Macquarie Group, Ltd. · ASX:MQG
Macquarie — Investor Presentation (February 2012)
102 slides from Macquarie's investor presentation, Feb 7, 2012
Slide 1: Operational Briefing – Presentation to Investors and Analysts
Macquarie Group Limited For personal use only Operational Briefing Presentation to Investors and Analysts 7 February 2012
Slide 2: Disclaimer
Disclaimer For personal use only Disclaimer The material in this presentation has been prepared by Macquarie Group Limited ABN 94 122 169 279 (Macquarie) and is general background information about Macquarie‟s activities current as at the date of this presentation. This information is given in summa
Slide 3: Agenda
Agenda For personal use only 10:05 – 10:10 Introduction 10:10 – 10:30 Update since the interim result – Nicholas Moore 10:30 – 10:55 Macquarie Securities Group – Stevan Vrcelj 10:55 – 11.20 Corporate and Asset Finance Group – Garry Farrell 11:20 – 11:35 Morning Tea 11:35 – 12:00 Banking and Financia
Slide 4: About Macquarie
About Macquarie For personal use only Top 50 global asset manager with $A314b1 of assets under management Provides clients with access to a diverse range of capabilities and products, including infrastructure and real Macquarie Funds asset management, securities investment management and structu
Slide 5: Update since the Interim Result Announcement
For personal use only Update since the Interim Result Announcement Nicholas Moore Managing Director and Chief Executive Officer Macquarie Group Limited Operational Briefing 7 February 2012 – Presentation to Investors and Analysts 5
Slide 6: Overview
Overview For personal use only Since our 1H12 result announcement, global economic uncertainty has deepened, with substantially lower levels of client activity in many markets, for example: CY11 v CY10 Dec 11 qtr v Sep 11 qtr Asia Australia Asia Australia Cash equities (value traded)1 Down 4% Down
Slide 7: Overview
Overview For personal use only In total, capital market facing businesses (MSG, Macquarie Capital and FICC) FY12 operating income1 is expected to be down approx. 25% on pcp, with FY12 net profit contribution1 expected to be down approx. 80% on pcp Dec 11 qtr included the receipt of the $A300m ca
Slide 8: Overview
Overview For personal use only Reported capital surplus at Dec 11 (APRA Basel II) remains unchanged from Sep 11 at $A3.5b Capital surplus measured under Harmonised Basel III expected to be approx. $A3.7b measured at 7%1 and $A2.7b measured at 8.5%2 (APRA 2016 requirement) at 31 Mar 12, $A0.9b3 m
Slide 9: Overview: Annuity-style businesses
Overview Annuity-style businesses For personal use only Operating Group Market positions Developments since 1H12 – Largest Australian-based asset manager, largest manager of infrastructure assets globally1 – Ranked first in the Infrastructure Investor magazine listing of the largest infrastructure i
Slide 10: Overview: Capital market facing businesses
Overview Capital market facing businesses For personal use only Operating Group Market positions Developments since 1H12 – No.2 Australian institutional investors 1, No.3 Asian – Exited institutional derivatives in the US, UK, Asia and institutional investors1, No.1 US institutional investors2 and S
Slide 11: Staff in over countries
14,6281 staff in over 28 countries For personal use only EUROPE, MIDDLE EAST ASIA AMERICAS & AFRICA2 Staff: 1,409 Staff: 2,959 Staff: 3,496 AUSTRALIA3 Staff: 6,764 1. Staff numbers as at 31 Dec 11. 2. Excludes staff in Macquarie First South joint venture and staff seconded to Macquarie Renaissance j
Slide 12: Funded balance sheet remains strong
Funded balance sheet remains strong For personal use only Macquarie Group Limited $Ab 31 March 2011 $Ab 30 September 2011 $Ab 31 December 2011 100 100 100 90 90 ST wholesale 90 issued paper (6%) ST wholesale ST wholesale issued paper (6%) Other debt1 maturing in issued paper (5%) the next 12 mths (9
Slide 13: Stable Basel III capital surplus
Stable Basel III capital surplus For personal use only Strong Harmonised Basel III Banking Group capital ratios expected at Mar 12 Common Equity Tier 1: 11.2%; Tier 1: 11.8% $Ab Group regulatory surplus1,5: Basel III pro-forma (Mar 12) 4.0 3.7 3.5 3.2 0.6 3.0 (0.1) (1.5) 2.5 2.0 (0.4) 1.8 2.0 1.5 2.
Slide 14: Short term outlook
Short term outlook For personal use only Summarised below are the outlook statements for each operating group, the FY12 results for which will continue to vary with market conditions Net profit contribution FY07- FY11 historical FY07-FY11 FY12 outlook as Update to FY12 Operating Group range averag
Slide 15: Outlook for 2H12
Outlook for 2H12 For personal use only Since our update on 28 October, Macquarie Securities and Macquarie Capital have continued to experience difficult trading conditions in many markets Accordingly, and as previously indicated, Macquarie‟s result for FY12 is expected to be lower than FY11. Bas
Slide 16: Medium term
Medium term For personal use only Macquarie is well positioned to deliver superior performance in the medium term Continue to adapt our portfolio mix to changing market conditions – Annuity-style income is provided by three significant businesses which are delivering superior returns following yea
Slide 17: Medium Term
Medium Term Approximate business Basel III ROE For personal use only Approx. Basel III Equity Approx. 5 Year Average Group Annualised 1H12 Return $Ab FY07 – FY11 on Equity1 Annuity-style businesses (excluding legacy) Approx. Return on Equity1 Macquarie Funds Group 1.5 Corporate and Asset Finance 1.6
Slide 18: Macquarie Securities Group
For personal use only Macquarie Securities Group Stevan Vrcelj Group Head Macquarie Group Limited Operational Briefing 7 February 2012 – Presentation to Investors and Analysts 18
Slide 19: Macquarie Securities Group
Macquarie Securities Group For personal use only 1. Current challenges in global equities markets 2. Implications of challenges for MSG FY12 result 3. Our response to current market conditions 4. Looking beyond current market challenges 19
Slide 20: Update on market conditions: Equity
Update on market conditions Equity For personal use only $Ab ASX200 – value $HKb Hang Seng – value 500 2,200 450 2,000 400 5yr quarterly average: $A326b 350 1,800 5yr quarterly average: $HK1.7tr 300 250 1,600 200 1,400 150 100 1,200 50 - 1,000 4Q10 1Q11 2Q11 3Q11 4Q11 4Q10 1Q11 2Q11 3Q11 4Q11 No. of
Slide 21: Update on market conditions: ECM
Update on market conditions ECM For personal use only Australian IPOs and secondary issues Asia (ex Japan) IPOs and secondary issues $USb $USb Secondary Offering IPO 5yr average Secondary Offering IPO 5yr average 60 350 50 300 250 40 200 30 150 20 100 10 50 0 0 CY07 CY08 CY09 CY10 CY11 CY07 CY08 CY0
Slide 22: Update on market conditions: Derivatives
Update on market conditions Derivatives For personal use only VIX volatility index1 Equity inflows2 pts $USb Index 55 60 1,800 Net cash flow into long term stock US mutual funds (3m average) LHS 50 50 S&P 500 (RHS) 45 1,600 40 40 30 1,400 35 20 30 10 1,200 25 0 20 1,000 -10 15 -20 10 800 5 -30 0 -40
Slide 23: Response to current market conditions
Macquarie Securities Group Response to current market conditions For personal use only To meet current market challenges we are: – Reviewing our portfolio and exiting some businesses – Reducing costs – Optimising how we use capital and funding – Focussing on key strengths and markets 23
Slide 24: Derivatives
Macquarie Securities Group For personal use only Derivatives 24
Slide 25: Derivatives: FY12 update
Derivatives FY12 update For personal use only Derivatives business impacted by cyclical factors and structural change Macroeconomic conditions deteriorated markedly in 2H12 as the European sovereign debt crisis deepened – Significant decrease in client volumes as demand fell globally for equity
Slide 26: Derivatives: Review of business mix
Derivatives Review of business mix For personal use only Exited institutional derivatives, index synthetics Exited listed public derivatives and considering closing Structured Products & Exotics in Germany Exited US Exited Asia corporate derivatives derivatives Exited Asia institutional de
Slide 27: Cash and ECM
Macquarie Securities Group For personal use only Cash and ECM 27
Slide 28: Cash and ECM: FY12 update
Cash and ECM FY12 update For personal use only Cash and ECM impacted by cyclical factors – Low institutional client volumes in Dec 11 qtr reflected investor uncertainty regarding economic outlook – ECM markets, particularly in Asia and Australia, were extremely subdued in the Dec 11 qtr following
Slide 29: Cash and ECM: Review of business mix
Cash and ECM Review of business mix For personal use only Centralised Cash in London / Frankfurt Focus research on specialty areas Focus research on Scaled Japan Cash specialty areas Scaled Australia Cash 29
Slide 30: Going Forward
Macquarie Securities Group For personal use only Going Forward 30
Slide 31: Going forward: Derivatives
Going forward Derivatives For personal use only Derivatives is focusing on core offerings in key global markets where we have a history of profitability Warrants – No.1 market share in Korea1 and Singapore2 – No.3 in Hong Kong3 and No.3 in Australia4 – Minis launched in Aug 11 in Australia, captur
Slide 32: Going forward: Derivatives
Going forward Derivatives For personal use only Asian and Australian equity finance capability – facilitates client activity – Full-service synthetic prime broker supporting hedge fund clients of the cash business requiring leverage, stock borrow and market access – Provision of swap and other cap
Slide 33: Going forward: Derivatives by region
Going forward Derivatives For personal use only UK / EUROPE ASIA Arbitrage Trading Warrants No.1 Warrants market share in NORTH AMERICA Korea1, Singapore2 Arbitrage Trading No.3 Warrants market share in Hong Kong3 ADR/GDR No.1 Ranked broker in Indian GDRs5 No.2 Ranked broker in Asian closed
Slide 34: Going forward: Cash equities
Going forward Cash equities For personal use only Cash equities – Account management – Deliver product and service excellence – Research and Sales – Leveraging efficient and high quality execution capability – Global distribution platform for capital raisings – Corporate access Asia-Pacific spec
Slide 35: Global securities platform
Going forward Global securities platform For personal use only Over 2,250 stocks under coverage, No.9 globally1 11th largest revenue firm globally NORTH AMERICA ASIA 57 analysts 96 analysts 710 stocks covered 893 stocks covered 57% market capitalisation 52% market capitalisation UK /
Slide 36: Global coverage
Going forward Global coverage For personal use only One of the leading distribution platforms Trading capability in 50 countries and 113 exchange platforms 230+ equity research analysts covering over 2,250 stocks 300+ sales staff covering more than 3,000+ institutional clients Highly rated cap
Slide 37: Strength in research coverage
Going forward Strength in research coverage For personal use only Macquarie – No.5 Research Coverage in Asia-Pacific (ex Japan, Australia) 1,200 1,000 800 600 400 200 0 HAITONG UBS CITIC GOLDMAN 6 7 8 9 10 SECURITIES SACHS Macquarie Cash Equities is No.9 in Terms of Global Research Coverage 4,500 4,
Slide 38: Deep expertise across key global sectors
Going forward Deep expertise across key global sectors For personal use only High quality, fundamental, institutionally focused Globally coordinated Deep industry expertise Utilities & Financial Technology, Media & Quantitative Oil & Gas Industrials Infrastructure Services Real Estate Telecomm
Slide 39: Global distribution and execution capabilities
Going forward Global distribution and execution capabilities For personal use only Overview of Global Distribution Platform Bloomberg Broker Rankings 2010 North America EMEA Asia Pacific 120 sales professionals 51 sales professionals 136 sales professionals Asia – Best Broker by Region (Basis Points
Slide 40: Corporate Access
Going forward Corporate Access For personal use only 2011 Statistics Corporate Meetings 74 conferences Non-deal roadshows Client Roadshows Conferences & Corp Days 1,600 non deal 50,000 Roadshows 45,000 740 client Roadshows 40,000 Arranged close to 35,000 Number of Meetings 47,000 corporate 3
Slide 41: ECM - How are we positioned
Going forward ECM - How are we positioned For personal use only Asian ECM business focussed on Hong Kong / China and in particular IPOs Full-service coverage in Australia Natural resources focussed business in Canada – the leading capital market globally for natural resources Growing presenc
Slide 42: ECM - How are we positioned
Going forward ECM - How are we positioned For personal use only Thomson Reuters 2011 Rankings No.2 (up from No.7 in 2010) No.15 (up from No.36 in 2010) Australia Equity & Equity Related US Equity & Equity Related No.18 (from no previous ranking) Lead Manager on US top issue of 2011 US IPOs Australia
Slide 43: In summary
In summary For personal use only Combination of cyclical and structural factors are impacting global equity markets. We have implemented actions to address structural factors and manage cyclical impacts Clear strategy going forward – Cash Equities consolidation of existing investments – Derivati
Slide 44: Corporate and Asset Finance Group
For personal use only Corporate and Asset Finance Group Garry Farrell Group Head Macquarie Group Limited Operational Briefing 7 February 2012 – Presentation to Investors and Analysts 44
Slide 45: CAF at a glance
CAF at a glance For personal use only Providing tailored finance and asset management solutions to clients across specialised assets through the cycles 45
Slide 46: CAF's strategic focus
CAF‟s strategic focus For personal use only Sizeable markets Stable earnings Deep markets present niche Annuity-style income streams opportunities for growth Leases typically not prepayable Building scalable platforms Some loans not prepayable Organic and selective acquisitive growth CAF
Slide 47: CAF: Key changes since 2010
CAF: Key changes since 2010 For personal use only Lending Diversified by geography and industry Industries: TMET, Real Estate, Financials, Industrials, Transport Infrastructure and Leasing Aircraft: consolidated within CAF April 11 post Locations: London, New York, Chicago, Sydney, acquisiti
Slide 48: Ability to adapt to changing market conditions
Ability to adapt to changing market conditions For personal use only Selective focus on accretive acquisitions resulting in significant profit growth 2006 2007 2008 2009 2010 2011 2012 Future opportunities Lending New markets & products Various Lending portfolios Engines divestment Transport Bolt-on
Slide 49: Track record of growth
Track record of growth For personal use only Track record of growing profitably in cyclical markets ~53% since Dec 09 Established hubs ~45% Consistent origination and growth with functionality and support Growth on 1H11 Assets ($Ab) Headcount Headcount NetNPBT ($Am) 1 ($Am) profit contribution 1. Op
Slide 50: CAF's diversified portfolio
CAF‟s diversified portfolio For personal use only Portfolio of $A21.1b Diversified by geography, assets, industries, product types, exposure and clients By geography Headcount By assets NPBT ($Am) By funding source External Americas Asia- Transport Loans 31% 18% Pacif ic 20% 40% 47% Meters 3% Auto E
Slide 51: External funding programs
External funding programs For personal use only Diversification of external funding, including non recourse debt, warehouses and securitisation Securitisation programs SMART ISSUANCE Continued access to securitisation market through the cycle - reduced reliance on MBL funding Highly attractive col
Slide 52: Maintain strong credit and asset discipline
Maintain strong credit and asset discipline For personal use only Write offs Strong credit discipline % of book 0.80% Low levels of historical credit losses relative to Leasing1 Lending growth and despite market conditions 0.60% High level of Risk Management Group oversight and reporting across CA
Slide 53: Lending
Lending For personal use only Business and strategy Risk management framework Loan portfolio originated through primary Focus on ensuring return for each loan and secondary channels via dedicated adequately covers risk and we recover our teams principal in the face of highly stressed Focus on
Slide 54: Lending: Total portfolio
Lending Total portfolio For personal use only Total portfolio of $A8.5b Contractual run off by industry Portfolio Australia 29% By Americas geography 31% Europe 40% Junior Senior 8% unsecured 7% By seniority Senior secured 85% 1. Data at 31 Dec 11. 54
Slide 55: Transport
Transport For personal use only Business and Strategy Market Leading lessor of commercial aircraft Aircraft worldwide with 134 aircraft on lease to 67 Aircraft leasing yields remain satisfactory, but airlines in 42 countries effect of economic uncertainty on industry Predominantly current and
Slide 56: Motor Vehicles
Motor Vehicles For personal use only Extending finance through the customer value chain Business and Strategy Market Leading provider of auto finance in Australia Competitive market with domestic banks, Indirect and direct origination of auto leases / original equipment manufacturer (OEM) loan
Slide 57: Equipment Finance
Equipment Finance For personal use only Extending finance through the customer value chain Business and Strategy Market Combined Equipment Finance and Volumes still recovering in most regions as Manufacturing Finance into single global customers slow purchases due to economic business unit - Mac
Slide 58: Case study: Meters acquisition
Maximising market opportunities Case study: Meters acquisition For personal use only Adjacency Build Opportunity 2003 2003 – 2011 October 2011 2003: Market entry through 2006: Entered smart meter market Transformational acquisition Capital Meters Limited - 2010: Bought-out minority Acquire
Slide 59: Case study: Rail acquisition
Adapting to market conditions Case study: Rail acquisition For personal use only Doubled CAF’s rail portfolio Transport’s railcar business Acquired portfolio Operating in North America since 2005 Leases diverse range of freight railcars Portfolio acquisition of North American rail freight cars
Slide 60: Operational efficiency initiatives
Operational efficiency initiatives For personal use only Cost management and returns focused Platform efficiencies Combine platforms: Equipment Finance and Cost / income ratio Manufacturing Finance combined into single global business unit with multiple sales teams and shared platforms to 48% redu
Slide 61: In summary
In summary For personal use only Providing tailored finance and asset management solutions to clients across specialised assets through the cycles Niche positions in deep, Origination through Strong credit and attractive markets the cycles asset discipline Strong funder Successfully Cost management
Slide 62: Banking and Financial Services Group
For personal use only Banking and Financial Services Group Peter Maher Group Head Macquarie Group Limited Operational Briefing 7 February 2012 – Presentation to Investors and Analysts 62
Slide 63: Banking and Financial Services (BFS)
Banking and Financial Services (BFS) For personal use only BFS offers integrated banking and wealth management solutions to target client segments and markets1 Australia / NZ focus International focus Macquarie Macquarie Macquarie Macquarie Adviser Relationship Global BFS Private Wealth North Americ
Slide 64: BFS core products
BFS core products For personal use only Full-service Relationship Wrap Cash broking banking Mortgages Holdings FUA $A20.9b Total retail and Macquarie Private Strong growth in Australian business deposits Wealth remains deposits to $A5.9b mortgage portfolio of $A30.7b No.1 retail $A10.6b down full-se
Slide 65: Banking and Financial Services
Banking and Financial Services For personal use only BFS has delivered earnings stability and significant funding to Macquarie Consistent profits through the GFC $A29.4b retail on-balance sheet cash $Am Net profit contribution1 $Ab On-balance sheet cash 160 35 137 141 137 140 134 29.4 124 30 CMT t
Slide 66: Our assets under advice/administration/management
Our assets under advice/administration/management For personal use only Changes to BFS clients’ investment mix across equities, funds, and cash has limited impact on AUA - providing earnings stability FUM/AUM/AUA (Annuity & Trading) CAGR $Ab 140 122 120 122 115 7% 120 30 105 26 26 100 96 22 2% 23
Slide 67: Our clients and advisers
Our clients and advisers For personal use only BFS has 1.1m predominantly high net worth clients serviced by a network of 610 Macquarie client advisers No. of clients Macquarie Private Wealth adviser No.s millions Blackmont Capital 1.2 purchased 31 Dec 09 700 1.12 1.05 1.00 1.0 0.95 600 0.90 588 6
Slide 68: BFS market growth
BFS market growth For personal use only BFS business mix is different to Big 4 Australian Retail BFS Retail FS Market Size FS Market Size 2011 2011 Retail Broking Forecast (Trading Value)1 100% 10% 100% 2008-11 2012-14 change in 24% Market CAGR CAGR growth Retail Funds Management 23% (FUM)2 Retail B
Slide 69: Regulatory Change
Regulatory Change For personal use only BFS has co-ordinated all resources to comply with pending regulatory changes and is well positioned to respond to new business opportunities TAS regime FOFA/Ripoll reforms AML & FAA (NZ) Re-vamped ASIC ASX Increased market size margining on equity (Compuls
Slide 70: Service – A key differentiator for BFS
Service – A key differentiator for BFS For personal use only Innovation and service are critical investment priorities for BFS Macquarie Professional Series Awarded fourth consecutive S&P Fund Manager of the Year award for Global Equities Developed Markets category for the Independent Franchise Pa
Slide 71: Strategic Themes
Strategic Themes For personal use only 1. Growth 2. Efficiency 3. Capital Management 71
Slide 72: 1. Growth
1. Growth For personal use only Investing today for future growth remains a priority for BFS Key initiatives include: MPW Canada (Blackmont Capital) – adviser / FuM growth Wrap – Perpetual white-label agreement Virtual Adviser Network (VAN) – aggregation of non-aligned IFAs Macquarie Mortgages Austr
Slide 73: Growth – MPW Canada
Growth – MPW Canada For personal use only MPW Canada (Blackmont Capital) was acquired on 31 Dec 09 establishing BFS as the one of the leading independent retail brokers in the Canadian market MPW Canada 31 Dec 09 31 Dec 11 Change Adviser Numbers 135 204 51% Client Numbers („000) 441 66 50% Assets un
Slide 74: Growth – Wrap
Growth – Wrap For personal use only Macquarie Wrap remains the dominant non-aligned Independent Financial Adviser (IFA) platform as demonstrated by the recent Perpetual agreement Perpetual Agreement Australia‟s largest platform outsourcing deal, highlighting BFS‟ strong capability, functionality a
Slide 75: Growth – Virtual Adviser Network (VAN)
Growth – Virtual Adviser Network (VAN) For personal use only BFS launched Macquarie VAN offering boutique IFA practices an alternate business model to support growth and capitalise on FoFA changes What does VAN offer? Environment to best execute an IFA‟s strategic roadmap: Support from technical e
Slide 76: 2. Efficiency
2. Efficiency For personal use only Expense reduction of $A70m (1H12 compared to 2H11) Expense reductions included: Consolidated Online Trading – Macquarie Prime Call Centre optimisation – efficiency across call centres Process re-engineering – cash, mortgages, and lending processes Outsourc
Slide 77: 3. Capital Management
3. Capital Management For personal use only We continuously review capital returns, particularly regulatory capital, and pursue alternative portfolio mix to improve returns Recent initiatives include: OzForex – partial equity sell down from 51% to 19.9% in 2010 UK Wrap – closed Mar 11 Macquari
Slide 78: Summary
Summary For personal use only BFS continues to provide earnings stability and funding to MQG BFS has the appropriate business mix for either volatile or growing markets We are well positioned to capitalise on regulatory change BFS key focus is growth, efficiency and capital management Our differenti
Slide 79: Operational Efficiencies
For personal use only Operational Efficiencies Greg Ward, Deputy Managing Director Macquarie Group Limited Operational Briefing 7 February 2012 – Presentation to Investors and Analysts 79
Slide 80: Key messages
Key messages For personal use only Cost management programme continues to deliver cost reduction efficiencies across groups Shared services achieving scale efficiencies and lowering support costs. Initiatives expected to generate savings of approx. 15% by end FY13 as compared to FY11 Continuing to f
Slide 81: Cost Performance
Cost Performance Recap of 1st half performance For personal use only 1H12 operating costs $A2.8b, down $A0.4b on 2H11 – Achieved through a range of initiatives including exiting unprofitable businesses, creating scalable platforms, reducing complexity, redesigning business and operating models and
Slide 82: Cost Performance Drivers
Cost Performance Drivers Recap of 1st half drivers For personal use only Investment in growth areas 1H12 Cost saving initiatives 1H12 New businesses - Macquarie Distribution Finance, Exiting engine leasing business CAF Global Mining Equipment, Wholesale Floorplan $A9m Global lease platform rol
Slide 83: Staffing
Staffing Responding to current markets and opportunities For personal use only MGL Headcount 15,700 15,500 8% 6% 5% 15,300 10% 15,100 6% 3% 51% 14,900 14,700 8% 14,500 31-Mar-11 Corporate and Macquarie Funds Banking and Macquarie Macquarie Capital Fixed Income, Real Estate Total services 31-
Slide 84: Focussing on capital market facing businesses
Focussing on capital market facing businesses Case Study: Macquarie Securities and Macquarie Capital For personal use only MSG and Macquarie Capital expected to reduce FY11 run rate costs by 20-25% by end FY13 Macquarie Securities Macquarie Capital Sizing teams based on targeted areas 70% of s
Slide 85: Consolidating functions to leverage scale
Consolidating functions to leverage scale Case Study: Creation of single Capital Markets Operations & Technology team For personal use only As part of our program to create a single market operations and technology function to improve efficiency and reduce costs, the operations and technology area
Slide 86: Consolidating functions to leverage scale
Consolidating functions to leverage scale Delivering savings through centralising of support For personal use only Support teams previously located within Operating Groups have been centralised Governance also centralised to ensure greater enterprise-wide collaboration and delivery of shared ser
Slide 87: International support functions
International support functions Increasing the use of international locations to support our global businesses For personal use only Now over 1,000 staff located in regional service hubs, supporting Macquarie‟s global operations This represents approx. 20% of Finance, Technology, HR and Business
Slide 88: Capital Management
[x] For personal use only Capital Management Patrick Upfold, Chief Financial Officer and Group Treasurer Macquarie Group Limited Operational Briefing 7 February 2012 – Presentation to Investors and Analysts 88
Slide 89: Capital update
Capital update For personal use only As advised in the 1H12 results presentation – Although APRA has not finalised its interpretation of the Basel III rules, it is our assessment that Macquarie Group has sufficient capital today to meet the Basel III capital rules as applied by APRA as at 1 Jan 13
Slide 90: Basel III surplus to increase as a result of Capital Actions
Basel III surplus to increase as a result of Capital Actions For personal use only $Ab Group regulatory surplus1: Basel III pro forma (Mar 12) 5.0 4.9 4.5 4.0 3.7 3.5 3.2 0.6 Harmonised Basel III surplus 3.0 (0.1) 0.5 3.3 (1.5) 2.5 2.7 0.8 APRA Basel III surplus 1.8 2.5 2.0 (0.4) 0.2 2.0 1.5 Using m
Slide 91: Pro-forma Basel III CET1 Ratio
Pro-forma Basel III CET1 Ratio For personal use only Strong Banking Group Harmonised Basel III capital ratios1 - Common Equity Tier 1: 11.2%; Tier 1: 11.8% MBL Common Equity Tier 1 (CET1) ratio: Basel III pro-forma (Mar 12) 14% 13.2% Group capital surplus 11.2% 12% Harmonised Basel III 11.9% 9.8% 11
Slide 92: Update on Capital Actions
Update on Capital Actions For personal use only Areas of focus Basel III capital: Ongoing review of each Operating Group to quantify the impact of Basel III on capital requirements Capital charging: Placing a price on capital used by Operating Groups Business returns: All transactions now eval
Slide 93: Examples of capital actions
Examples of capital actions1 For personal use only Return of excess capital currently held in fund management subsidiaries where currently over capitalised Macquarie Funds Netting of cash collateral to reduce exposures in respect of retail structured investment products Corporate and Asset Exi
Slide 94: Update on Hybrid issuance
Update on Hybrid issuance For personal use only $A2.2b of hybrid capacity at the Group level post Capital Actions A$b Projected Group hybrid capacity post capital actions1 2.5 Macquarie plans to undertake hybrid capital 2.0 issuance in order to 0.7 – Improve capital structure efficiency under Base
Slide 95: Regulatory Update
Regulatory Update For personal use only Basel III Capital – APRA provided a draft interpretation of Basel III rules in Sep 11 – Written submission provided to APRA in Dec 11 commenting on draft rules – Although draft, based on discussion with APRA there is now a high degree of clarity on how the r
Slide 96: Liquidity ratios
Liquidity ratios For personal use only APRA released discussion paper and draft liquidity standard in Nov 11 Basel III Proposals are broadly consistent with the Basel III rules text requirements RBA released details of the Committed Liquidity Facility (CLF) Macquarie expects to meet both LCR
Slide 97: For personal use only
For personal use only 97
Slide 98: Appendix: Glossary
For personal use only Appendix Glossary Macquarie Group Limited Operational Briefing 7 February 2012 – Presentation to Investors and Analysts 98
Slide 99: Glossary
Glossary For personal use only ~ Approximately bps Basis Points < Less Than CAF Corporate and Asset Finance € Euro CAGR Compound Annual Growth Rate $A Australian Dollar CCB Capital Conservation Buffer $C Canadian Dollar CET1 Common Equity Tier 1 $HK Hong Kong Dollar CEX Corporate Executive Group $US
Slide 100: Glossary
Glossary For personal use only ECM Equity Capital Markets G10 Group of Ten Industrialised Nations EMEA Europe, the Middle East and Africa GATX General American Transportation Corporation EPS Earnings Per Share GBP Great Britain Pound ETF Exchange-Traded Fund GDR Global Depository Receipt EU European
Slide 101: Glossary
Glossary For personal use only MEF Macquarie Equipment Finance PPP Public Private Partnership MFG Macquarie Funds Group pts Points MGL Macquarie Group Limited qtr Quarter MOD Market Operations Division RBA Reserve Bank of Australia MOT Market Operations and Technology REB Real Estate Banking MPW Mac
Slide 102: Macquarie Group Limited
Macquarie Group Limited For personal use only
Macquarie Group — Investor Presentation (February 2012) on 6ix