Macquarie’s dwelling mortgage ebook grows, income down 32% total

Regardless of sturdy performances in its dwelling mortgage and enterprise mortgage portfolios, Macquarie skilled a major drop in income within the 2024 monetary yr.

Whereas Macquarie’s annual web revenue of $3.5 billion was 32% beneath FY23, the funding financial institution ended the yr on a comparatively optimistic notice, with the second half of the yr up 49% on the primary.

Nonetheless, the lower-than-forecast outcomes hampered the ultimate dividend for traders, diminished from $4.50 a share to $3.85.

Macquarie Group managing director and CEO, Shemara Wikramanayake (pictured above left), cited “ongoing financial uncertainty and “subdued market situations in lots of elements of the world” as causes for the decline.

Nevertheless, she stated the financial institution’s shopper franchises “remained resilient” during the last yr, with “continued shopper development, fundraising and new enterprise origination throughout the Group” because it delivered its fifty fifth consecutive yr of profitability since inception. 

Macquarie’s banking and monetary providers

In contrast to different working teams inside the firm, Macquarie’s banking and monetary providers arm had usually optimistic outcomes.

Complete dwelling loans grew by $11.4 billion over the yr, with the financial institution additional establishing itself because the nation’s fifth largest dwelling mortgage lender.

Its enterprise banking phase – a mortgage portfolio secured largely by working capital, enterprise money flows, and actual property – additionally grew significantly from $12.9 billion in FY23 to $15.7 billion in FY24.

“(There was) 13% development in common dwelling mortgage balances this yr, (and) actually sturdy 20% development within the enterprise financial institution,” stated Alex Harvey (pictured above proper), CFO and head of the monetary administration group.  “We’re actually happy to see this given the main target the group has had there.”

Automotive loans weren’t worthwhile for Macquarie with the portfolio falling from $6 billion to $4.5 billion over the yr.

Elsewhere, Macquarie’s asset administration and commodities slumped, with income halving over the yr.

Throughout the asset administration division, which was down 48%, the end result was “primarily pushed by decrease asset realisations in inexperienced investments and elevated web expenditure in investments in inexperienced power portfolio firms”, in accordance with the corporate.

Macquarie’s commodity portfolio succumbed to “considerably decrease stock administration and buying and selling earnings” after world commodity costs fell all year long.

Macquarie’s outlook

Macquarie continues to take care of a cautious stance, with a conservative strategy to capital, funding and liquidity that positions it to reply to the present surroundings.

The vary of things which will affect our short-term outlook embrace:

• Market situations together with world financial situations, inflation and rates of interest, vital volatility occasions, and the impression of geopolitical occasions
• Completion of period-end opinions and the completion of transactions
• The geographic composition of earnings and the impression of overseas trade
• Potential tax or regulatory adjustments and tax uncertainties

Wikramanayake stated: “Macquarie stays well-positioned to ship superior efficiency within the medium time period with its numerous enterprise combine throughout annuity-style and markets-facing companies; deep experience throughout numerous sectors in main markets with structural development tailwinds; affected person adjoining development throughout new merchandise and new markets; ongoing funding in our working platform; a robust and conservative stability sheet; and a confirmed danger administration framework and tradition.”