Slide 1: Presentation to investors and analysts
© macauarie Presentation to investors and analysts Result announcement for the half year ended 30 September 2024 1 November 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
| | im . a_i 3 Introduction Sam Dobson Head of Investor Relations
Slide 5: Overview of Result
= L \ Pw \as et | \ J O02 Overview of Result if Shemara Wikramanayake Managing Director and Chief Executive Officer om g I> armenia |
Slide 6: About Macquarie
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices About Macquarie Annuity-style activities | Net Profit Contribution ~53% Markets-facing activities | Net Profit Contribution ~47% BFS MAM CGM MacCap Banking and Financial Services Macquarie Asset Management Co
Slide 7: 1H25 result: $A1,612m up 14% on 1H24; down 23% on 2H24
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices 1H25 result: $A1,612m up 14% on 1H24; down 23% on 2H24 1H25 2H24 1H24 1H25 v 1H25 v $Am $Am $Am 1H24 2H24 Net operating income 8,216 8,977 7,910 á 4% â 8% Total operating expenses (5,919) (6,142) (5,919) – —
Slide 8: 1H25 net profit contribution from Operating Groups up 6% on 1H24
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices 1H25 net profit contribution from Operating Groups $A3,021m up 6% on 1H24 Annuity-style activities Markets-facing activities á 25% â 10% $A1,614m ON 1H24 $A1,407m ON 1H24 Non-Banking Group Macquarie Asset Man
Slide 9: 1H25 net profit contribution from Operating Groups down 22% on 2H24
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices 1H25 net profit contribution from Operating Groups $A3,021m down 22% on 2H24 Annuity-style activities Markets-facing activities â 6% â 34% $A1,614m ON 2H24 $A1,407m ON 2H24 Non-Banking Group Macquarie Asset M
Slide 10: Assets under management of $A916.8b
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Assets under management of $A916.8b 1 AUM decreased 2% from $A938.3b as at 31 Mar 24 Decrease due to unfavourable foreign exchange movements, outflows in equity strategies and divestments, partially offset by
Slide 11: Diversification by region
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Diversification by region 1 International income 65% of total income 2 Total staff 20,053 of which 52% international. A further ~254,000 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 65% of total income in 1H25 was generated offshore Total income $Am 4,000 3,000 2,000 1,000 — 2 Americas Europe, Middle East & Africa Asia Australia² 1H23 2H23 1H24 2H24 1H25 1. Ne
Slide 13: Macquarie Asset Management $A1,935m
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Macquarie Asset • MAM Continue to pursue organic and inorganic growth initiatives driven by long-term secular trends of demographics, urbanisation, energy Management transition and digitalisation • Continue t
Slide 14: Banking and Financial Services $A1,586m
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Banking and Personal Banking • 4 Home loan portfolio of $A129.9b, up 9% • Business Banking Business Banking loan portfolio of Wealth Management • Funds on platform of $A152.4b, up 7% on Financial Services on
Slide 15: Commodities and Global Markets $A2,894m
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Commodities and Asset Finance 8% • 1 Continued positive performance Commodity Markets 54% • 1 Decreased Commodities risk management income Financial Markets 38% Foreign exchange, interest rates and 1 Global M
Slide 16: Macquarie Capital $A1,145m
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Macquarie • Advising and investing in areas of deep expertise in sectors such as MacCap • 3 No. 1 in ANZ for M&A over the past decade Capital Infrastructure, Critical Minerals & Energy, Digital Infrastructure
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 24 30 Sep 24 $Ab $Ab 350 350 Commercial paper and certificates Commercial paper and certificates of deposit 12% 6 300 of 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 1H25 Key drivers 1H25 business capital requirement growth of $A1.2b excluding FX movements MAM $Ab • Net movements in fund co- 32.0 investments, underwrites and 0.8 divestments
Slide 20: Strong regulatory ratios
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Strong regulatory ratios Bank Group Level 2 Ratios (Sep 24) 250.0% 250.0% 8.0% 20.0% 2 17.6% 200.0% 200.0% 194% 16.0% 6.0% 5.7% 150.0% 150.0% 5.0% 12.0% 12.8% 110% 4.0% 100.0% 100.0% 110% 110% 8.0% 2.0% 50.0%
Slide 21: Interim dividend
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Interim dividend 1H25 Ordinary Dividend From $A2.60 á$A2.55 â $A3.85 From (35% franked) (40% franked) (40% franked) in 1H24 in 2H24 1H25 Record Date 2 Payout Ratio 12 Nov 24 DRP shares for 1H25 Dividend polic
Slide 22: Result Analysis and Financial Management
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 1H25 2H24 1H24 Net interest and trading income of $A4,129m, broadly in line with 1H24 • Decreased risk management income primarily in Global Gas, Power and Emissions and Global Oi
Slide 24: Macquarie Asset Management key drivers
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Macquarie Asset Management Key drivers • Higher Private Markets base fees due to Increase primarily driven by higher performance fees and fundraising and investments made by funds and mandates, partially offs
Slide 25: MAM AUM movement
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices MAM AUM movement Decrease due to unfavourable foreign exchange movements, outflows in equity strategies and divestments, partially offset by favourable market movements, increased fund investments and net ass
Slide 26: Banking and Financial Services key drivers
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Banking and Financial Services Key drivers • Lower Personal Banking income driven by margin compression, partially offset by 12% Growth in the loan portfolio and BFS deposits, together with growth in average
Slide 27: Banking and Financial Services
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Banking and Financial Services Growth in Home loans, BFS deposits, Funds on platform and Business Banking loans $Ab $Ab 160 153.1 152.4 18 16.6 142.7 141.8 15.8 140 16 129.9 129.4 123.1 119.3 118.6 14 13.0 12
Slide 28: Commodities and Global Markets key drivers
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Commodities and Global Markets Key drivers • Commodities down on 1H24 – Risk management income decreased on 1H24 Strong underlying client business, well-positioned for upside primarily in Global Gas, Power an
Slide 29: Strong underlying client business
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Strong underlying client business Consistent levels of income derived from Client numbers (excl. Asset Finance) underlying client business Operating Income (excl. credit and other impairment charges) Mar 21 M
Slide 30: Macquarie Capital key drivers
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Macquarie Capital Key drivers • Lower net income on the private credit portfolio primarily due to: Reflects lower investment-related income, partially offset by – Higher origination credit provisions due to h
Slide 31: Macquarie Capital
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Macquarie Capital 2 Movement in capital Private Credit sector exposures $Ab 7.0 1.3 6.0 6.0 7% (0.5) (0.2) 5.4 9% 5.0 35% Software and Tech Enabled Diversified 9% Financial and Insurance Services 4.0 Real Est
Slide 32: Cost of regulatory compliance and technology spend
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Cost of regulatory compliance and technology spend We continue to invest in regulatory compliance and technology. Total spend during 1H25 reflects progress on a number of initiatives to support regulatory cha
Slide 33: 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
Slide 34: Diversified issuance strategy
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Diversified issuance strategy Term funding as at 30 Sep 24 - diversified by currency, tenor and type 1 2 Currency Tenor Type 4.6 years WAM3 GBP 4% CHF 1% EUR 9% 1-2yrs 12% Equity and hybrids 32% Securitisatio
Slide 35: 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 1.9 million BFS clients, ~1.5 mill
Slide 36: 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 Sep 24 Mar 24 Group Category $Ab $Ab Description Home loans 131.0 120.4 Loans secured by mortgages over residential property Business banking 16.4
Slide 37: Equity investments of $A12.3b
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices 1 Equity investments of $A12.3b Carrying value Carrying value Category Sep 24 $Ab Mar 24 $Ab Description Includes investments in regional infrastructure and core Macquarie Asset Management Private 2.2 2.0 inf
Slide 38: Regulatory update
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Regulatory update Australia (Prudential) 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 10 Sep 24, APRA
Slide 39: Basel III Bank Group Common Equity Tier 1 (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: 12.8% 1 • Harmonised Basel III Level 2 CET1 ratio: 17.6% Bank Group Level 2 CET 1 Ratio 20.0% 4.8% 18.0% 16.0% 0.8%
Slide 40: Strong liquidity position maintained
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Strong liquidity position maintained 1,2 • 194% average LCR for Sep 24 quarter, based on daily observations – Well above regulatory minimum • Reflects longstanding conservative approach to liquidity managemen
Slide 41: Capital management update
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Capital management update On-market share buyback • On 3 Nov 23, Macquarie announced that it intends to buy back up to $A2b of ordinary shares on-market • As at 31 Oct 24, a total of $A1,013m of ordinary shar
Slide 42: Shemara Wikramanayake
Shemara Wikramanayake Managing Director and Chief Executive Officer
Slide 43: Short-term outlook
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Short-term outlook Factors impacting short-term outlook Annuity-style businesses Markets-facing businesses Non-Banking Group Macquarie Asset Management (MAM) Macquarie Capital (MacCap) • Base fees expected to
Slide 44: Short-term outlook
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Short-term outlook The range of factors that may influence our short-term outlook include: • Market conditions including: global economic conditions, inflation and interest rates, significant volatility event
Slide 45: Medium-term outlook
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Medium-term outlook Macquarie remains well-positioned to deliver superior performance in the medium term with its diverse business mix across annuity-style and markets-facing businesses Deep expertise across
Slide 46: Medium-term outlook
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Medium-term outlook Annuity-style businesses Markets-facing businesses Non-Banking Group Macquarie Asset Management (MAM) Macquarie Capital (MacCap) • Well-positioned to respond to current market conditions a
Slide 47: Approximate business Basel III Capital and ROE
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Approximate business Basel III Capital and ROE 30 Sep 24 APRA Basel III Capital 1H25 Return on Ordinary 18-year Average Return on Operating Group 1 2 @ 10.5% ($Ab) Equity Ordinary Equity Annuity-style busines
Slide 48: Presentation to investors and analysts
© macauarie Presentation to investors and analysts Result announcement for the half year ended 30 September 2024 1 November 2024
Slide 49: Appendix A: Detailed Result Commentary
= 4 , Appendix A Detailed Result Commentary
Slide 50: Macquarie Asset Management
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Macquarie Asset Management Result • Base fees of $A1,436m, broadly in line with 1H24 with offsetting impacts across MAM 1H25 2H24 1H24 – Base fees in Private Markets were higher due to fundraising and investm
Slide 51: 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 $A1,326m, down 3% on 1H24 1H25 2H24 1H24 – Margin compression, reflecting changes in portfolio mix and ongoing lending and $Am $Am $A
Slide 52: Commodities and Global Markets
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Commodities and Global Markets Result • Commodities income of $A1,406m, down 8% on 1H24: 1H25 2H24 1H24 – Risk management income down on 1H24 primarily in Global Gas, Power and $Am $Am $Am Emissions and Globa
Slide 53: Macquarie Capital
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Macquarie Capital Result • Net interest and trading income of $A322m, down 4% on 1H24 primarily due to higher 1H25 2H24 1H24 funding costs reflecting growth in the equity investment portfolio, partially offse
Slide 54: Corporate
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Corporate Result • Net interest and trading income of $A505m, up 11% on 1H24, driven by higher 1H25 2H24 1H24 earnings on capital, partially offset by higher funding costs associated with centrally $Am $Am $A
Slide 55: Additional Information: Funding
Additional Information Funding
Slide 56: 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 57: 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 58: Funding for Macquarie
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Funding for Macquarie Sep 24 Mar 24 Sep 23 • Well diversified funding sources $Ab $Ab $Ab • Term assets covered by term funding, stable deposits, hybrids Funding sources and equity Commercial paper and certif
Slide 59: Funding for the Bank Group
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Funding for the Bank Group Sep 24 Mar 24 Sep 23 • Bank balance sheet remains liquid and well capitalised, with a $Ab $Ab $Ab diverse range of funding sources Funding sources • Term funding beyond one year (ex
Slide 60: Funding for the Non-Bank Group
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Funding for the Non-Bank Group Sep 24 Mar 24 Sep 23 • Non-Bank Group is predominantly term funded $Ab $Ab $Ab • Term funding beyond one year (excluding equity and Funding sources securitisations) has a weight
Slide 61: 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 62: 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 63: Appendix C
c 2 c=) i — - 2 £ <j S 2 = 3 3 < Appendix C
Slide 64: 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 30 Sep 24 $Am Macquarie eligible capital Bank Group Gross Tier 1 capital 23,353 Non-Bank Group eligible capital 15,509 Eligible capita
Slide 65: 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 30 Sep 24 $Am $Am $Am Credit risk On balance sheet 62,580 6,571 Off balance she
Slide 66: 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 67: 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 30 Sep 24 $Ab $Am Weight Funded assets Cash and liquid assets 12.0 289 30% 1 Loan assets 22.5 2,113 117% Deb
Slide 68: Glossary
05 Glossary
Slide 69: 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 CMA Cash Management Account £ / GBP Pound Sterling COG Corporate Operations Group € / EUR Euro DCM Debt Ca
Slide 70: Glossary
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Glossary IT Information Technology MPA Mortgage Professional Australia LAC Loss-Absorbing Capacity MREP Macquarie Real Estate Partners LCR Liquefied Coverage Ratio No. Number LGD Loss Given Default NPAT Net P
Slide 71: Presentation to investors and analysts
© macauarie Presentation to investors and analysts Result announcement for the half year ended 30 September 2024 1 November 2024