Macquarie Group, Ltd. · ASX:MQG
Macquarie — Macquarie Bank — Debt Investor Presentation (February 2020)
36 slides from Macquarie's debt investor presentation, Feb 11, 2020
Slide 1: Capital Notes 2 Offer
Macquarie Bank For personal use only Capital Notes 2 Offer PAGE 1
Slide 2: Important notice and disclaimer
Important notice and disclaimer For personal use only This presentation is dated 11 February 2020 and has been prepared by Macquarie Bank Limited ABN 46 008 583 542 (“MBL”) in relation to its proposed offer of Macquarie Bank Capital Notes 2 (“BCN2”) as described in this presentation. A Prospectus1 i
Slide 3: ASIC Guidance
ASIC Guidance For personal use only Please consider ASIC Guidance before investing. www.moneysmart.gov.au/investing BCN2 are a complex investment and may be difficult to understand, even for experienced investors. You should ensure that you understand the BCN2 Terms and risks of investing in BCN2 an
Slide 4: Overview of the Macquarie Group
For personal use only Overview of the Macquarie Group 01 PAGE 4
Slide 5: Macquarie Overview
Macquarie Overview For personal use only Global diversified financial group providing clients with asset management and finance, banking, advisory and risk and capital solutions across debt, equity and commodities Macquarie Group overview1 Global presence2 ANNUITY-STYLE ~60% MARKETS-FACING ~40% EMEA
Slide 6: Years of profitability
50 years of profitability For personal use only 2.0 $Am Hill Samuel UK opens 1.6 branch office in Sydney 1.2 Currency Recession Crisis 0.8 0.4 - 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 Hills Motorway Global real Mortgage securitisation $Am 100 estate crash US banks capital London Rece
Slide 7: Macquarie funding structure
Macquarie funding structure For personal use only MGL and MBL are Macquarie’s two primary external funding vehicles which have separate and distinct funding, capital and liquidity management arrangements MBL provides funding to the Bank Group MGL provides funding predominately to the Non-Bank
Slide 8: MGL 1H20 result
MGL 1H20 result: $A1,457m up 11% on 1H19; down 13% on 2H19 For personal use only 1. Calculation of the effective tax rate is after adjusting for the impact of non-controlling interests. PAGE 8
Slide 9: MBL 1H20 result
MBL 1H20 result: $A992m up 35% on 1H19; down 23% on 2H19 For personal use only 1H20 2H19 1H19 1H20 v 1H20 v $Am $Am $Am 1H19 2H19 Net operating income 3,430 3,046 2,865 20% 13% Total operating expenses (2,108) (2,444) (1,988) 6% 14% Operating profit from continuing operations before 1,322 602 877 51
Slide 10: Diversification by region
Diversification by region For personal use only International income 69% of total income1 Total staff2 15,760; international staff 58% of total All information as at 30 Sep 2019. 1. Net operating income excluding earnings on capital and other corporate items. 2. Includes staff employed by certain op
Slide 11: Funded balance sheet remains strong
Funded balance sheet remains strong For personal use only Term liabilities exceed term assets 31 Dec 2018 30 Sep 2019 31 Dec 2019 $Ab $Ab $Ab 160 160 160 ST wholesale issued paper 8% 140 ST wholesale issued paper 11% 140 ST wholesale issued paper 6% 140 Other debt maturing in the Other debt maturing
Slide 12: Strong regulatory ratios
Strong regulatory ratios For personal use only Bank Group (Dec 19) 17.5% 7.5% 190.0% 115.0% 14.2% 5.9% 14.0% 6.0% 160.0% 110.0% 158% 109% 5.3% 10.5% 11.4% 4.5% 130.0% 105.0% 7.0% 3.0% 100.0% 100.0% 3.5% 1.5% 70.0% 95.0% 0.0% 0.0% 40.0% 90.0% CET1 ratio Leverage ratio LCR ² NSFR Bank Group (Harmonise
Slide 13: Regulatory Update
Regulatory Update For personal use only Australia APRA is currently undertaking regulatory reviews in a number of areas, including: —Finalisation of Basel III - APRA is still finalising rules for Australian banks to ensure that their capital levels can be considered ‘unquestionably strong’1 —In De
Slide 14: Regulatory Update continued
Regulatory Update For personal use only Australia continued In Jul 19, APRA released a draft prudential standard CPS 511 aimed at clarifying and strengthening remuneration requirements in APRA-regulated entities. A three-month consultation period closed 23 Oct 2019 during which Macquarie lodged it
Slide 15: Current credit ratings
Current credit ratings For personal use only Macquarie Bank Limited Macquarie Group Limited Long- Long-term Short- Long- Long- Short- term rating term term term term rating outlook rating rating rating rating outlook Moody’s A2 Stable P-1 A3 Stable P-2 Fitch A Stable F-1 A- Stable F-2 S&P A+ Stable
Slide 16: Outlook
For personal use only Outlook PAGE 16 02
Slide 17: Short term
Short term For personal use only While the impact of future market conditions makes forecasting difficult, we continue to expect the Group’s result for FY20 to be slightly down on FY19 Our short-term outlook remains subject to a range of factors including: — The completion rate of transactions a
Slide 18: Medium term
Medium term For personal use only Macquarie remains well-positioned to deliver superior performance in the medium term Deep expertise in major markets Build on our strength in business and geographic diversity and continue to adapt our portfolio mix to changing market conditions — Annuity-styl
Slide 19: Medium term
Medium term For personal use only Annuity-style businesses Markets-facing businesses Non-Banking Group Non-Banking Group Macquarie Asset Management (MAM) Macquarie Capital (MacCap) • Leading specialist global asset manager, well-placed to grow assets under • Positioned to benefit from any improvemen
Slide 20: Approximate business Basel III Capital and ROE
Approximate business Basel III Capital and ROE For personal use only As at 30 Sep 19 Note: Differences in totals due to rounding. 1. Operating Group capital allocations are based on 30 Jun 19 allocations adjusted for material movements over the Sep 19 quarter. 2. NPAT used in the calculation of appr
Slide 21: BCN2 Offer
For personal use only BCN2 Offer PAGE 21 03
Slide 22: Macquarie Bank Capital Notes Offer Overview
Macquarie Bank Capital Notes 2 Offer For personal use only Overview Issuer Macquarie Bank Limited (“MBL”) Fully paid, subordinated, non-cumulative, unsecured, mandatorily convertible, perpetual capital notes (“BCN2”), automatically convertible into Macquarie Group Limited (“MGL”) Ordinary Type o
Slide 23: BCN2 Key Terms: Distributions
BCN2 Key Terms For personal use only Distributions Distributions on BCN2 are discretionary, non-cumulative floating rate payments Distributions are scheduled to be paid in arrears commencing on 21 June 2020 and thereafter quarterly, subject to the Payment Conditions, until BCN2 are Exchanged, Di
Slide 24: BCN2 Key Terms: Mandatory Exchange
BCN2 Key Terms For personal use only Mandatory Exchange The Issuer must Exchange BCN2 into MGL Ordinary Shares on 21 December 2028 (if BCN2 have not been Redeemed, Exchanged or Written-Off beforehand) provided that certain Exchange Conditions are satisfied Mandatory Exchange The conditions to Ma
Slide 25: BCN2 Key Terms: Optional and Automatic Exchange
BCN2 Key Terms Optional Exchange and Exchange on an Automatic Exchange Event For personal use only or Acquisition Event MBL may choose to Exchange all or some BCN2 on 22 December 2025, 22 June 2026 or 21 December 2026 or if there has been a Tax Event or a Regulatory Event (subject Optional Exchang
Slide 26: BCN2 Key Terms: Summary of certain events
BCN2 Key Terms For personal use only Summary of certain events that may occur while BCN2 are on issue APRA Do approval conditions What value will a BCN2 holder In what form will the value be provided Event When could this occur? Consequences required? apply? receive (per BCN2)? to BCN2 Holders? Tax
Slide 27: Comparison between BCN2 and other Securities
BCN2 Key Terms For personal use only Comparison between BCN2 and other Securities Feature Term deposit MCN2, MCN3, MCN4 BCN BCN2 MGL Ordinary Shares Issuer Bank, credit union or MGL MBL MBL MGL building society (e.g. MBL) Eligible for protection under the Australian Yes1 No No No No government Finan
Slide 28: BCN2 Key Terms: Ranking in a winding up
BCN2 Key Terms For personal use only Ranking in a winding up In a Winding Up of MBL, BCN2 will rank ahead of MBL Ordinary Ranking Illustrative examples Shares, equally with Equal Ranking Obligations, but behind all Senior Creditors of MBL However, any return on BCN2 may be adversely affected or
Slide 29: Investment Risks
For personal use only Investment Risks 04 PAGE 29
Slide 30: Key Risks
Key Risks For personal use only Outlined below are some of the key risks associated with an investment in BCN2 There are risks associated with an investment in BCN2, many of which are outside the control of MGL. These risks include those in Section 1.3 and Section 5 of the Prospectus. Before app
Slide 31: Key Risks
Key Risks For personal use only Key risk Overview The Distribution Rate is calculated as the sum of the Reference Rate and the Margin (reduced where franking credits are attached) and is calculated for each Distribution Period Changes in Distribution rate The Reference Rate will fluctuate (both
Slide 32: Key Risks
Key Risks For personal use only Key risk Overview MBL may elect to Exchange, Redeem or arrange a Resale of all or some BCN2 in certain circumstances, subject to a number of conditions, including prior written approval from APRA when required under the BCN2 Terms MBL has rights for Exchange, Wher
Slide 33: Key Risks
Key Risks For personal use only Key risk Overview BCN2 are not deposit liabilities or protected accounts of MBL or MGL or any other member of the Macquarie Group and are not guaranteed or insured by any government, government agency or compensation scheme of Australia or any other jurisdiction or
Slide 34: Key Dates and Contacts
For personal use only Key Dates and Contacts 05 PAGE 34
Slide 35: Key Dates
Key Dates For personal use only KEY DATES FOR OFFER DATE KEY DATES FOR REINVESTMENT OFFER DATE Record date for Eligible Securityholders Friday, 7 February 2020 Record date for Eligible BCN Holders Friday, 7 February 2020 Lodgement of Prospectus Tuesday, 11 February 2020 Opening Date for Reinvestment
Slide 36: Key Contacts
Key Contacts For personal use only Issuer Macquarie Group Limited Stuart Green, Group Treasurer Brad Milson, Division Director +61 2 8232 8845 +61 2 8232 7550 Sole Arranger Macquarie Capital (Australia) Limited Georgina Lalor Mudit Jain +61 2 8232 6742 +61 3 9635 8118 Joint Lead Managers Tariq Holdi
Macquarie Bank — Debt Investor Presentation (February 2020) on 6ix