Slide 1: Presentation to investors and analysts
Presentation to investors and analysts Result announcement for the full year ended 31 March 2022 6 May 2022
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 and
Slide 3: Agenda
Agenda 01 02 03 Introduction Overview of Result Analysis Result and Financial Management 04 05 Outlook Appendices
Slide 4: Introduction
01 Introduction Sam Dobson Head of Investor Relations
Slide 5: Overview of Result
02 Overview of Result Shemara Wikramanayake Managing Director and Chief Executive Officer
Slide 6: About Macquarie
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices About Macquarie Annuity-style activities | Net Profit Contribution ~44% Markets-facing activities | Net Profit Contribution ~56% BFS MAM CGM MacCap Banking and Financial Services Macquarie Asset Management Co
Slide 7: 2H22 result
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices 2H22 result: $A2,663m up 30% on 1H22; up 31% on 2H21 FY22 result: $A4,706m up 56% on FY21 2H22 1H22 2H22 v FY22 FY21 FY22 v $Am $Am 1H22 $Am $Am FY21 Net operating income 9,520 7,804 á 22% 17,324 12,774 á 36%
Slide 8: 2H22 net profit contribution from Operating Groups
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices 2H22 net profit contribution from Operating Groups $A5,478m up 38% on 1H22; up 43% on 2H21 Annuity-style activities â 36% Markets-facing activities á 163% $A1,615m $A3,863m ON 1H22 ON 1H22 â 6% á 83% ON 2H21
Slide 9: FY22 net profit contribution from Operating Groups
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices FY22 net profit contribution from Operating Groups $A9,462m up 55% on FY21 Annuity-style activities Markets-facing activities $A4,132m á 25% $A5,330m á 92% ON FY21 ON FY21 Non-Banking Group Macquarie Asset Ma
Slide 10: Financial performance
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Financial performance Operating income FY22 Profit FY22 $A17,324m $A4,706m $Am $Am 20,000 á 36% 5,000 á 56% 16,000 ON FY21 4,000 ON FY21 12,000 3,000 8,000 2,000 4,000 1,000 — — FY18 FY19 FY20 FY21 FY22 FY18
Slide 11: Assets under management of $A774.8b
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices 1 Assets under management of $A774.8b 1 AUM increased 37% from $A563.5b as at 31 Mar 21 Increase due to acquisitions of Waddell & Reed Financial, AMP Capital’s public investments business and Central Park Gro
Slide 12: Diversification by region
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Diversification by region 1 International income 75% of total income 2 Total staff 18,133 of which 54% international. A further ~225,000 people employed across managed 3 fund assets and investments 4 Americas
Slide 13: Diversification by region
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Diversification by region 1 75% of total income in FY22 was generated offshore Total income $Am 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 Americas Europe, Middle East & Africa Asia Australia FY1
Slide 14: Macquarie Asset Management
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices MAM Macquarie Asset • Continuing to invest in client experience, building long-term strategic partnerships across the platform. The proportion of clients investing in multiple strategies across MAM’s Private
Slide 15: Banking and Financial Services
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Banking and Personal Banking • Home loan portfolio of $A89.5b, up 34% on Business Banking • Business Banking loan portfolio of Wealth Management • Funds on platform of $A118.6b, up 17% on Financial Services M
Slide 16: Commodities and Global Markets
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Commodities and 1 1 1 Asset Finance 9% Commodity Markets 65% Financial Markets 26% • Continued positive • Increased revenue across Commodities Foreign exchange, interest Equity Derivatives and Global Markets
Slide 17: Macquarie Capital
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Macquarie Summary Transaction Activity 2 14 • Maintained a leading market position in ANZ across M&A in 2021 • Financial adviser to Sydney Aviation Alliance on its ~$A32b acquisition of Sydney Airport • Maint
Slide 18: 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 1 1 31 Mar 21 31 Mar 22 $Ab $Ab 7 270 270 Total customer deposits ST wholesale issued paper 13% á 21% 240 240 Other debt maturing 2 in t
Slide 19: Basel III capital position
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Basel III capital position 1,2 • APRA Basel III Group capital at Mar 22 of $A33.6b; Group capital surplus of $A10.7b • APRA Basel III Level 2 CET1 ratio: 11.5%; Harmonised Basel III Level 2 CET1 ratio: 14.6%
Slide 20: Business capital requirements
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices 1 Business capital requirements 2H22 Key drivers MAM 2 FY22 business capital requirement growth of $A5.4b • Growth in MAM balance sheet usage from new fund co-investments and $Ab underwrites to seed core and
Slide 21: Strong regulatory ratios
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Strong regulatory ratios Bank Group Level 2 Ratios (Mar 22) 17.5% 7.5% 200.0% 130.0% 14.6% 180.0% 1 14.0% 6.0% 175% 120.0% 2 5.6% 121% 160.0% 11.5% 5.0% 140.0% 10.5% 4.5% 110.0% 120.0% 7.0% 3.0% 100.0% 100.0%
Slide 22: Final dividend
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Final dividend 2H22 Ordinary Dividend FY22 Ordinary Dividend $A3.50 á $A3.35 FROM $A6.22 á $A4.70 FROM (40% franked) (40% franked) (40% franked) (40% franked) IN 2H21 IN FY21 2H22 Record Date Payout Ratio 17
Slide 23: Board Update
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Board Update As previously noted, Macquarie has been working with APRA to strengthen the voice We are pleased to announce Ian Saines as the first MBL BOND, of MBL within the Group, and making good progress on
Slide 24: Result Analysis and Financial Management
03 Result Analysis and Financial Management Alex Harvey Chief Financial Officer
Slide 25: Income statement key drivers
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Income statement key drivers Net interest and trading income of $A6,856m, up 21% on FY21 2H22 1H22 FY22 FY21 • Higher commodities income mainly driven by increased risk management income with gains across the
Slide 26: Macquarie Asset Management
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Macquarie Asset Management Key drivers • Base fees up due to: – Investments made by Private Markets-managed funds and positive Increase driven by income related to the disposition of MIC assets and market mov
Slide 27: MAM AUM movement
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices MAM AUM movement Increase due to acquisitions of Waddell & Reed Financial, AMP Capital’s public investments business and Central Park Group as well as investments made by Private Markets-managed funds and net
Slide 28: Banking and Financial Services
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Banking and Financial Services Key drivers • Higher Personal Banking income driven by 27% Strong home loan and deposit growth; net credit impairment growth in average home loans volumes releases, partially of
Slide 29: Banking and Financial Services
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Banking and Financial Services Strong growth across home loans, deposits and funds on platform $Ab $Ab 118.6 120 18 101.4 16 15.2 98.0 100 89.5 13.7 86.0 14 80.7 79.1 80 12 11.5 11.5 67.0 10.2 63.9 10 9.0 8.8
Slide 30: Commodities and Global Markets
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Commodities and Global Markets Key drivers • Commodities up significantly on FY21 – Increased Risk Management revenue across platform Strong underlying client business which benefited from particularly Gas an
Slide 31: Strong underlying client business
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Strong underlying client business Majority of income derived from underlying client business 2 Operating Income Client numbers (excl. credit and other impairment charges) (excl. Asset Finance) Underlying clie
Slide 32: Underlying client activity driving regulatory capital and trading revenues
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Underlying client activity driving regulatory capital and trading revenues 1 Regulatory capital (normalised) Group Daily trading profit and loss FY18 - FY22 ($Am) 2 Days 90 80 70 60 50 40 30 20 10 0 $Am Mar 1
Slide 33: Macquarie Capital
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Macquarie Capital Key drivers • Higher investment-related income primarily driven by: Result reflects higher investment-related income, higher fee – Substantially higher revenue from material asset realisatio
Slide 34: Macquarie Capital
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Macquarie Capital Movement in capital $Ab 7.0 $A2.5b ($A1.5b) 6.0 $A4.9b 5.0 $A3.9b 4.0 3.0 2.0 1.0 0.0 31 Mar 21 Investments Realisations 31 Mar 22 1 Debt Conventional Energy Infrastructure Green Green Energ
Slide 35: Costs of compliance
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Costs of compliance 1 Total compliance spend $A785m in FY22, up 22% on FY21 • The industry continues to see an increase in regulatory initiatives, resulting in increased FY22 FY21 compliance requirements acro
Slide 36: 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 o
Slide 37: Diversified issuance strategy
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Diversified issuance strategy 1 2 Term funding as at 31 Mar 22 – diversified by currency , tenor and type Currency Tenor Type 1-2yrs 9% 5.1 years WAM6 EUR 5% GBP 3% Subordinated debt 4% CHF 1% Syndicated loan
Slide 38: Continued customer deposit growth
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Continued customer deposit growth Macquarie has seen continued success in its long-term strategy of diversifying funding sources by growing its deposit base • Of approximately 1.7 million BFS clients, ~880,00
Slide 39: Loan and lease portfolios
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Loan and lease portfolios1 – funded balance sheet 2 2 Operating Mar 22 Mar 21 Group Category $Ab $Ab Description Home loans 89.9 66.9 Secured by residential property Business banking 11.8 10.5 Loan portfolio
Slide 40: Equity investments of $A8.3b
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices 1 Equity investments of $A8.3b Carrying value Carrying value Category Mar 22 $Ab Mar 21 $Ab Description Includes Macquarie Real Estate Partners Fund, Macquarie Macquarie Asset Management Private 1.5 1.5 Korea
Slide 41: Regulatory update
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Regulatory update Australia Update on prudential standards 1 APRA has finalised or is in the process of implementing changes to a number of prudential standards . Macquarie notes the following key updates: •
Slide 42: Bank Group Basel III Common Equity Tier 1 Ratio
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Bank Group Basel III Common Equity Tier 1 (CET1) Ratio 1 • APRA Basel III Level 2 CET1 ratio: 11.5% 2 • Harmonised Basel III Level 2 CET1 ratio: 14.6% Bank Group Level 2 Common Equity Tier 1 Ratio: Basel III
Slide 43: Strong liquidity position maintained
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Strong liquidity position maintained 1 • 175% average LCR for Mar 22 quarter, based on daily observations – Maintained well above regulatory minimum 2 – Excludes CLF allocation • Reflects longstanding conserv
Slide 44: Capital management update
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Capital management update Capital Raising • Macquarie raised $A2.8b of ordinary share capital through a non-underwritten $A1.5b institutional placement and $A1.3b from a Share Purchase Plan (SPP) – On 4 Nov 2
Slide 45: Outlook
04 Outlook Shemara Wikramanayake Managing Director and Chief Executive Officer
Slide 46: Short-term outlook
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Short-term outlook Factors impacting short-term outlook Annuity-style businesses Markets-facing businesses Non-Banking Group Macquarie Asset Management (MAM) Macquarie Capital (MacCap) • Base fees expected to
Slide 47: Short-term outlook
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Short-term outlook The range of factors that may influence our short-term outlook include: • Market conditions including: significant volatility events, global inflation and interest rates, and the impact of
Slide 48: Medium-term outlook
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Medium-term outlook Macquarie remains well-positioned to deliver superior performance in the medium term Deep expertise in major markets Build on our strength in business and geographic diversity and continue
Slide 49: Medium term
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Medium term Annuity-style businesses Markets-facing businesses Non-Banking Group Macquarie Asset Management (MAM) Macquarie Capital (MacCap) ▪ Global specialist asset manager, well-positioned to respond to cu
Slide 50: Approximate business Basel III Capital and ROE
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Approximate business Basel III Capital and ROE 31 Mar 22 1 APRA Basel III Capital Approx. FY22 Return on Approx. 16-year Average Operating Group 2 3 @ 8.5% ($Ab) Ordinary Equity Return on Ordinary Equity Annu
Slide 51: Presentation to investors and analysts
Presentation to investors and analysts Result announcement for the full year ended 31 March 2022 6 May 2022
Slide 52: Appendix A
05 Appendix A Detailed Result Commentary
Slide 53: Macquarie Asset Management
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Macquarie Asset Management Result • Base fees of $A2,771m, up on FY21 primarily driven by FY22 FY21 – Acquisition of Waddell & Reed in the current year $Am $Am – Investments by Private Markets–managed funds a
Slide 54: 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 $A1,972m, up 13% on FY21 FY22 FY21 – 23% growth in the average loan portfolio and 19% growth in the average BFS $Am $Am deposit volum
Slide 55: Commodities and Global Markets
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Commodities and Global Markets Result • Commodities income of $A3,324m, up 24% on FY21; FY22 FY21 – Risk management up 39% on a strong FY21 with gains across the platform, particularly in Gas and $Am $Am Powe
Slide 56: Macquarie Capital
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Macquarie Capital Result • Higher net interest and trading income of $A327m, increased significantly compared FY22 FY21 to the prior year primarily due to higher net interest income driven by the growth in $A
Slide 57: Appendix B
05 Appendix B Additional Information Funding
Slide 58: 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 59: 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 60: Funding for Macquarie
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Funding for Macquarie Mar 22 Mar 21 1 1 • Well diversified funding sources $Ab $Ab • Term assets covered by term funding, stable deposits, hybrids Funding sources and equity Certificates of deposit 0.7 0.4 •
Slide 61: Funding for the Bank Group
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Funding for the Bank Group Mar 22 Mar 21 1 1 • Bank balance sheet remains liquid and well capitalised, with $Ab $Ab a diverse range of funding sources Funding sources Certificates of deposit 0.7 0.4 • Term fu
Slide 62: Funding for the Non-Bank Group
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Funding for the Non-Bank Group Mar 22 Mar 21 • Non-Bank Group is predominantly term funded $Ab $Ab • Term funding beyond one year (excluding equity) has a Funding sources 1 weighted average term to maturity o
Slide 63: 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 Derivative revaluation Outstanding trade accounting gross-ups Segregated funds settlement balances Working capital assets Macquarie’s derivative activitie
Slide 64: 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 65: Appendix C
05 Appendix C Additional Information Capital
Slide 66: Macquarie Basel III regulatory capital
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Macquarie Basel III regulatory capital Surplus calculation Harmonised APRA 1 1 Basel III Basel III 31 Mar 22 $Am $Am Macquarie eligible capital Bank Group Gross Tier 1 capital 20,255 20,255 Non-Bank Group eli
Slide 67: 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 31 Mar 22 $Am $Am $Am Credit risk On balance sheet 56,801 4,828 Off balance she
Slide 68: 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 69: 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 31 Mar 22 $Ab $Am Weight Funded assets Cash and liquid assets 15.2 217 18% 1 Loan assets 13.0 1,352 130% Deb
Slide 70: Appendix D
© macauaric Appendix D Glossary
Slide 71: Glossary
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Glossary $A / AUD Australian Dollar CLF Committed Liquidity Facility $US / USD United States Dollar CMA Cash Management Account £ / GBP Pound Sterling CRM Customer Relationship Management € Euro CY20 Calendar
Slide 72: Glossary
Introduction Overview of Result Result Analysis and Financial Management Outlook Appendices Glossary GIG Green Investment Group MPA Mortgage Professional Australia IPO Initial Public Offering MSCIF Macquarie Super Core Infrastructure Fund IRB Internal Ratings-Based MW Mega Watt IFRS International Fi
Slide 73: Presentation to investors and analysts
Presentation to investors and analysts Result announcement for the full year ended 31 March 2022 6 May 2022