 and Level 2 capital ratios are set out in the tables below Proforma1 as at 31 APRA Basel III capital ratios As at 31 March 2014 As at 31 March 2013 March 2014 Level 2 Macquarie Bank Group Common Equity Tier 1 Capital ratio 9
Slide 13: BCN Key Terms
For personal use only BCN Key Terms 03 PAGE 13
Slide 14: BCN Key Terms: Distributions
BCN Key Terms Distributions For personal use only Distributions on BCN are discretionary, non-cumulative floating rate payments Distributions are scheduled to be paid in arrears commencing on 24 March 2015 and thereafter semi-annually, subject to the Payment Conditions, until BCN are Exchanged,
Slide 15: BCN Key Terms: Mandatory Exchange
BCN Key Terms Mandatory Exchange For personal use only The Issuer must Exchange BCN into MGL Ordinary Shares on 24 March 2023 (if BCN have not been Redeemed, Exchanged or Written-Off beforehand) provided that certain Exchange Conditions are satisfied Mandatory Exchange The conditions to Mandator
Slide 16: BCN Key Terms: Automatic Exchange
BCN Key Terms Automatic Exchange For personal use only The Issuer is required to immediately Exchange some or all BCN into MGL Ordinary Shares where a Common Equity Automatic Exchange Tier 1 Trigger Event or a Non-Viability Event occurs (referred to as an “Automatic Exchange” following an “Automat
Slide 17: Summary of certain events during the term of BCN
BCN Key Terms Summary of certain events that may occur during the term of BCN For personal use only Is APRA Do When could this approval conditions What value will a BCN holder receive In what form will the value be provided to Event occur? Consequences required? apply? (per BCN)? BCN Holders? Tax Ev
Slide 18: Comparison between BCN and other Securities
BCN Key Terms Comparison between BCN and other Securities For personal use only Feature Term deposit MIS MCN BCN MGL Ordinary Shares Issuer Bank, credit union or MBL and Macquarie MGL MBL MGL building society (e.g. Finance Ltd (ACN 001 MBL) 214 964) Guarantee under the Australian government Yes1 No
Slide 19: Ranking in a winding up
BCN Key Terms Ranking in a winding up For personal use only In a Winding Up of MBL, BCN will rank Ranking Illustrative examples ahead of MBL Ordinary Shares, equally with Liabilities in relation to protected accounts under the Banking Equal Ranking Obligations, but behind all Higher Act (including
Slide 20: Investment Risks
For personal use only Investment Risks 04 PAGE 20
Slide 21: ASIC Guidance
ASIC Guidance For personal use only Please consider ASIC Guidance before investing. www.moneysmart.gov.au/investing BCN are a complex investment and may be difficult to understand, even for experienced investors. You should ensure that you understand the BCN Terms and risks of investing in BCN and c
Slide 22: Investment risks
Investment risks For personal use only The following is a summary of key risks only. You should read Section 4 “Investment risks” of the Prospectus in full before deciding to invest • BCN are not deposit liabilities and are not protected accounts under the Banking Act - Investments in BCN are an inv
Slide 23: Investment risks continued
Investment risks continued For personal use only The following is a summary of key risks only. You should read Section 4 “Investment risks” of the Prospectus in full before deciding to invest • Impact of an Automatic Exchange Event – If an Automatic Exchange Event occurs, there are many ways in whic
Slide 24: Overview of Macquarie Group Limited
For personal use only Overview of Macquarie Group Limited 05 PAGE 24
Slide 25: Overview of FY14 result
Macquarie Group Limited Overview of FY14 result For personal use only Net profit $A1,265m, up $A414m (or 49%) on FY13 Operating income $A8.1b, up $A1.5b (or 22%) on FY13 As foreshadowed: — Macquarie’s annuity-style businesses (Macquarie Funds, Corporate and Asset Finance, and Banking and Finan
Slide 26: FY14 result
Macquarie Group FY14 result For personal use only 2H14 1H14 FY14 FY13 FY14 v $Am $Am $Am $Am FY13 Net operating income 4,453 3,679 8,132 6,657 22% Total operating expenses (3,157) (2,869) (6,026) (5,252) 15% Operating profit before income tax 1,296 810 2,106 1,405 50% Income tax expense (520) (307)
Slide 27: Financial performance
Financial performance For personal use only FY14 Operating income of $A8,132m FY14 Profit of $A1,265m $Am FY14 up 22% on FY13 $Am FY14 up 49% on FY13 5,000 2H14 up 21% on 1H14 1,000 2H14 up 52% on 1H14 750 4,000 500 3,000 250 2,000 0 1H12 2H12 1H13 2H13 1H14 2H14 1H12 2H12 1H13 2H13 1H14 2H14 FY14 E
Slide 28: Diversified by region
Diversified by region International income 68% of total income1 Total staff 13,913; International staff 53% of total For personal use only Europe, Middle East Asia Americas & Africa2 Income: $A1,574m (20% of total) Income: $A1,043m (13% of total) Income: $A2,709m (35% of total) Staff: 1,248 Staff: 3
Slide 29: Diversified income
Macquarie Group Limited Diversified income For personal use only 68% of operating income1 in FY14 was generated offshore FX movements estimated to have approx. 7% favourable impact on the FY14 result compared to FY13 Net operating income by region $Am 1,800 2H12 1,600 1H13 2H13 1,400 1H14 1,200
Slide 30: Strong funding and balance sheet position
Macquarie Group Limited Strong funding and balance sheet position For personal use only Diverse and stable funding base, minimal reliance on short term wholesale funding markets Surplus funding capacity continues to be deployed Retail deposits1 continuing to grow, up 7% to $A33.3b at Mar 14 fr
Slide 31: Funded balance sheet remains strong
Macquarie Group Limited Funded balance sheet remains strong For personal use only 100 $Ab 31 March 2013 $Ab 31 March 2014 $Ab 30 June 2014 100 100 ST wholesale issued paper 90 90 ST wholesale issued paper 90 (10%) ST wholesale issued paper (6%) (9%) Other debt maturing in the Cash, liquids and self
Slide 32: Conservative approach to capital and balance sheet management
Conservative approach to capital and balance sheet management remains unchanged For personal use only Despite the increase in regulatory initiatives, Macquarie’s established conservative approach to capital and balance sheet management has enabled it to absorb these additional regulatory requireme
Slide 33: Well diversified funding sources
Macquarie Group Limited Well diversified funding sources For personal use only MGL term funding (drawn and undrawn1) maturing Diversity of MGL funding sources beyond one year (including equity and hybrids) Wholesale issued paper 9% 25 Equity & Hybrids 13% Deposits - corporate and Equity and hybrids
Slide 34: Key Dates and Contacts
For personal use only Key Dates and Contacts 06 PAGE 34
Slide 35: Key Dates
Key Dates For personal use only KEY DATES FOR THE OFFER DATE Record date for determining Eligible Securityholders 7.00pm (Sydney time) Friday, 12 September 2014 Lodgement of the Prospectus with ASIC Monday, 15 September 2014 Bookbuild period Monday, 15 September 2014 to Friday, 19 September 2014 Ann
Slide 36: Key Contacts
Key Contacts For personal use only Issuer Macquarie Bank Limited Stuart Green, Group Treasurer Brad Milson, Division Director +61 2 8232 8845 +61 2 8232 7550 Sole Arranger Macquarie Capital (Australia) Limited Jacqui Vanzella Scott Favaloro +61 2 8232 4904 +61 3 9635 8072 Joint Lead Managers ANZ Sec
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