Macquarie posts record quarter on ‘improved market conditions’

Macquarie Group managing director Shemara Wikramanayake has handed down a “record quarter” for the group as a result of improved overall market conditions.  

“We continue to maintain a cautious stance, with a conservative approach to capital, funding and liquidity that positions us well to respond to the current environment,” Ms Wikramanayake said.

Macquarie’s third-quarter market-facing business’ combined net profit contribution was substantially up on results clocked in the third quarter of 2021, primarily due to higher principal income in Macquarie Capital, the investment bank said in a briefing on Tuesday (8 February).

Macquarie Capital completed 126 transactions globally in the third quarter of 2022, valued at $105 billion. Fee revenue was significantly up across advisory, debt capital markets and equity capital markets, while investment-related income was also “up substantially” following “exceptionally strong” investment realisations. 

Commodities and global markets also reported a strong result on high commodities income, particularly in global gas, power and resources, driven by increased client hedging and trading opportunities from “unusually challenging” market conditions.

In late October, Macquarie announced a net profit of over $2 billion in the first half of 2022, up 107 per cent on its 1H21 results.

In its latest update, the bank said its annuity-style businesses’ combined contribution to third-quarter net profit was down on the year, mainly due to the timing of performance fees and investment-related income, but net profit contribution was up for the nine months, due to continued volume growth in banking and financial services (BFS).

Macquarie’s BFS had total deposits of $91.6 billion at 31 December 2021, up 4 per cent on 30 September 2021. The home loan portfolio of $82.8 billion increased 8 per cent on 30 September 2021, while funds on platform of $120.9 billion increased 4 per cent.

Macquarie Asset Management held assets under management of $750.1 billion at 31 December, up 2 per cent on 30 September 2021.

Overall, the group said its financial position “comfortably exceeds” APRA’s Basel III regulatory requirements, with a group capital surplus of $11.5 billion at 31 December, up from $8.4 billion at 30 September.

“We remain well positioned over the medium term, based on our deep expertise in major markets, a diversified and adaptable mix of strong businesses, an ongoing program to identify cost saving initiatives and efficiency, a strong and conservative balance sheet and a proven risk management framework and culture,” Ms Wikramanayake concluded.