Macquarie Group, Ltd. · ASX:MQG
Macquarie — Investor Presentation (February 2016)
49 slides from Macquarie's investor presentation, Feb 11, 2016
Slide 1: ASX/Media Release: Investor presentation and outlook update
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 ASX/Media Release Investor presentation and outlook update SYDNEY, 15 September 2014 – As par
Slide 2: 21st CLSA Investor Forum
21st CLSA Investor Forum Grand Hyatt, Hong Kong Presentation to Investors and Analysts 16-17 September 2014 Patrick Upfold, Chief Financial Officer
Slide 3: Disclaimer
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 summary form and does not purport to
Slide 4: Agenda
Agenda 1. About Macquarie 2. 1Q15 Update 3. Outlook 4. Appendices PAGE 3
Slide 5: About Macquarie
01 About Macquarie Presentation to Investors and Analysts September 2014
Slide 6: About Macquarie
About Macquarie 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 management services • Ma
Slide 7: Macquarie has a long history of profitability
Macquarie has a long history of profitability 2.0 Hill Samuel UK 1.6 opens branch office in Sydney $Am 1.2 Recession Currency Crisis 0.8 100 0.4 Hills Motorway Mortgage 0.0 Global real 80 securitisation estate crash 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 Recession 60 US banks capital
Slide 8: Annuity style income growth
Annuity style income growth Evolution of the business Annuity vs Capital Markets Annuity vs Capital Markets Facing Income FY08 Facing Income FY14 Capital Annuity Markets 32% Facing 26% Capital Markets Annuity Facing 74% 68% Annuity income represents the % contribution to net profit before tax after
Slide 9: Macquarie Funds Group
About Macquarie Macquarie Funds Group Top 50 global asset manager with $A405.1b1 of assets under management Provides clients with access to a diverse range of capabilities and products, Macquarie Funds Group including: – Infrastructure and real asset Macquarie Macquarie Macquarie Investment Infras
Slide 10: Assets under management of $A407 billion
Assets under management of $A407 billion1 • AUM decreased $A20b or 5% since 31 Mar 14, primarily driven by the partial transfer of Delaware Equities Focus Global Growth assets on completion of the Jackson Square Partners joint venture $Ab 450 400 350 300 250 200 150 100 50 0 Mar 10 Mar 11 Mar 12 Mar
Slide 11: Corporate and Asset Finance Group
About Macquarie Corporate and Asset Finance Group $A26.1b1 of loans and assets under finance • Delivers tailored finance and asset management Lending2 Aircraft solutions to clients through the cycles Portfolio: $A9.2b Portfolio: $A3.5b • Specialists in corporate and real estate lending Rail Corporat
Slide 12: Banking and Financial Services Group
About Macquarie Banking and Financial Services Group $A34.7b1 total retail deposits • 1 million Australian retail clients Insurance Deposits • Provides a diverse range of personal banking, wealth management and business banking products and services Banking and Wrap Financial Mortgages and Services
Slide 13: Macquarie Securities Group
About Macquarie Macquarie Securities Group Innovative specialists leveraging Asia-Pacific insights to the world • Global institutional securities house with strong Research AsiaPacific foundations covering sales, Equity capital markets research, ECM, execution and derivatives activities Corporate A
Slide 14: Macquarie Capital
About Macquarie 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 investments INDUSTRIALS • Key
Slide 15: Fixed Income, Currencies and Commodities
About Macquarie 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 producers/consumers and financ
Slide 16: Long standing conservative risk management
Long standing conservative risk management • 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 Understanding worst case R
Slide 17: MBL long term ratings stability
MBL long term ratings stability Standard & Poor’s Ratings Movements from 1 May 2007 Rating movement (notches) AA+ AA AA- 2007 A+ JPMorgan A Chase Bank 2014 Macquarie Credit Suisse UBS AG Barclays Bank Bank of Citibank Deutsche Bank Morgan A- Bank AG America Stanley Bank Goldman Intra-period BBB+ Sac
Slide 18: 1Q15 Update
02 1Q15 Update Presentation to Investors and Analysts September 2014
Slide 19: 1Q15 Macquarie Update
1Q15 Macquarie Update • 1Q15 operating groups’ contribution1 down on pcp (1Q14) and prior quarter (4Q14) • Annuity-style businesses2 broadly in line with both the pcp and prior quarter • Capital markets facing businesses3 down on pcp and prior quarter due to the timing of transactions and lower vola
Slide 20: Annuity-Style Businesses
Annuity-Style Businesses 1Q15 Update Macquarie • AUM decreased 4.6% to $A405.1b in 1Q15, predominantly driven by the partial transfer of Delaware Equities Focus Global Growth Funds Group assets on completion of the Jackson Square Partners joint venture • 1Q15 performance fees of $A27m, predominantly
Slide 21: Capital Markets Facing Businesses
Capital Markets Facing Businesses 1Q15 Update Macquarie • Market conditions were characterised by low volatility and reduced secondary market volumes and client activity, particularly in Asia Securities • Strong Australian ECM activity; No.1 for completed ECM deals in ANZ1 Group • Retail equity stru
Slide 22: Funded balance sheet remains strong
Funded balance sheet remains strong $Ab 31 March 2013 $Ab 31 March 2014 $Ab 30 June 2014 100 100 100 ST wholesale issued paper 90 90 ST wholesale issued paper 90 (10%) ST wholesale issued paper (6%) (9%) Other debt maturing in the Cash, liquids and self Other debt maturing in the next 12 mths 1 (9%)
Slide 23: Basel III capital position
Basel III capital position • APRA Basel III Group capital of $A12.4b, Group surplus of $A2.0b1 down on Mar 14 surplus of $A2.7b • Strong Bank Group APRA Basel III CET1 ratio – Common Equity Tier 1: 9.5%; Tier 1: 10.5%2 $Ab 5.0 Group regulatory surplus: Basel III (Jun 14) 4.0 (0.8) 0.1 4.1 3.0 3.4 (1
Slide 24: Outlook
03 Outlook Presentation to Investors and Analysts September 2014
Slide 25: Short term outlook
Short term outlook • Summarised below are the outlook statements for each Operating Group • FY15 results will vary with market conditions, particularly the capital markets facing businesses Net profit contribution FY07–FY14 FY07–FY14 FY15 outlook as announced Update to Operating Group historical ran
Slide 26: Short term outlook
Short term outlook • While the impact of future market conditions makes forecasting difficult, we continue to expect that the FY15 combined net profit contribution1 from operating groups will be up on FY14, offsetting the FY14 realised gain relating to the SYD distribution • The FY15 tax rate is cur
Slide 27: Medium term
Medium term • Macquarie remains well positioned to deliver superior performance in the medium term • Deep expertise in major markets • Build on our strength in diversity and continue to adapt our portfolio mix to changing market conditions – Annuity-style income is provided by three significant busi
Slide 28: Approximate business Basel III Capital & RoE
Approximate business Basel III Capital & RoE 1 APRA Basel III Capital Approx. FY14 Return Operating Group @ 8.5% ($Ab) on Ordinary Equity2 Approx. 8-Year Average Annuity-style businesses 5.8 Return on Ordinary Equity2 Macquarie Funds Group 1.9 Corporate and Asset Finance 2.6 20%3 20%4 Banking and Fi
Slide 29: Appendix - FY14 Financial Summary
04 Appendix 1 - FY14 Financial Summary Presentation to Investors and Analysts September 2014
Slide 30: 2H14 Result $A764m
2H14 Result $A764m • Net profit $A764m, up 52% on 1H14 and up 56% on 2H13 • Operating income $A4.5b, up 21% on 1H14 and up 24% on 2H13 • As foreshadowed: – Macquarie’s annuity-style businesses (Macquarie Funds, Corporate and Asset Finance, and Banking and Financial Services) continued to perform wel
Slide 31: FY14 Result $A1,265m
FY14 Result $A1,265m • Net profit $A1,265m, up $A414m (or 49%) on FY13 • Operating income $A8.1b, up $A1.5b (or 22%) on FY13 • As foreshadowed: – Macquarie’s annuity-style businesses (Macquarie Funds, Corporate and Asset Finance, and Banking and Financial Services) continued to perform well with FY1
Slide 32: FY14 Result
FY14 Result 2H14 1H14 FY14 FY13 FY14 v $Am $Am $Am $Am FY13 Net operating income 4,453 3,679 8,132 6,657 22% Total operating expenses (3,157) (2,869) (6,026) (5,252) 15% Operating profit before income tax 1,296 810 2,106 1,405 50% Income tax expense (520) (307) (827) (533) 55% Profit attributable to
Slide 33: FY14 Result Financial performance
FY14 Result Financial performance FY14 Operating income of $A8,132m FY14 Profit of $A1,265m $Am FY14 up 22% on FY13 $Am FY14 up 49% on FY13 5,000 1,000 2H14 up 21% on 1H14 2H14 up 52% on 1H14 750 4,000 500 3,000 250 2,000 0 1H12 2H12 1H13 2H13 1H14 2H14 1H12 2H12 1H13 2H13 1H14 2H14 FY14 EPS of $A3.
Slide 34: FY14 Diversified by region
FY14 Diversified by region International income 68% of total income1 Total staff 13,913; International staff 53% of total Europe, Middle East Asia Americas & Africa2 Income: $A1,574m (20% of total) Income: $A1,043m (13% of total) Income: $A2,709m (35% of total) Staff: 1,248 Staff: 3,447 Staff: 2,685
Slide 35: FY14 Diversified income
FY14 Diversified income Net operating income by region • 68% of operating income1 in FY14 was generated offshore • FX movements estimated to have approx. 7% favourable impact on the FY14 result compared to FY13 $Am 1,800 2H12 1H13 1,600 2H13 1,400 1H14 1,200 2H14 1,000 800 600 400 200 0 Australia As
Slide 36: Strong funding and balance sheet position
31 March 2014 Strong funding and balance sheet position • Diverse and stable funding base, minimal reliance on short term wholesale funding markets • Surplus funding capacity continues to be deployed • Retail deposits1 continuing to grow, up 7% to $A33.3b at Mar 14 from $A31.0b at Mar 13 • $A17.4b o
Slide 37: Funded balance sheet remains strong
31 March 2014 Funded balance sheet remains strong $Ab 31 March 2013 $Ab 30 September 2013 $Ab 31 March 2014 100 100 100 90 90 ST wholesale issued paper 90 ST wholesale issued paper ST wholesale issued paper (6%) (9%) (9%) Cash and liquid assets Other debt maturing in the Cash and liquid assets (23%)
Slide 38: Well diversified funding sources
31 March 2014 Well diversified funding sources MGL term funding (drawn and undrawn1) maturing Diversity of MGL funding sources beyond one year (including equity and hybrids) $Ab Wholesale issued paper 25 Equity and hybrids 9% Equity & Hybrids 13% Deposits - corporate Loan capital and wholesale 4% De
Slide 39: Continued retail deposit growth
31 March 2014 Continued retail deposit1 growth • Macquarie has been successful in pursuing its strategy of diversifying its funding sources through growing its deposit base – 1 million Australian retail clients, of whom more than 643,000 are depositors – Focus on the composition and quality of the d
Slide 40: Basel III capital position
31 March 2014 Basel III capital position • APRA Basel III Group capital of $A12.9b, Group surplus of $A2.7b1 slightly down on Sep 13 surplus of $A2.8b2 • Strong Bank Group APRA Basel III CET1 ratio – Common Equity Tier 1: 9.6%; Tier 1: 10.6%3 $Ab 5.0 Group regulatory surplus: Basel III (Mar 14) (0.3
Slide 41: Bank Group Basel III Common Equity Tier 1 (CET1) Ratio
31 March 2014 Bank Group Basel III Common Equity Tier 1 (CET1) Ratio • Strong Bank Group APRA Basel III CET1 ratio – Common Equity Tier 1: 9.6%; Tier 1: 10.6% • Basel III applies only to the Bank Group and not the Non-Bank Group Bank Group Common Equity Tier 1 (CET1) Ratio: Basel III (Mar 14) 14% 12
Slide 42: Basel III leverage ratio peer comparison
31 March 2014 Basel III leverage ratio peer comparison Basel III Tier 1 Leverage Ratio1 6.5% US Banks 6.0% 5.5% Supplementary Leverage Ratio required for US Covered Bank Holding Companies2 5.0% 4.5% 4.0% 3.5% Minimum Basel III Leverage ratio 3.0% 2.5% 2.0% MBL Citi JP Morgan BAML 3 Goldman Morgan St
Slide 43: Strength across both regulatory capital metrics
31 March 2014 Strength across both regulatory capital metrics 13% UBS Average Leverage ratio4 4.2% 12% Basel III CET1 ratio1 MS MBL Std Chartered 11% HSBC BNP Citi 10% CS SocGen Average CET1 ratio4 10.3% GS BAML3 DB JPM Barclays 9% RBS 8% 2% 3% 4% 5% 6% Basel III Leverage ratio2 1. Peer CET1 ratios
Slide 44: Loan portfolio growth – Funded Balance Sheet
31 March 2014 Loan portfolio1 growth – Funded Balance Sheet Mar 14 Mar 13 Category $Ab $Ab Mortgages: Australia 10.5 7.2 United States 0.5 0.7 Canada 5.0 6.7 Other 0.2 0.2 Total mortgages 16.2 14.8 Structured investments 3.8 3.6 Banking 4.2 3.6 Real Estate 2.3 2.3 Resources and commodities 2.4 2.3 F
Slide 45: Equity investments of $A4.2b
31 March 2014 Equity investments of $A4.2b1 Carrying Carrying value2 value2 Category Mar 14 $Am Mar 13 $Am Description Macquarie European Infrastructure Fund LP, Macquarie Infrastructure Company, Macquarie Funds (MIRA) managed 1,354 1,158 Macquarie Atlas Roads, Macquarie SBI Infrastructure Fund, MWR
Slide 46: Appendix – Enforceable Undertaking
04 Appendix 2 – Enforceable Undertaking Presentation to Investors and Analysts September 2014
Slide 47: Macquarie Private Wealth Enforceable Undertaking update
Macquarie Private Wealth Enforceable Undertaking update Background • MPW is primarily a retail broking and equities advice business within Banking and Financial Services − 87,000 clients1 of whom a significant number are high net worth − Over 85% of assets under advice relate to equities broking act
Slide 48: Macquarie Private Wealth Enforceable Undertaking update
Macquarie Private Wealth Enforceable Undertaking update Implementation to date • Implementation on track with three out of four phases now complete • New management team • Together with implementation of FoFA regulatory changes, significant investment being made in new processes, practices and syste
Slide 49: 21st CLSA Investor Forum
21st CLSA Investor Forum Grand Hyatt, Hong Kong Presentation to Investors and Analysts 16-17 September 2014 Patrick Upfold, Chief Financial Officer
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