Macquarie Group, Ltd. · ASX:MQG
Macquarie — FY2019 Earnings Presentation
84 slides from Macquarie's earnings presentation, May 3, 2019
Slide 1: Presentation to investors and analysts
Presentation to investors and analysts For personal use only Result announcement for the full year ended 31 March 2019 3 May 2019
Slide 2: Disclaimer
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Disclaimer For personal use only The material in this presentation has been prepared by Macquarie Group Limited ABN 94 122 169 279 (MGL) and is general bac
Slide 3: Agenda
For personal use only Agenda 01 Introduction 02 Overview of Result 03 Result Analysis and Financial Management 04 Outlook 05 Appendices MACQUARIE 2019
Slide 4: Introduction
For personal use only 01 Introduction Sam Dobson Head of Investor Relations MACQUARIE 2019
Slide 5: Overview of Result
For personal use only 02 Overview of Result Shemara Wikramanayake Managing Director and Chief Executive Officer MACQUARIE 2019
Slide 6: About Macquarie
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices About Macquarie For personal use only Annuity-style businesses Markets-facing businesses Macquarie Asset Management (MAM) Commodities and Global Markets (C
Slide 7: 2H19 result: $A1,672m up 28% on 1H19
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices 2H19 result: $A1,672m up 28% on 1H19; up 28% on 2H18 For personal use only 2H19 1H19 2H19 v $Am $Am 1H19 Net operating income 6,924 5,830 19% Total operati
Slide 8: 2H19 net profit contribution from Operating Groups
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices 2H19 net profit contribution from Operating Groups $A3,544m up 36% on 1H19; up 48% on 2H18 For personal use only ANNUITY-STYLE BUSINESSES MARKETS-FACING BU
Slide 9: FY19 result: $A2,982m up 17% on FY18
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices FY19 result: $A2,982m up 17% on FY18 For personal use only 2H19 1H19 2H19 v FY19 FY18 FY19 v $Am $Am 1H19 $Am $Am FY18 Net operating income1 6,924 5,830 19
Slide 10: FY19 net profit contribution from Operating Groups
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices FY19 net profit contribution from Operating Groups $A6,145m up 21% on FY18 For personal use only ANNUITY-STYLE BUSINESSES MARKETS-FACING BUSINESSES $A3,287
Slide 11: Financial performance
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Financial performance For personal use only 11
Slide 12: Business Mix
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Business Mix For personal use only Annuity-style businesses represent approximately 53% of the Group’s performance1 Net Profit Contribution2 Annuity-style
Slide 13: Assets under management of $A551.3b
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Assets under management of $A551.3b For personal use only AUM increased 11% from $A496.7b at 31 March 2018 Increase due to investments made by MIRA-managed
Slide 14: Diversification by region
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Diversification by region For personal use only Asia International income 66% of total income1 Staff Total staff2 15,715, International staff 58% of total
Slide 15: Diversification by region
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Diversification by region For personal use only 66% of total income1 in FY19 was generated offshore A 10% movement2 in AUD is estimated to have approximate
Slide 16: Macquarie Asset Management
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Macquarie Asset Management For personal use only OPERATING INCOME MACQUARIE INFRASTRUCTURE MACQUARIE INVESTMENT $A2,844m 11 % AND REAL ASSETS (MIRA) • $A11
Slide 17: Corporate and Asset Finance
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Corporate and Asset Finance For personal use only OPERATING INCOME ASSET FINANCE PRINCIPAL FINANCE $A1,631m 8 % • Asset Finance portfolio of $A8.0b, up 2%
Slide 18: Banking and Financial Services
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Banking and Financial Services For personal use only OPERATING INCOME PERSONAL BANKING BUSINESS BANKING WEALTH MANAGEMENT $A2,103m 4 % • Australian mortgag
Slide 19: Commodities and Global Markets
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Commodities and Global Markets For personal use only OPERATING INCOME Commodity Markets Financial Markets Futures $A3,883m 34 % (Physical & Financial) 83%1
Slide 20: Macquarie Capital
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Macquarie Capital For personal use only OPERATING INCOME ADVISORY, CAPITAL RAISING AND BALANCE 53 INFRASTRUCTURE AND ENERGY INVESTMENTS % SHEET INVESTMENTS
Slide 21: Funded balance sheet remains strong
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Funded balance sheet remains strong For personal use only Term liabilities exceed term assets TOTAL CUSTOMER DEPOSITS9 $A56.0b FROM MAR 18 16% NEW TERM FUN
Slide 22: Basel III capital position
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Basel III capital position For personal use only • APRA Basel III Group capital at Mar 19 of $A21.8b, Group capital surplus of $A6.1b1,2 • APRA Basel III C
Slide 23: Business growth
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Business growth For personal use only Business capital requirements1 FY19 KEY DRIVERS Continuing business growth offset $A1.5b ~$A0.9b of investments ($A0.
Slide 24: Strong regulatory ratios
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Strong regulatory ratios For personal use only Bank Group (Mar 19) 2 1. ‘Harmonised’ Basel III estimates are calculated in accordance with the BCBS Basel I
Slide 25: Final dividend
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Final dividend For personal use only 2H19 ORDINARY DIVIDEND FROM FY19 ORDINARY DIVIDEND FROM $A 3.60 $A2.15 (45% franked) $A 5.75 $A5.25 (45% franked) (45%
Slide 26: Management changes
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Management changes For personal use only Commodities and Global Markets (CGM) • Effective 31 March 2019, Andrew Downe stepped down as Group Head of CGM and
Slide 27: Result Analysis and Financial Management
For personal use only 03 Result Analysis and Financial Management Alex Harvey Chief Financial Officer MACQUARIE 2019
Slide 28: Income statement key drivers
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Income statement key drivers For personal use only 2H19 1H19 FY19 FY18 • Net interest and trading income of $A4,551m, up 15% on FY18 $Am $Am $Am $Am – Incr
Slide 29: Operating expenses
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Operating expenses For personal use only Operating expenses excluding the impact of FX and AASB 15 are up 12% KEY DRIVERS • Following the adoption of AASB
Slide 30: Income statement by operating group
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Income statement by operating group For personal use only KEY DRIVERS • MAM: Increased base and performance fees along with reduced impairments, offset by
Slide 31: Macquarie Asset Management
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Macquarie Asset Management For personal use only Increased base fees, offset by higher operating expenses and lower combined performance fees and investmen
Slide 32: MAM AUM movement
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices MAM AUM movement For personal use only Increase of 11% due to FX impacts, contributions from businesses acquired during the current year and market movemen
Slide 33: MIRA EUM movement
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices MIRA EUM movement For personal use only Increase of 36% primarily due to new equity raised, the acquisition of GLL and the merger of Macquarie Capital’s gl
Slide 34: Corporate and Asset Finance
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Corporate and Asset Finance For personal use only Prior year included reduced credit and other impairment charges and higher Asset Finance investment-relat
Slide 35: Corporate and Asset Finance
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Corporate and Asset Finance For personal use only Asset Finance portfolio broadly in line with prior year $Ab 1 1. Primary driver of movement is from a loa
Slide 36: Corporate and Asset Finance
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Corporate and Asset Finance For personal use only Principal Finance movement in the portfolio Exposure by asset class $Ab Mortgages Corporate Real Estate I
Slide 37: Banking and Financial Services
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Banking and Financial Services For personal use only Strong volume growth in Lending, Deposits and Platforms KEY DRIVERS $Am • Higher Personal Banking inco
Slide 38: Banking and Financial Services
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Banking and Financial Services For personal use only Strong growth across the portfolio 1 Data based on spot volumes at period end. 1. Includes General Pla
Slide 39: Commodities and Global Markets
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Commodities and Global Markets For personal use only Results driven by strong performance in commodities KEY DRIVERS • Increased net interest and trading i
Slide 40: Commodities and Global Markets
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Commodities and Global Markets For personal use only Growing client base Client numbers 40
Slide 41: Macquarie Capital
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Macquarie Capital For personal use only Result driven by strong investment-related income and fee and commission income, partially offset by higher expense
Slide 42: Macquarie Capital: Movement in regulatory capital
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Macquarie Capital For personal use only Movement in regulatory capital 42
Slide 43: Costs of compliance
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Costs of compliance For personal use only FY19 FY18 • The finance industry continues to see an increase in regulatory Regulatory project spend $Am $Am init
Slide 44: Balance sheet highlights
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Balance sheet highlights For personal use only • Balance sheet remains solid and conservative – Term assets covered by term funding, stable deposits and eq
Slide 45: Diversified issuance strategy
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Diversified issuance strategy For personal use only Term funding as at 31 Mar 19 – diversified by currency1, tenor2 and type • Well diversified issuance an
Slide 46: Continued customer deposit growth
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Continued customer deposit growth For personal use only Macquarie has been successful in pursuing its strategy of diversifying its funding sources by growi
Slide 47: Loan and lease portfolios – funded balance sheet
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Loan and lease portfolios1 – funded balance sheet For personal use only Operating Mar 19 Mar 18 Group Category $Ab $Ab Description Asset Finance2 7.9 7.5 P
Slide 48: Equity investments of $A5.9b
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Equity investments of $A5.9b1 For personal use only Carrying value2 Carrying value2 Carrying value2 Mar 19 Sep 18 Mar 18 Category $Ab $Ab $Ab Description M
Slide 49: Regulatory update
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Regulatory update For personal use only Regulatory capital • APRA is currently undertaking regulatory reviews in a number of areas, including: – Finalisati
Slide 50: Regulatory update
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Regulatory update For personal use only • Macquarie Equities Limited - Fee for no service review and remediation program – Macquarie Equities Limited has c
Slide 51: Adoption of new accounting standards
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Adoption of new accounting standards For personal use only • AASB 9 Financial Instruments adopted on 1 April 2018 – Comparative financial statements have,
Slide 52: Bank Group Basel III
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Bank Group Basel III Common Equity Tier 1 (CET1) Ratio For personal use only • APRA Basel III CET1 ratio: 11.4%1 • Harmonised Basel III CET1 ratio: 14.3%2
Slide 53: Strong liquidity position maintained
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Strong liquidity position maintained For personal use only • 154% average LCR for Mar 19 quarter, based on daily observations – Maintained well above regul
Slide 54: Capital management update
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Capital management update For personal use only • Impact of changes to CAF business structure – As previously foreshadowed, the transfer of the CAF Princip
Slide 55: Outlook
For personal use only 04 Outlook Shemara Wikramanayake Managing Director and Chief Executive Officer MACQUARIE 2019
Slide 56: Factors impacting short-term outlook
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Factors impacting short-term outlook For personal use only Annuity-style businesses Markets-facing businesses Macquarie Asset Management (MAM) Commodities
Slide 57: Short-term outlook
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Short-term outlook For personal use only • The Group’s result for FY20 is currently expected to be slightly down on FY19 • Our short term outlook remains s
Slide 58: Medium-term
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Medium-term For personal use only • Macquarie remains well positioned to deliver superior performance in the medium-term • Deep expertise in major markets
Slide 59: Approximate business Basel III Capital and ROE
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Approximate business Basel III Capital and ROE For personal use only 31 Mar 19 1 APRA Basel III Capital Approx. FY19 Return Approx. 13-Year Average Operati
Slide 60: Medium-term
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Medium-term For personal use only Annuity-style businesses Markets-facing businesses Macquarie Asset Management (MAM) Commodities and Global Markets (CGM)
Slide 61: Presentation to investors and analysts
Presentation to investors and analysts For personal use only Result announcement for the year ended 31 March 2019 3 May 2019
Slide 62: Appendix: Detailed Result Commentary
For personal use only A Appendix Detailed Result Commentary MACQUARIE 2019
Slide 63: Macquarie Asset Management
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Macquarie Asset Management For personal use only Result FY19 FY18 • Base fees of $A1,738m, up on FY18 $Am $Am – Increased fees from investments made by MIR
Slide 64: Corporate and Asset Finance
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Corporate and Asset Finance For personal use only Result FY19 FY18 • Net interest and trading income of $A36m, down 88% on FY18 mainly as a result of lower
Slide 65: Banking and Financial Services
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Banking and Financial Services For personal use only Result FY19 FY18 • Net interest and trading income of $A1,678m, up 6% on FY18 $Am $Am – 7% growth in t
Slide 66: Commodities and Global Markets
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Commodities and Global Markets For personal use only Result FY19 FY18 • Commodities income of $A1,983m, significantly up on FY18 $Am $Am - Risk management
Slide 67: Macquarie Capital
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Macquarie Capital For personal use only Result FY19 FY18 • Increased fee and commission income: $Am $Am - M&A and other fee income: higher fee income acros
Slide 68: Appendix: Additional information - Funding
For personal use only B Appendix Additional information - Funding MACQUARIE 2019
Slide 69: Macquarie funding structure
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Macquarie funding structure For personal use only • MGL and MBL are Macquarie’s two primary external funding vehicles which have separate and distinct fund
Slide 70: Funded balance sheet reconciliation
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Funded balance sheet reconciliation For personal use only • Macquarie’s statement of financial position is prepared based on generally accepted accounting
Slide 71: Funding for Macquarie
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Funding for Macquarie For personal use only Mar 19 $Ab Mar 18 $Ab • Well diversified funding sources Funding sources • Minimal reliance on short-term whole
Slide 72: Funding for the Bank Group
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Funding for the Bank Group For personal use only Mar 19 Mar 18 • Bank balance sheet remains liquid and well capitalised, with a diverse $Ab $Ab range of fu
Slide 73: Funding for the Non-Bank Group
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Funding for the Non-Bank Group For personal use only Mar 19 Mar 18 • Non-Bank Group is predominantly term funded $Ab $Ab Funding sources • Term funding bey
Slide 74: Explanation of Funded Balance Sheet reconciling items
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Explanation of Funded Balance Sheet reconciling items For personal use only • Self-funded trading assets: Macquarie enters into stock borrowing and lending
Slide 75: Conservative long standing liquidity risk management framework
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Conservative long standing liquidity risk management framework For personal use only Liquidity Policy • The key requirement of MGL and MBL’s liquidity poli
Slide 76: Appendix: Additional information - Capital
For personal use only C Appendix Additional information - Capital MACQUARIE 2019
Slide 77: Macquarie Basel III regulatory capital
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Macquarie Basel III regulatory capital For personal use only Surplus calculation Harmonised APRA Basel III Basel III 31 Mar 19 $Am $Am Macquarie eligible c
Slide 78: Macquarie APRA Basel III regulatory capital
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Macquarie APRA Basel III regulatory capital For personal use only Bank Group contribution Risk-weighted assets Tier 1 Deductions Capital Requirement1,2 31
Slide 79: Macquarie regulatory capital: Non-Bank Group contribution
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Macquarie regulatory capital For personal use only Non-Bank Group contribution • APRA has specified a regulatory capital framework for Macquarie • A dollar
Slide 80: Macquarie regulatory capital: Non-Bank Group contribution
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Macquarie regulatory capital For personal use only Non-Bank Group contribution Capital Assets Requirement Equivalent 31 Mar 19 $Ab $Am Risk Weight Funded a
Slide 81: Appendix: Glossary
For personal use only D Appendix Glossary MACQUARIE 2019
Slide 82: Glossary
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Glossary For personal use only $A / AUD Australian Dollar CFM Commodities and Financial Markets $US / USD United States Dollar CGM Commodities and Global M
Slide 83: Glossary
Macquarie I FY19 result announcement I macquarie.com Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Glossary For personal use only GIFII Macquarie Global Infrastructure Fund 2 MIRA Macquarie Infrastructure and Real Assets GIG Green Investment Group MQA Ma
Slide 84: Presentation to investors and analysts
Presentation to investors and analysts For personal use only Result announcement for the year ended 31 March 2019 3 May 2019