Macquarie Group, Ltd. · ASX:MQG
Macquarie — Credit Suisse 17th Asian Investment Conference (March 2014)
41 slides from Macquarie's conference presentation, Mar 24, 2014
Slide 1: Investor presentation and outlook update (ASX media release)
Macquarie Group Limited ABN 94 122 169 279 No.1 Martin Place Telephone (61 2) 8232 3333 Sydney NSW 2000 Facsimile (61 2) 8232 7780 GPO Box 4294 Internet http://www.macquarie.com.au Sydney NSW 1164 AUSTRALIA For personal use only ASX/Media Release Investor presentation and outlook update SYDNEY, 24 M
Slide 2: Credit Suisse 17th Asian Investment Conference
For personal use only Credit Suisse 17th Asian Investment Conference Conrad Hotel, Hong Kong Presentation to Investors and Analysts 26-27 March 2014 Patrick Upfold, Chief Financial Officer
Slide 3: Disclaimer
Disclaimer For personal use only This information has been prepared on a strictly confidential basis by Macquarie Group Limited ABN 94 122 169 279 (“Macquarie”) and may neither be reproduced in whole nor in part, nor may any of its contents be divulged, to any third party without the prior written c
Slide 4: Agenda
Agenda For personal use only 01. Overview 02. 3Q14 Update and Outlook 03. Appendix - 1H14 Financial Summary 04. Contacts PAGE 3
Slide 5: Overview
For personal use only 01 Overview Macquarie Group Limited Presentation to Investors and Analysts March 2014
Slide 6: About Macquarie
About Macquarie For personal use only Macquarie has built a uniquely diversified business since its inception in 1969. It is a global business built upon a range of products and sectors in which it has world-leading expertise • Global provider of banking, financial, advisory, investment and funds ma
Slide 7: Macquarie has a long history of profitability
Macquarie has a long history of profitability For personal use only 2.0 Hill Samuel UK opens branch 1.6 office in Sydney 1.2 Recession Currency 0.8 100 Crisis 0.4 Hills Motorway 0.0 Global real Mortgage 80 estate crash securitisation 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 Recession 6
Slide 8: About Macquarie: Macquarie Funds Group
About Macquarie Macquarie Funds Group For personal use only Top 50 global asset manager with $A430.7b1 of assets under management • Provides clients with access to a diverse Macquarie Funds Group range of capabilities and products, including: Macquarie Macquarie – Infrastructure and real asset Macqu
Slide 9: Assets under management of $A433 billion
Assets under management of $A433 billion1 For personal use only • AUM increased $A48b or 12% since 30 September 2013, primarily driven by favourable acquisitions, currency and market movements $Ab 450 400 350 300 250 200 150 100 50 0 Mar 10 Mar 11 Mar 12 Mar 13 Sep 13 Dec 13 Fixed income Direct infr
Slide 10: About Macquarie: Corporate and Asset Finance Group
About Macquarie For personal use only Corporate Asset and Finance Group $A25.9b1 of loans and assets under finance • Delivers tailored finance and asset management Lending Aircraft solutions to clients through the cycles Portfolio: $A9.2b Portfolio: $A3.6b • Specialists in corporate and real estate
Slide 11: About Macquarie: Banking and Financial Services Group
About Macquarie For personal use only Banking and Financial Services Group $A 32.9b1 retail on-balance sheet cash • 1.02 million customers, predominantly in Australia Insurance Deposits • Provides a diverse range of personal banking, wealth management and business banking Banking and products and se
Slide 12: About Macquarie: Macquarie Securities Group
About Macquarie For personal use only Macquarie Securities Group Innovative specialists leveraging Asia-Pacific insights to the world • Global institutional securities house with strong Equity capital Research Asia-Pacific foundations covering sales, research, markets ECM, execution and derivatives
Slide 13: About Macquarie: Macquarie Capital
About Macquarie For personal use only Macquarie Capital • Global corporate finance capability, including FINANCIAL INSTITUTIONS PRIVATE CAPITAL MARKETS M&A, debt and equity capital markets, and EQUITY CAPITAL MARKETS MERGERS & ACQUISITIONS PRINCIPAL INVESTMENTS DEBT CAPITAL MARKETS principal investm
Slide 14: About Macquarie: Fixed Income, Currencies and Commodities
About Macquarie For personal use only Fixed Income, Currencies and Commodities A portfolio of businesses across Commodity and Financial markets • Global fixed income, currencies and commodities provider of finance, risk solutions and market access to Metals and energy capital Energy markets producer
Slide 15: Long standing conservative risk management
Long standing conservative risk management For personal use only • Macquarie’s risk management principles have remained largely stable over 30 years and served the Group well over the past few years • The key aspects of Macquarie’s risk management approach are: Ownership of risk at the business Unde
Slide 16: 3Q14 Update and Outlook
For personal use only 02 3Q14 Update and Outlook Macquarie Group Limited Presentation to Investors and Analysts March 2014
Slide 17: 3Q14 Overview
3Q14 Overview For personal use only • Since our 1H14 result announcement, market conditions continued to show signs of improvement, however client activity remains subdued for some capital markets facing businesses • Macquarie’s annuity-style businesses (Macquarie Funds, Banking and Financial Servic
Slide 18: Short term outlook
Short term outlook For personal use only • Summarised below are the outlook statements for each Operating Group • FY14 results will vary with market conditions, particularly the capital markets facing businesses, some of which continue to experience subdued market conditions Net profit contribution
Slide 19: Short term outlook
Short term outlook For personal use only • Consistent with our previous statements to the market, while market volatility makes forecasting difficult, we continue to expect the FY14 net profit contribution1 from operating groups to be up on FY13 • Tax rate is currently expected to be broadly in line
Slide 20: 13,578 staff in over 28 countries
13,578 13 5781 staff t ff in i over 28 countries ti For personal use only Europe, Middle East Asia Americas & Africa2 Staff: 1,200 Staff: 3,408 Staff: 2,6643 Europe Asia Canada Amsterdam Bangkok Manila Calgary Dublin Beijing Mumbai Montreal USA Frankfurt Gurgaon Seoul Toronto Atlanta Los Angeles Gen
Slide 21: Funded balance sheet remains strong
Funded balance sheet remains strong For personal use only $Ab 31 March 2013 $Ab 30 September 2013 $Ab 31 December 2013 100 100 100 SYD Airports distribution (1%) SYD Airports investment (1%) 90 90 ST wholesale issued paper (9%) 90 ST wholesale issued ST wholesale issued paper (6%) Cash and liquid as
Slide 22: Basel III capital position
Basel III capital position For personal use only • APRA Basel III Group capital of $A12.7b, Group surplus of $A2.7b1 at Dec 13 • Strong Bank Group APRA Basel III CET1 ratio – Common Equity Tier 1: 9.7%; Tier 1: 10.8%2 • Dec 13 Group capital surplus figure includes the impact of the Jan 14 SYD distri
Slide 23: Medium term
Medium term For personal use only • Macquarie remains well positioned to deliver superior performance in the medium term • Deep expertise in major markets • Build on our strength in diversity and continue to adapt our portfolio mix to changing market conditions – Annuity-style income is provided by
Slide 24: Basel III capital and ROE by operating group
Approximate business Basel III Capital & ROE pre SYD distribution For personal use only 30 September 2013 1 APRA Basel III Capital Approx. 1H14 Return Operating Group @ 8.5% ($Ab) on Ordinary Equity2 Approx. 7-Year Average Annuity-style businesses 5.5 Return on Ordinary Equity2 Macquarie Funds Group
Slide 25: Appendix – 1H14 Financial Summary
For personal use only Appendix – 1H14 Financial Summary 03 Macquarie Group Limited Presentation to Investors and Analysts March 2014
Slide 26: 1H14 Result
1H14 Result For personal use only • Net profit of $A501m, up 39% on 1H13 and up 2% on 2H13 • Operating income $A3.7b, up 20% on 1H13 and up 2% on 2H13 • Macquarie’s annuity-style businesses (Macquarie Funds Group, Corporate and Asset Finance, and Banking and Financial Services) continued to perform
Slide 27: 1H14 Result
1H14 Result For personal use only Sep 13 v Sep 13 Mar 13 Sep 12 Sep 12 $Am $Am $Am Net operating income 20% 3,679 3,603 3,054 Total operating expenses 13% (2,869) (2,715) (2,537) Operating profit before income tax 57% 810 888 517 Income tax expense 97% (307) (377) (156) Profit attributable t
Slide 28: 1H14 Result: Financial performance
1H14 Result Financial performance For personal use only 1H14 Operating income of $A3,679m 1H14 Profit of $A501m 1H14 up 20% on 1H13 1H14 up 39% on 1H13 $Am $Am 4,000 600 400 3,000 200 2,000 0 2H11 1H12 2H12 1H13 2H13 1H14 2H11 1H12 2H12 1H13 2H13 1H14 1H14 EPS of $A1.50 1H14 DPS of $A1.00 $A 1H14 up
Slide 29: 1H14 Diversified by region
1H14 Diversified by region International income1 66% of total For personal use only Total staff 13,901; International staff 56% of total Europe, Middle East Asia Americas & Africa2 Income: $A741m (21% of total) Income: $A485m (13% of total) Income: $A1,162m (32% of total) Staff: 1,199 Staff: 3,280 S
Slide 30: 1H14 Diversified income
1H14 Diversified income For personal use only Net operating income by region • 66% of operating income1 in 1H14 is generated offshore • FX movements estimated to have ~5% favourable impact on the 1H14 result compared to both 1H13 and 2H13 $Am 1,600 1H12 2H12 1,400 1H13 1,200 2H13 1,000 1H14 800 600
Slide 31: Strong funding and balance sheet position
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 • Total deposits1 increased to $A38.0b at Sep 13 from $A36.2b at Mar 13 • $A7.9b of new term
Slide 32: Funded balance sheet remains strong
Funded balance sheet remains strong For personal use only $Ab 30 September 2012 $Ab 31 March 2013 $Ab 30 September 2013 100 100 100 90 90 90 ST wholesale issued paper ST wholesale issued paper (6%) ST wholesale issued paper (6%) (9%) Cash and liquid assets Other debt maturing in the next Other debt
Slide 33: Well diversified funding sources
Well diversified funding sources For personal use only 30 September 2013 MGL term funding (drawn and undrawn1) maturing Diversity of MGL funding sources beyond one year (including equity and hybrids) $Ab Wholesale issued 25 Equity & Hybrids paper Debt Loan capital Equity and hybrids 13.6% 9.5% Depos
Slide 34: Continued retail deposit growth
Continued retail deposit growth For personal use only • Macquarie has been successful in pursuing its strategy of diversifying its funding sources through growing its deposit base – In excess of 1 million retail clients, of which more than 681,000 are depositors – Focus on the composition and qualit
Slide 35: Bank Group Basel III Common Equity Tier 1 Ratio
Bank Group Basel III Common Equity Tier 1 (CET1) Ratio For personal use only • Strong Bank Group APRA Basel III CET1 ratio – Common Equity Tier 1: 9.8%; Tier 1: 10.9% • Basel III applies only to the Bank Group and not the Non-Bank Group Bank Group Common Equity Tier 1 (CET1) Ratio: Basel III (Sep 13
Slide 36: Basel III Leverage Ratio peer comparison
Basel III Leverage Ratio peer comparison For personal use only Basel III Tier 1 Leverage Ratio1 6.0% US Banks 5.5% Supplemental Leverage Ratio required for US Covered Bank Holding Companies 2 5.0% 4.5% 4.0% 3.5% Minimum Basel III Leverage Ratio 3.0% 2.5% 2.0% MBL Citi BAML 3 JP Morgan Morgan Standar
Slide 37: Loan portfolio growth – Funded Balance Sheet
Loan portfolio1 growth – Funded Balance Sheet For personal use only Sep 13 Mar 13 Sep 12 Category $Ab $Ab $Ab Mortgages: Australia 8.0 6.8 4.5 United States 0.5 0.7 0.7 Canada 6.1 6.7 7.8 Other 0.2 0.2 0.1 Total mortgages 14.8 14.4 13.1 Structured investments 4.3 3.6 3.4 Banking 4.5 4.0 3.8 Real Est
Slide 38: Equity investments of $A5.5b
Equity investments of $A5.5b1 For personal use only Carrying Carrying value2 value2 Category Sep 13 $Am Mar 13 $Am Description Macquarie Funds (MIRA) managed 1,218 1,158 Macquarie Infrastructure Company, Macquarie Atlas Roads, Macquarie Mexican REIT, funds Macquarie Korea Infrastructure Fund, Asian
Slide 39: Contacts
For personal use only 04 Contacts Macquarie Group Limited Presentation to Investors and Analysts March 2014
Slide 40: Contact Details
Contact Details For personal use only Patrick Upfold Karen Khadi Chief Financial Officer Head of Investor Relations Macquarie Group Limited Macquarie Group Limited Level 7, No.1 Martin Place Level 7, No.1 Martin Place Sydney NSW 2000 Sydney NSW 2000 Telephone: +612 8232 7724 Telephone: +612 8232 354
Slide 41: Macquarie Group Limited
For personal use only Macquarie Group Limited
Macquarie Group — Credit Suisse 17th Asian Investment Conference (March 2014) on 6ix