Macquarie Group, Ltd. · ASX:MQG
Macquarie — Debt Investor Presentation (November 2015)
34 slides from Macquarie's debt investor presentation, Nov 23, 2015
Slide 1: Macquarie Group Capital Notes 2 Offer
For personal use only Macquarie Group Limited Macquarie Group Capital Notes 2 Offer November 2015 PAGE 1
Slide 2: Important notice and disclaimer
Important notice and disclaimer For personal use only This presentation has been prepared by Macquarie Group Limited ABN 94 122 169 279 (“MGL”) in relation to its proposed offer of Macquarie Group Capital Notes 2 (“MCN2”) as described in this presentation. A Prospectus 1 in respect of MCN2 was lodge
Slide 3: Overview of the Macquarie Group
For personal use only Overview of the Macquarie Group 01 PAGE 3
Slide 4: Macquarie overview
Macquarie overview Global provider of banking, financial advisory, investment For personal use only and funds management services Macquarie Group overview 1 Global locations Annuity-style businesses Capital markets facing businesses North America Europe Middle East Asia 18 locations 11 locations 2 l
Slide 5: About Macquarie
About Macquarie For personal use only Building for the long term Macquarie Asset • Top 50 global asset manager with $A502.3b1 of assets under management Management • Provides clients with access to a diverse range of capabilities and products, including infrastructure and real asset management, secu
Slide 6: Group funding and capital structure
Group funding and capital structure For personal use only MGL and MBL are the Group’s two primary external funding vehicles which have separate and distinct funding, capital and liquidity management arrangements MBL provides funding to the Bank Group MGL provides funding predominately to the N
Slide 7: Basel III capital position
Basel III capital position For personal use only APRA Basel III Group capital at Sep 15 of $A16.9b, Group surplus of $A3.1b (1 Jan 16 requirements1) Bank Group APRA Basel III CET1 ratio: 9.9%; Tier 1 ratio: 11.1% Bank Group Harmonised Basel III CET1 ratio: 11.6%; Tier 1 ratio: 12.8%2 Excludes:
Slide 8: Strong regulatory ratios
Strong regulatory ratios For personal use only Macquarie Bank Group (Sep 15) Harmonised ratios 6.0% 14.0% 6% 200% 11.6% 170% 5% 10.5% 150% 4% 7.0% 3% 100% 2% 3.5% 50% 1% 0.0% 0% 0% CET1 ratio Leverage ratio 0 1 LCR 2 3 BCBS Basel III minimum Macquarie Bank Group (Harmonised) 1. Average LCR for Sep 1
Slide 9: Long standing conservative risk management framework
Long standing conservative risk management framework For personal use only Macquarie’s risk management principles have remained largely stable over 30 years and served the Group well over the past few years The key aspects of Macquarie’s risk management approach are: Ownership of risk at Underst
Slide 10: Trading businesses are client driven
Trading businesses are client driven For personal use only Consistent daily trading returns Daily Trading Profit and Loss FY10 - FY15 Days 120 100 80 60 40 20 0 <-5 >25 <-20 <-15 <-10 >10 >15 >20 >30 >35 <0 >0 >5 $Am FY10 FY11 FY12 FY13 FY14 FY15 PAGE 10
Slide 11: MGL results
For personal use only MGL results PAGE 11 02
Slide 12: 1H16 Result
1H16 Result For personal use only $A1,070m Net profit $A1,070m, up 58% on 1H15 and up 16% on 2H15 Operating income $A5.3b, up 24% on 1H15 and up 7% on 2H15 Improved result largely driven by performance fees, foreign exchange and improved trading conditions All operating groups’ net profit co
Slide 13: 1H16 Result
1H16 Result For personal use only 1H16 2H15 1H15 1H16 v $Am $Am $Am 1H15 Net operating income 5,318 4,978 4,284 24% Total operating expenses (3,699) (3,577) (3,163) 17% Operating profit before income tax 1,619 1,401 1,121 44% Income tax expense (530) (467) (432) 23% Profit attributable to non-contro
Slide 14: Financial performance
Financial performance For personal use only 1H16 Operating income of $A5,318m 1H16 Profit of $A1,070m $Am 1H16 up 24% on 1H15 $Am 1H16 up 58% on 1H15 6,000 1H16 up 7% on 2H15 1,250 1H16 up 16% on 2H15 5,000 1,000 750 4,000 500 3,000 250 2,000 - 2H13 1H14 2H14 1H15 2H15 1H16 2H13 1H14 2H14 1H15 2H15
Slide 15: Diversification by region
Diversification by region International income 71% of total income1 For personal use only Total staff 13,582; International staff 54% of total Europe, Middle East & Africa Asia Americas Income: $A1,262m (24% of total) Income: $A850m (16% of total) Income: $A1,677m (31% of total) Staff: 1,360 Staff:
Slide 16: Diversification by region
Diversification by region For personal use only 71% of total income1 in 1H16 was generated offshore A 10% movement2 in AUD is estimated to have approx. 7% impact on full year NPAT — Given currency movements, we estimate approx. a quarter of the increase in 1H16 NPAT on 1H15 is attributable to fo
Slide 17: Funded balance sheet remains strong
Funded balance sheet remains strong For personal use only $Ab 30 September 2014 $Ab 31 March 2015 30 September 2015 $Ab 130 4 130 130 120 120 120 ST wholesale issued paper (9%) 110 110 ST wholesale issued paper 110 Other debt maturing in the next 12 Cash, liquids and self securitised (11%) mths1 (7%
Slide 18: Strong liquidity position maintained
Strong liquidity position maintained For personal use only 170% average LCR for Sep 15 quarter, based on month-end observations — Maintained well above regulatory minimums — Includes APRA approved AUD CLF allocation of $A5b for 2015 calendar year Reflects long-standing conservative approach to l
Slide 19: MCN2 Offer
For personal use only MCN2 Offer PAGE 19 03
Slide 20: Macquarie Group Capital Notes Offer Overview
Macquarie Group Capital Notes 2 Offer For personal use only Overview Issuer Macquarie Group Limited (“MGL”) Fully paid, subordinated, non-cumulative, unsecured, mandatorily convertible, perpetual capital notes (“MCN2”), automatically convertible at the point of Non-Viability Type of security of
Slide 21: MCN2 Key Terms
MCN2 Key Terms For personal use only Distributions Distributions on MCN2 are discretionary, non-cumulative floating rate payments Distributions are scheduled to be paid in arrears commencing on 17 March 2016 and thereafter semi-annually, subject to the Payment Conditions, until MCN2 are Exchange
Slide 22: MCN2 Key Terms: Mandatory Exchange
MCN2 Key Terms For personal use only Mandatory Exchange The Issuer must Exchange MCN2 into MGL Ordinary Shares on 18 March 2024 (if MCN2 have not been Redeemed, Exchanged or Written-Off beforehand) provided that certain Exchange Conditions are satisfied Mandatory Exchange The conditions to Manda
Slide 23: MCN2 Key Terms: Optional Exchange and Non-Viability Event
MCN2 Key Terms Optional Exchange and Exchange on an Acquisition Event or Non- For personal use only Viability Event The Issuer may choose to Exchange all or some MCN2 on 17 March 2021, 17 September 2021 or 17 March 2022 or if there has been Optional Exchange a Tax Event or a Regulatory Event The
Slide 24: MCN2 Key Terms
MCN2 Key Terms For personal use only Summary of certain events that may occur during the term of MCN2 Is APRA Do When could this approval conditions What value will a MCN2 holder In what form will the value be provided to Event occur? Consequences required? apply? receive (per MCN2)? MCN2 Holders? T
Slide 25: Comparison between MCN2 and other Securities
MCN2 Key Terms For personal use only Comparison between MCN2 and other Securities Feature Term deposit BCN MCN MCN2 MGL Ordinary Shares Issuer Bank, credit union or Macquarie Bank Limited Macquarie Group Limited Macquarie Group Limited Macquarie Group Limited building society (e.g. MBL) Guarantee un
Slide 26: MCN2 Key Terms: Ranking in a winding up
MCN2 Key Terms For personal use only Ranking in a winding up In a Winding Up of MGL, MCN2 will rank ahead of MGL Ranking Illustrative examples Ordinary Shares, equally with Equal Ranking Obligations, but behind all Senior Creditors of MGL Higher Preferred and Liabilities preferred by law including
Slide 27: Investment Risks
For personal use only Investment Risks 04 PAGE 27
Slide 28: ASIC Guidance
ASIC Guidance For personal use only Please consider ASIC Guidance before investing. www.moneysmart.gov.au/investing MCN2 are a complex investment and may be difficult to understand, even for experienced investors. You should ensure that you understand the MCN2 Terms and risks of investing in MCN2 an
Slide 29: Investment risks
Investment risks For personal use only The following is a summary of key risks only. You should read Section 4 “Investment risks” of the Prospectus in full before deciding to invest • Investments in MCN2 are not deposit liabilities and are not protected accounts under the Banking Act – Investments i
Slide 30: Investment risks continued
Investment risks For personal use only continued The following is a summary of key risks only. You should read Section 4 “Investment risks” of the Prospectus in full before deciding to invest • Risks upon Exchange for Ordinary Shares – Ordinary Shares are a different type of investment to MCN2. For
Slide 31: Investment risks continued
Investment risks For personal use only continued The following is a summary of key risks only. You should read Section 4 “Investment risks” of the Prospectus in full before deciding to invest • Restrictions on rights and ranking in a Winding Up – MCN2 are unsecured and subordinated obligations of MG
Slide 32: Key Dates and Contacts
For personal use only Key Dates and Contacts 05 PAGE 32
Slide 33: Key Dates
Key Dates For personal use only KEY DATES FOR THE OFFER DATE Record date for determining Eligible Securityholders 7.00pm (Sydney time) Friday, 20 November 2015 Lodgement of the Prospectus with ASIC Monday, 23 November 2015 Bookbuild Friday, 27 November 2015 Announcement of the Margin Friday, 27 Nove
Slide 34: Key Contacts
Key Contacts For personal use only Issuer Macquarie Group Limited Stuart Green, Group Treasurer Brad Milson, Division Director +61 2 8232 8845 +61 2 8232 7550 Sole Arranger Macquarie Capital (Australia) Limited Jacqui Vanzella Michael Daley +61 2 8232 4904 +61 2 8237 7799 Joint Lead Managers ANZ Sec
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